SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 1 [X]
Post-Effective Amendment No. File No. 333-40843 [ ]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 1 File No. 811-08511 [X]
SCOUT CAPITAL PRESERVATION FUND, INC.
(Exact Name of Registrant as Specified in Charter)
BMA Tower, 700 Karnes Boulevard, Kansas City, MO 64108-3306
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code (816) 751-5900
Larry D. Armel, President, SCOUT CAPITAL PRESERVATION FUND, INC.
BMA Tower, 700 Karnes Boulevard, Kansas City, MO 64108-3306
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: Upon effective date of this
registration statement
Title of Securities Being Registered: Common Stock, $1.00 par value
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 on such date as the Commission acting pursuant
to Section 8(a) of the Investment Company Act of 1940 may determine.
Please address inquiries and a carbon copy of all
and communications to: communications to:
John G. Dyer, Esq. Mark H. Plafker, Esq.
Scout Capital Preservation Fund, Inc. Stradley, Ronon, Stevens & Young
BMA Tower 2600 One Commerce Square
700 Karnes Blvd. Philadelphia, PA 19103-7098
Kansas City, MO 64108-3306 Telephone: (215) 564-8024
<PAGE>
Telephone: (816) 751-5900
SCOUT CAPITAL PRESERVATION FUND, INC.
CROSS REFERENCE SHEET
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Form N-1A Item Number Location in Prospectus
Item 1. Cover Page.................................................... Cover Page
Item 2. Synopsis...................................................... Not Applicable
Item 3. Condensed Financial Information............................... Per Share Capital and Income
Changes
Item 4. General Description of Registrant............................. Investment Objective and
Portfolio Management Policy
Item 5. Management of the Fund........................................ Officers and Directors;
Management and Investment
Counsel
Item 6. Capital Stock and Other Securities............................ How to Purchase Shares;
How to Redeem Shares; How
Share Price is Determined;
General Information and
History; Dividends,
Distributions and their
Taxation
Item 7. Purchase of Securities........................................ Cover Page; How to
being Offered Purchase Shares; Shareholder
Services
Item 8. Redemption or Repurchase...................................... How to Redeem Shares
Item 9. Pending Legal Proceedings..................................... Not Applicable
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SCOUT CAPITAL PRESERVATION FUND, INC.
CROSS REFERENCE SHEET (Continued)
Location in Statement of
Additional
Form N-1A Item Number Information
Item 10. Cover Page........................................... Cover Page
Item 11. Table of Contents.................................... Cover Page
Item 12. General Information and History...................... Investment Objectives and
Policies; Management and
Investment Counsel
Item 13. Investment Objectives and Policies................... Investment Objectives and
Policies; Investment
Restrictions
Item 14. Management of the Fund............................... Management and Investment
Counsel
Item 15. Control Persons and Principal........................ Management and
Holders of Securities Investment Counsel; Officers
and Directors
Item 16. Investment Advisory and other........................ Management and
Services Investment Counsel
Item 17. Brokerage Allocation................................. Portfolio Transactions
Item 18. Capital Stock and Other Securities................... General Information and
History (Prospectus);
Financial Statements
Item 19. Purchase, Redemption and Pricing..................... How Share Purchases of
Securities Being Offered are
Handled; Redemption of
Shares; Financial Statements
Item 20. Tax Status........................................... Dividends, Distributions and
their Taxation (Prospectus)
Item 21. Underwriters......................................... How the Fund's Shares are
Distributed
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Item 22. Calculation of Yield Quotations...................... Not Applicable
of Money Market Fund
Item 23. Financial Statements................................. Included in Part B of the
Registration Statement
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PROSPECTUS
February ___, 1998
Scout Capital Preservation Fund, Inc.
Toll-Free 1-800-996-2862
INVESTMENT OBJECTIVE
Scout Capital Preservation Fund, Inc. is a member of the Scout Fund Group. The
Scout Funds were created especially for the benefit of customers of affiliated
banks of UMB Financial Corporation and those investors who share the Funds'
investment goals. The Fund is no-load. The Scout Capital Preservation Fund seeks
long-term capital growth. Long-term capital growth is intended to be achieved
primarily by the Fund's investment in a diversified portfolio of equity
securities (common stocks and convertible securities). The shares offered by
this prospectus are not deposits or obligations of, nor guaranteed or endorsed
by, UMB Bank, n.a., or any of its affiliate banks. They are not federally
insured by the Federal Deposit Insurance Corporation (F.D.I.C.), the Federal
Reserve Board or any other agency. These shares may involve investment risks,
including the possible loss of the principal invested.
PURCHASE INFORMATION
Minimum Investment
Initial Purchase $1,000
(unless Automatic Monthly)
Initial IRA and Uniform Transfers
(Gifts) to Minors Purchases..................................$250
(unless Automatic Monthly)
Subsequent Purchases:
(unless Automatic Monthly)
By Mail......................................................$100
By Telephone Purchase (ACH)..................................$100
By Wire..................................................... $500
Automatic Monthly Purchases:
Initial......................................................$100
Subsequent....................................................$50
Shares are purchased and redeemed at net asset value. There are no sales,
redemption or Rule 12b-1 distribution charges. If you need further information,
please call the Fund at the telephone number indicated above.
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ADDITIONAL INFORMATION
This prospectus should be read and retained for future reference. It contains
the information that you should know before you invest. A "Statement of
Additional Information" of the same date as this prospectus has been filed with
the Securities and Exchange Commission and is incorporated by reference.
Investors desiring additional information about the Fund may obtain a copy
without charge by writing or calling the Fund at the telephone number indicated
above or by writing to the address on the cover.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Page
Fund Expenses................................................................1
Investment Objective and Portfolio Management Policy.........................1
Repurchase Agreements........................................................4
Risk Factors Applicable to Repurchase Agreements.............................4
Investment Restrictions......................................................4
Performance Measures.........................................................5
How to Purchase Shares.......................................................6
Initial Investments..........................................................6
Investments Subsequent to Initial Investment.................................7
Telephone Investment Service.................................................7
Automatic Monthly Investment Plan............................................8
How to Redeem Shares.........................................................8
Systematic Redemption Plan..................................................11
How to Exchange Shares Between Scout Funds..................................12
How Share Price is Determined...............................................13
Officers and Directors......................................................13
Manager and Underwriter.....................................................14
General Information and History.............................................15
Dividends, Distributions and Their Taxation.................................16
Shareholder Services........................................................18
Shareholder Inquiries.......................................................18
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SCOUT CAPITAL PRESERVATION FUND, INC.
FUND EXPENSES
The following information is provided in order to assist you in understanding
the various costs and expenses that a shareholder of the Fund will bear directly
or indirectly. The expenses set forth below are estimates for the initial fiscal
year of the Fund.
Shareholder Transaction Expenses
Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fees .85%
12b-1 fees None
Other expenses .02%
Total Fund operating expenses .87%
Example
You 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:
1 Year 3 Year
$9 $28
The above example should not be considered a representation of past or future
expenses, as actual expenses may be greater or less than those shown. The
assumed 5% annual return is hypothetical and should not be considered a
representation of past or future annual return. The actual return may be greater
or less than the assumed amount.
The various costs and expenses reflected in the foregoing Expense Tables and
Example are explained in more detail in this prospectus. "Other expenses" is
based on estimated amounts for the current fiscal year. Management fees are
discussed in greater detail under "Manager and Underwriter."
INVESTMENT OBJECTIVE AND
PORTFOLIO MANAGEMENT POLICY
The Scout Capital Preservation Fund's objective is to seek long-term capital
growth. Long-term capital growth is intended to be achieved primarily by the
Fund's investment in a diversified portfolio of equity securities (common stocks
and convertible securities). The Fund seeks to achieve its objective by
investing primarily in common stocks of companies whose earnings or tangible
assets are expected by the investment manager to outpace the rate of inflation.
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The Fund will normally invest in a diversified portfolio of securities. The Fund
has the flexibility to pursue its objective through any type or quality of
domestic or foreign security. In selecting investments, the manager will
consider economic and monetary conditions and projected inflation rates over
time. The manager will shift the proportions of each type of investment based on
its interpretation of economic conditions and underlying security valuations.
Normally the Fund will invest at least 65% of its total assets in equity
securities. The Fund will invest in equity securities of companies with a
significant potential for earnings growth or revaluation of assets.
The Fund will normally invest in the following equity or convertible securities:
1. Domestic companies of any size listed on an exchange or over-the-counter.
2. Foreign companies of any size with shares listed on a U.S. exchange or
over-the-counter or foreign companies with American Depository Receipts (ADRs)
which represent foreign securities and are traded on U.S. exchanges or
over-the-counter. The Fund may also invest directly in foreign securities.
The Fund will not be restricted as to market capitalization. However, under
normal circumstances, the Fund will not invest more than 25% of its equity
position in a single industry. Also, the Fund may not own more than 10% of the
outstanding voting securities of a single issuer. The Fund may not invest more
than 5% of its equity assets in any one issuer.
When, in the manager's judgment, market conditions warrant substantial temporary
investments in high-quality money market securities, the Fund may do so.
Investments in money market securities shall include government securities,
government agency securities, commercial paper, banker's acceptances, bank
certificates of deposit and repurchase agreements. Investment in commercial
paper is restricted to companies rated P2 or higher by Moody's or A-2 or higher
by Standard & Poor's.
The Fund cannot guarantee that its objectives will be achieved because there are
inherent risks in the ownership of the investments made by the Fund. The value
of the Fund's shares will reflect changes in the market value of its
investments, and dividends paid by the Fund will vary with the income it
receives from these investments.
Through careful management and diversification, the Fund will seek to reduce
risk and enhance the opportunities for long-term growth of capital. The
flexibility to realize relative value between asset classes, markets and
individual securities offers investors the opportunity to access undervalued
securities around the globe.
The Fund may also invest in the following fixed income securities:
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1. Direct obligations of the U.S. Government, such as bills, notes, bonds and
other debt securities issued by the U.S. Treasury.
2. Obligations of U.S. government agencies and instrumentalities which are
secured by the full faith and credit of the U.S. Treasury, such as securities of
the Government National Mortgage Association, the Export-Import Bank or the
Student Loan Marketing Association; or which are secured by the right of the
issuer to borrow from the Treasury, such as securities issued by the Federal
Financing Bank or the U.S. Postal Service; or are supported by the credit of the
government agency or instrumentality itself, such as securities of Federal Home
Loan Banks, Federal Farm Credit Banks or the Federal National Mortgage
Association.
3. Securities issued by corporations or other business organizations. The Fund
will generally invest in securities that, at the time of purchase, are
classified as investment grade by Moody's or by Standard & Poor's. Securities
that are subsequently downgraded to non-investment grade may continue to be held
by the Fund, and will be sold only if the manager believes it would be
advantageous to do so.
The Fund's investments in fixed income securities issued by corporations or
other business organizations will be classified, at the time of purchase, as
investment grade securities, which means that they will be rated Baa or higher
by Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's
Corporation. Although securities rated Baa by Moody's and BBB by Standard &
Poor's are considered to be investment grade, they have speculative
characteristics. Such securities carry a lower degree of risk than lower rated
securities.
Securities that are subsequently downgraded in quality below Baa by Moody's or
BBB by Standard & Poor's may continue to be held by the Fund, and will be sold
only if the Fund's adviser believes it would be advantageous to do so. In
addition, the credit quality of unrated securities purchased by the Fund must
be, in the opinion of the Fund's adviser, at least equivalent to a Baa rating by
Moody's or a BBB rating by Standard Poor's.
Investments in foreign securities involve risks in addition to those risks
associated with investments in the United States. Since stocks of foreign
companies are normally denominated in foreign currencies, the Fund may be
affected favorably or unfavorably by changes in currency rates and in exchange
control regulations, and may incur costs in connection with conversions between
various currencies.
As non-U.S. companies are not generally subject to uniform accounting, auditing
and financial reporting standards and practices comparable to those applicable
to U.S. companies, comparable information may not be readily available about
certain foreign companies. Securities of some non-U.S. companies may be less
liquid and more volatile than securities of comparable U.S. companies. In
addition, in certain foreign countries, there is the possibility of
expropriation or confiscatory taxation, political or social instability or
diplomatic developments which could affect U.S. investments in those countries.
The Fund will generally not trade in securities in order to obtain short-term
profits. However, when the Manager believes that circumstances warrant, the Fund
may buy and sell portfolio securities without regard to the length of time held.
The Fund's portfolio turnover rate is not expected to exceed 35% annually. A
high portfolio turnover rate may increase transaction costs and result in
additional taxable gains.
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REPURCHASE AGREEMENTS
A repurchase agreement involves the sale of securities to the Fund with the
concurrent agreement by the seller to repurchase the securities at the Fund's
cost plus interest at an agreed rate upon demand or within a specified time,
thereby determining the yield during the purchaser's period of ownership. The
result is a fixed rate of return insulated from market fluctuations during such
period. Under the Investment Company Act of 1940, repurchase agreements are
considered loans by the Fund.
The Fund will enter into such repurchase agreements only with United States
banks having assets in excess of $1 billion which are members of the Federal
Deposit Insurance Corporation, and with certain securities dealers who meet the
qualifications set from time to time by the Board of Directors. The term to
maturity of a repurchase agreement normally will be no longer than a few days.
Repurchase agreements maturing in more than seven days and other illiquid
securities will not exceed 10% of the net assets of the Fund.
RISK FACTORS APPLICABLE TO REPURCHASE AGREEMENTS
The use of repurchase agreements involves certain risks. For example, if the
seller of the agreement defaults on its obligation to repurchase the underlying
securities at a time when the value of these securities has declined, the Fund
may incur a loss upon disposition of them. If the seller of the agreement
becomes insolvent and subject to liquidation or reorganization under the
Bankruptcy Code or other laws, disposition of the underlying securities may be
delayed pending court proceedings. Finally, it is possible that the Fund may not
be able to perfect its interest in the underlying securities. While the Fund's
management acknowledges these risks, it is expected that they can be controlled
through stringent security selection criteria and careful monitoring procedures.
INVESTMENT RESTRICTIONS
In addition to the policies set forth under the caption "Investment Objective
and Portfolio Management Policy," the Fund is subject to certain other
restrictions which may not be changed without approval of the "holders of a
majority of the outstanding shares" of the Fund. Among these restrictions, the
more important ones are that the Fund will not: purchase the securities of any
issuer if, with respect to 75% of the Fund's total assets, more than 5% of the
Fund's total assets would be invested in the securities of such issuer, or the
Fund would hold more than 10% of any class of securities of such issuer; borrow
money in excess of 10% of total assets taken at market value, and then only from
banks as a temporary measure for extraordinary or emergency purposes; borrow to
increase income (leveraging) but only to facilitate redemption requests which
might otherwise require untimely dispositions of portfolio securities (interest
paid on such borrowings will reduce net income). The full text of these
restrictions are set forth in the "Statement of Additional Information."
As a matter of non-fundamental policy, the Fund may invest without limit in U.S.
Treasury Bills, or other obligations issued or guaranteed by the federal
government, its agencies and instrumentalities for temporary defensive purposes,
however, the Fund will normally invest no more than 35% of its total assets in
such securities.
4
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PERFORMANCE MEASURES
From time to time, the Fund may advertise its performance in various ways, as
summarized below. Further discussion of these matters also appears in the
"Statement of Additional Information." A discussion of Fund performance will be
included in the Fund's Annual Report to Shareholders which will be available
from the Fund upon request at no charge.
Total Return
The Fund may advertise "average annual total return" over various periods of
time. Such total return figures show the average percentage change in value of
an investment in the Fund from the beginning date of the measuring period to the
end of the measuring period. These figures reflect changes in the price of the
Fund's shares and assume that any income dividends and/or capital gains
distributions made by the Fund during the period were reinvested in shares of
the Fund. Figures will be given for recent one-, five- and ten-year periods (if
applicable), and may be given for other periods as well (such as from
commencement of the Fund's operations, or on a year-by-year basis). When
considering "average" total return figures for periods longer than one year, it
is important to note that a Fund's annual total return for any one year in the
period might have been greater or less than the average for the entire period.
Performance Comparisons
In advertisements or in reports to shareholders, the Fund may compare its
performance to that of other mutual funds with similar investment objectives and
to stock or other relevant indices. For example, it may compare its performance
to rankings prepared by Lipper Analytical Services, Inc. (Lipper), a widely
recognized independent service which monitors the performance of mutual funds.
The Fund may also compare its performance to the Standard & Poor's 500 Stock
Index (S&P 500), an index of unmanaged groups of common stocks, the Dow Jones
Industrial Average, a recognized unmanaged index of common stocks of 30
industrial companies listed on the NYSE or the Consumer Price Index. Performance
information, rankings, ratings, published editorial comments and listings as
reported in national financial publications such as Kiplinger's Personal Finance
Magazine, Business Week, Morningstar Mutual Funds, Investor's Business Daily,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, No-Load
Investor, Money, Forbes, Fortune and Barron's may also be used in comparing
performance of the Fund. Performance comparisons should not be considered as
representative of the future performance of any Fund. Further information
regarding the performance of the Fund is contained in the "Statement of
Additional Information."
Performance rankings, recommendations, published editorial comments and listings
reported in Money, Barron's, Kiplinger's Personal Finance Magazine, Financial
World, Forbes, U.S. News & World Report, Business Week, The Wall Street Journal,
Investors Business Daily, USA Today, Fortune and Stanger's may also be cited (if
the Fund is listed in any such publication) or used for comparison, as well as
performance listings and rankings from Morningstar Mutual Funds, Personal
Finance, Income and Safety, The Mutual Fund Letter, No-Load Fund Investor,
United Mutual Fund Selector, No-Load Fund Analyst, No-Load Fund X, Louis
Rukeyser's Wall
5
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Street newsletter, Donoghue's Money Letter, CDA Investment Technologies, Inc.,
Wiesenberger Investment Companies Service and Donoghue's Mutual Fund Almanac.
HOW TO PURCHASE SHARES
Shares are purchased from the Fund at net asset value (no sales charge) next
computed after a purchase order has become effective through its agent, Jones &
Babson, Inc., P.O. Box 410498, Kansas City, MO 64141-0498. For information call
toll free 1-800-996-2862. Purchase orders for the Fund become effective upon
receipt by the Fund.
The Fund reserves the right in its sole discretion to withdraw all or any part
of the offering made by this prospectus or to reject purchase orders when, in
the judgment of management, such withdrawal or rejection is in the best interest
of the Fund and its shareholders. The Fund also reserves the right at any time
to waive or increase the minimum requirements applicable to initial or
subsequent investments with respect to any person or class of persons, which
include shareholders of the Fund's special investment programs. The Fund
reserves the right to refuse to accept orders for Fund shares unless accompanied
by payment, except when a responsible person has indemnified the Fund against
losses resulting from the failure of investors to make payment. In the event
that the Fund sustains a loss as the result of failure by a purchaser to make
payment, the Fund's underwriter, Jones & Babson, Inc., will cover the loss.
INITIAL INVESTMENTS
Initial investments - By mail. You may open an account and make an investment by
completing and signing the application which accompanies this prospectus. The
minimum initial purchase is $1,000 unless your purchase is pursuant to an IRA or
the Uniform Transfers (Gifts) to Minors Act, in which case the minimum initial
purchase is $250. However, if electing the Automatic Monthly Investment Plan,
the minimum initial purchase is reduced to $100 for all accounts. Make your
check payable to UMB Bank, n.a. Mail your application and check to:
Scout Capital Preservation Fund, Inc.
P.O. Box 410498
Kansas City, MO 64141-0498
Initial investments - By wire. You may purchase shares of the Fund by wiring the
purchase price ($1,000 minimum) through the Federal Reserve Bank to the
custodian, UMB Bank, n.a. Prior to sending your money, you must call the Fund
toll free 1-800-996-2862 and provide it with the identity of the registered
account owner, the registered address, the Social Security or Taxpayer
Identification Number of the registered owner, the amount being wired, the name
and telephone number of the wiring bank and the person to be contacted in
connection with the order. You will then be provided a Fund account number,
after which you should instruct your bank to wire the specified amount, along
with the account number and the account registration to:
UMB Bank, n.a.
Kansas City, Missouri, ABA #101000695
For: Scout Capital Preservation Fund, Inc.
6
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AC=987090-8387
For Account No. (insert assigned Fund account
number and name in which account
is registered).
A completed application must be sent to the Fund as soon as possible so the
necessary remaining information can be recorded in your account. Payment of
redemption proceeds will be delayed until the completed application is received
by the Fund.
INVESTMENTS SUBSEQUENT TO INITIAL INVESTMENT
You may add to your Fund account at any time in amounts of $100 or more if
purchases are made by mail or telephone purchase (ACH), or $500 or more if
purchases are made by wire. Automatic monthly investments must be in amounts of
$50 or more.
Checks should be mailed to the Fund at its address, but made payable to UMB
Bank, n.a. Always identify your account number or include the detachable
reminder stub which accompanies each confirmation.
Wire share purchases should include your account registration, your account
number and the name of the Fund. It also is advisable to notify the Fund by
telephone that you have sent a wire purchase order to the bank.
TELEPHONE INVESTMENT SERVICE
To use the Telephone Investment Service, you must first establish your Fund
account and authorize telephone orders in the application form, or,
subsequently, on a special authorization form provided upon request. If you
elect the Telephone Investment Service and your request is received prior to
3:00 P.M. (Central Time), you may purchase Fund shares ($100 minimum) by
telephone and authorize the Fund to draft your checking account for the cost of
the shares so purchased. You will receive the next available price after the
Fund has received your telephone call. Availability and continuance of this
privilege is subject to acceptance and approval by the Fund and all
participating banks. During periods of increased market activity, you may have
difficulty reaching the Fund by telephone, in which case you should contact the
Fund by mail or telegraph. The Fund will not be responsible for the consequences
of delays including delays in the banking or Federal Reserve wire systems.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and if such procedures are followed, the
Fund will not be liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, but are not limited to, requiring
personal identification prior to acting upon instructions received by telephone,
providing written confirmations of such transactions and/or tape recording of
telephone instructions.
The Fund reserves the right to initiate a charge for this service and to
terminate or modify any or all of the privileges in connection with this service
at any time upon 15 days written notice to
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<PAGE>
shareholders, and to terminate or modify the privileges without prior notice in
any circumstances where such termination or modification is in the best interest
of the Fund and its shareholder.
AUTOMATIC MONTHLY INVESTMENT PLAN
You may elect to make monthly investments in a constant dollar amount from your
checking account ($50 minimum, after an initial investment of $100 or more for
any account). The Fund will draft your checking account on the same day each
month in the amount you authorize in your application, or, subsequently, on a
special authorization form provided upon request. Availability and continuance
of this privilege is subject to acceptance and approval by the Fund and all
participating banks. If the date selected falls on a day upon which the Fund
shares are not priced, investment will be made on the first date thereafter upon
which Fund shares are priced. The Fund will not be responsible for the
consequences of delays including delays in the banking or Federal Reserve wire
systems.
The Fund reserves the right to initiate a charge for this service and to
terminate or modify any or all of the privileges in connection with this service
at any time upon 15 days written notice to shareholders, and to terminate or
modify the privileges without prior notice in any circumstances where such
termination or modification is in the best interest of the Fund and its
shareholders.
HOW TO REDEEM SHARES
Shareholders registered in the stock records of the Fund may withdraw all or
part of their investment by redeeming shares for which the Fund has received
unconditional payment in the form of federal funds or such payment has been
converted to federal funds and accepted by the Fund.
In each instance you must comply with the general requirements relating to all
redemptions as well as with specific requirements set out for the particular
redemption method you select. If you wish to expedite redemptions by using the
telephone/telegraph privilege, you should carefully note the special
requirements and limitations relating to these methods.
All redemption requests must be transmitted to the Fund, P.O. Box 410498, Kansas
City, MO 64141-0498. Shareholders who have authorized telephone redemption may
call toll free 1-800- 996-2862. The Fund will redeem shares at the price (net
asset value per share) next effective after receipt of a redemption request in
"good order." (See "How Share Price is Determined.")
The Fund will endeavor to transmit redemption proceeds to the proper party, as
instructed, as soon as practicable after a redemption request has been received
in "good order" and accepted, but in no event later than the third business day
thereafter. Transmissions are made by mail unless an expedited method has been
authorized and specified in the redemption request. The Fund will not be
responsible for the consequences of delays including delays in the banking or
Federal Reserve wire systems.
Redemptions will not become effective until all documents in the form required
have been received. In the case of redemption requests made within 15 days of
the date of purchase, the
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Fund will delay transmission of proceeds until such time as it is certain that
unconditional payment in federal funds has been collected for the purchase of
shares being redeemed or 15 days from the date of purchase. You can avoid the
possibility of delay by paying for all of your purchases with a transfer of
federal funds.
Where additional documentation is normally required to support redemptions as in
the case of corporations, fiduciaries and others who hold shares in a
representative or nominee capacity such as certified copies of corporate
resolutions, or certificates of incumbency, or such other documentation as may
be required under the Uniform Commercial Code or other applicable laws or
regulations, it is the responsibility of the shareholder to maintain such
documentation on file and in a current status. A failure to do so will delay the
redemption. If you have questions concerning redemption requirements, please
write or telephone the Fund well ahead of an anticipated redemption in order to
avoid any possible delay.
Requests which are subject to special conditions or which specify an effective
date other than as provided herein cannot be accepted.
The right of redemption may be suspended or the date of payment postponed beyond
the normal three-day period when the New York Stock Exchange is closed or under
emergency circumstances as determined by the Securities and Exchange Commission.
Additional details are set forth in the "Statement of Additional Information."
Due to the high cost of maintaining smaller accounts, the Directors have
authorized the Fund to close shareholder accounts where their value falls below
the current minimum initial investment requirement at the time of initial
purchase as a result of redemptions and not as the result of market action, and
remains below this level for 60 days after each such shareholder account is
mailed a notice of: (1) the Fund's intention to close the account, (2) the
minimum account size requirement, and (3) the date on which the account will be
closed if the minimum size requirement is not met. Since the minimum investment
amount and the minimum account size are the same, any redemption from an account
containing only the minimum investment amount may result in redemption of that
account.
Withdrawal By Mail -- Shares may be redeemed by mailing your request to the
Fund. To be in "good order" the request must include the following:
(1) A written redemption request or stock assignment (stock power)
containing the genuine signature of each registered owner exactly as
the shares are registered, with clear identification of the account by
registered name(s), account number and the number of shares or the
dollar amount to be redeemed;
(2) any outstanding stock certificates representing shares to be redeemed;
(3) signature guarantees as required (see Signature Guarantees); and
(4) any additional documentation which the Fund may deem necessary to
insure a genuine redemption such as an application if one is not on
file, or in the case of corporations,
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fiduciaries and others who hold shares in a representative or nominee
capacity (see below).
Where additional documentation is normally required to support redemptions as in
the case of corporations, fiduciaries and others who hold shares in a
representative or nominee capacity, such as certified copies of corporate
resolutions, or certificates of incumbency, or such other documentation as may
be required under the Uniform Commercial Code or other applicable laws or
regulations, it is the responsibility of the shareholder to maintain such
documentation on file and in a current status. A failure to do so will delay the
redemption. If you have questions concerning redemption requirements, please
write or telephone the Fund well ahead of an anticipated redemption in order to
avoid any possible delay.
Signature Guarantees are required in connection with all redemptions of $50,000
or more by mail, or changes in share registration, except as hereinafter
provided. These requirements may be waived by the Fund in certain instances
where it appears reasonable to do so and will not unduly affect the interests of
other shareholders. Signature(s) must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of
1934. Eligible guarantor institutions include: (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; or (3)
securities broker/dealers which are members of a national securities exchange or
clearing agency or which have a minimum net capital of $100,000. A notarized
signature will not be sufficient for the request to be in proper form.
Signature guarantees will be waived for mail redemptions of $50,000 or less, but
they will be required if the checks are to be payable to someone other than the
registered owner(s), or are to be mailed to an address different from the
registered address of the shareholder(s), or where there appears to be a pattern
of redemptions designed to circumvent the signature guarantee requirement, or
where the Fund has other reason to believe that this requirement would be in the
best interests of the Fund and its shareholders.
Withdrawal By Telephone or Telegraph - You may withdraw any amount ($500 minimum
if wired) by telephone toll free 1-800-996-2862, or by telegraph to the Fund's
address. Telephone/telegraph redemption authorizations signed by all registered
owners with signatures guaranteed must be on file with the Fund before you may
redeem by telephone or telegraph. Funds will be sent only to the address of
record. The signature guarantee requirement may be waived by the Fund if the
request for this redemption method is made at the same time the initial
application to purchase shares is submitted.
All communications must include the Fund's name, your account number, the exact
registration of your shares, the number of shares or dollar amount to be
redeemed and the identity of the bank and bank account (name and number) to
which the proceeds are to be wired. This procedure may only be used for
non-certificated shares held in open account. For the protection of
shareholders, your redemption instructions can only be changed by filing with
the Fund new instructions on a form obtainable from the Fund which must be
properly signed with signature(s) guaranteed.
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Telephone or telegraph redemption proceeds may be transmitted to your
pre-identified bank account either by wire or mail to a domestic commercial bank
which is a member of the Federal Reserve System, or by credit to such account
with UMB Bank, n.a. as designated by you on your pre-authorization form. If you
elect to have proceeds wired to a bank other than UMB Bank, n.a., and your
request is received prior to 3:00 P.M. (Central Time), proceeds normally will be
wired the following business day. Once the funds are transmitted, the time of
receipt and the funds' availability are not under our control. If your request
is received on any day after the cut-off time, proceeds normally will be wired
on the second business day following the day of receipt of your request.
Normally your bank account with UMB Bank, n.a. will be credited on the following
business day for all requests. The Fund reserves the right to change its policy
or to refuse a telephone or telegraph redemption request or require additional
documentation to assure a genuine redemption, and, at its option, may pay such
redemption by wire or check and may limit the frequency or the amount of such
requests. The Fund reserves the right to terminate or modify any or all of the
services in connection with this privilege at any time without prior notice.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and if such procedures are followed, the
Fund will not be liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, but are not limited to requiring
personal identification prior to acting upon instructions received by telephone,
providing written confirmations of such transactions and/or tape recording of
telephone instructions. There are provisions on the telephone/telegraph
redemption authorization form limiting the liability of the Fund and Jones &
Babson, Inc. in this respect.
SYSTEMATIC REDEMPTION PLAN
If you own shares in an open account valued at $10,000 or more, and desire to
make regular monthly or quarterly withdrawals without the necessity and
inconvenience of executing a separate redemption request to initiate each
withdrawal, you may enter into a Systematic Withdrawal Plan by completing forms
obtainable from the Fund. For this service, the manager may charge you a fee not
to exceed $1.50 for each withdrawal. Currently, the manager assumes the
additional expenses arising out of this type of plan, but it reserves the right
to initiate such a charge at any time in the future when it deems it necessary.
If such a charge is imposed, participants will be provided 30 days notice.
Subject to a $50 minimum, you may withdraw each period a specified dollar
amount. Shares also may be redeemed at a rate calculated to exhaust the account
at the end of a specified period of time.
Dividends and capital gains distributions must be reinvested in additional
shares. Under all withdrawal programs, liquidation of shares in excess of
dividends and distributions reinvested will diminish and may exhaust your
account, particularly during a period of declining share values.
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<PAGE>
You may revoke or change your plan or redeem all of your remaining shares at any
time. Withdrawal payments will be continued until the shares are exhausted or
until the Fund or you terminate the plan by written notice to the other.
HOW TO EXCHANGE SHARES BETWEEN SCOUT FUNDS
Shareholders may exchange their Fund shares, which have been held in open
account for 15 days or more, and for which good payment has been received, for
identically registered shares of any other Fund in the Scout Fund Group, which
is legally registered for sale in the state of residence of the investor
provided that the minimum amount exchanged from the Fund has a value of $1,000
or more and meets the minimum investment requirement of the Fund into which it
is exchanged. An exchange between two Scout Funds is treated as a sale of the
shares from which the exchange occurs and a purchase of shares of the Fund into
which the exchange occurs. Exchanging shareholders will receive the next quoted
prices for their shares after the request is received in "good order." (See "How
Share Price is Determined.")
To authorize the Telephone/Telegraph Exchange Privilege, all registered owners
must authorize this privilege on the original application, or the Fund must
receive a special authorization form, provided upon request. During periods of
increased market activity, you may have difficulty reaching the Fund by
telephone, in which case you should contact the Fund by mail or telegraph. The
Fund reserves the right to initiate a charge for this service and to terminate
or modify any or all of the privileges in connection with this service at any
time and without prior notice under any unforeseen circumstances where
continuance of these privileges would be detrimental to the Fund or its
shareholders, such as an emergency, or where the volume of such activity
threatens the ability of the Fund to conduct business, or under any other
circumstances, upon 60 days written notice to shareholders. The Fund will not be
responsible for the consequences of delays including delays in the banking or
Federal Reserve wire systems.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, and if such procedures are not followed,
the Fund may be liable for losses due to unauthorized or fraudulent
instructions. Such procedures may include, but are not limited to requiring
personal identification prior to acting upon instructions received by telephone,
providing written confirmations of such transactions and/or tape recording of
telephone instructions.
Exchanges by mail may be accomplished by a written request properly signed by
all registered owners identifying the account by name and number, the number of
shares or dollar amount to be redeemed for exchange and the Scout Fund into
which the account is being transferred.
If you wish to exchange part or all of your shares in the Fund for shares of
another Fund in the Scout Fund Group, you should review the prospectus
carefully. Any such exchange will be based upon the respective net asset values
of the shares involved. An exchange between Funds involves the sale of an asset.
Unless the shareholder account is tax-deferred, this is a taxable event.
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HOW SHARE PRICE IS DETERMINED
The net asset value per share of the Fund is computed once daily, Monday through
Friday, at the specific time during the day that the Board of Directors of the
Fund sets at least annually, except on days on which changes in the value of
portfolio securities will not materially affect the net asset value, or days
during which no security is tendered for redemption and no order to purchase or
sell such security is received by the Fund, or customary holidays. For a list of
the holidays during which the Fund is not open for business, see "How Share
Price is Determined" in the "Statement of Additional Information."
The per share calculation is made by subtracting from total assets any
liabilities and then dividing into this net amount the total outstanding shares
as of the date of the calculation.
The price at which new shares of the Fund will be sold and at which issued
shares presented for redemption will be liquidated is computed once daily at
3:00 P.M. (Central Time), except on those days when the Fund is not open for
business.
Money market securities which on the date of valuation have 60 days or less to
maturity, are valued on the basis of the amortized cost valuation technique
which involves valuing a security at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument.
Each security listed on an Exchange is valued at its last sale price on that
Exchange on the date as of which assets are valued. Where the security is listed
on more than one Exchange, the Fund will use the price of that Exchange which is
generally considered to be the principal Exchange on which the security is
traded. Lacking sales, the security is valued at the mean between the current
closing bid and asked prices. An unlisted security for which over-the-counter
market quotations are readily available is valued at the mean between the last
current bid and asked prices. When market quotations are not readily available,
any security or other asset is valued at its fair value as determined in good
faith by the Board of Directors.
Debt securities (other than short-term obligations), including listed issues,
are valued on the basis of valuations furnished by a pricing service which
utilizes both dealer-supplied valuations and electronic data processing
techniques which take into account appropriate factors such as institution-size
trading in similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, trading characteristics and other market data, without exclusive
reliance upon exchange or over-the-counter prices, since such valuations are
believed to reflect more accurately the fair value of such securities. Use of
the pricing service has been approved by the Fund's Board of Directors.
OFFICERS AND DIRECTORS
The officers of the Fund manage its day-to-day operations. The Fund's manager
and officers are subject to the supervision and control of the Board of
Directors. A list of the officers and directors of the Fund and a brief
statement of their present positions and principal occupations during the past
five years is set forth in the "Statement of Additional Information."
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<PAGE>
MANAGER AND UNDERWRITER
Jones & Babson, Inc. was founded in 1960. It organized the Fund in 1997 and acts
as its principal underwriter at no cost to the Fund.
UMB Bank, n.a. is the Fund's manager and investment adviser and provides or pays
the cost of all management, supervisory and administrative services required in
the normal operation of the Fund.
The various costs borne by UMB Bank, n.a., include investment management and
supervision; fees of the custodian, independent public accountants and legal
counsel; remuneration of officers, directors and other personnel; rent;
shareholder services, including the maintenance of the shareholder accounting
system and transfer agency; and such other items as are incidental to corporate
administration. Not considered normal operating expenses, and therefore payable
by the Fund, are taxes, fees and other charges of governments and their
agencies, including the cost of qualifying the Fund's shares for sale in any
jurisdiction, interest, brokerage costs and all costs and expenses including
legal and accounting fees incurred in anticipation of or arising out of
litigation or administrative proceedings to which the Fund, its officers or
directors may be subject or a party thereto.
Jones & Babson, Inc. acts as principal underwriter for the Fund at no cost to
the Fund. UMB Bank, n.a. employs at its own expense Jones & Babson, Inc. to
provide services to the Fund, including the maintenance of the shareholder
accounting system and transfer agency, and such other items as are incidental to
corporate administration. The cost of the services of Jones & Babson, Inc. is
included in the fee of UMB Bank, n.a.
As compensation for all the foregoing services, the Fund pays UMB Bank, n.a. a
fee at the annual rate of 85/100 of one percent (.85%) of its total net assets,
which is computed daily and paid semimonthly.
UMB Bank, n.a., is also the investment manager for the eight other mutual funds
within the Scout Fund Group and currently manages approximately $12.5 billion in
client assets on a discretionary basis. The Bank serves a broad variety of
individual, corporate and other institutional clients by maintaining an
extensive research and analytical staff. It has an experienced investment
analysis and research staff which eliminates the need for the Fund to maintain
an extensive duplicate staff, with the consequent increase in the cost of
investment advisory service.
David R. Bagby is the portfolio manager for Scout Capital Preservation Fund. He
has been with UMB Bank, n.a., since 1993 and has over 24 years of investment
management experience. Mr. Bagby is a Chartered Financial Analyst.
The Management Agreement limits the liability of the manager, as well as its
officers, directors and personnel, to acts or omissions involving willful
malfeasance, bad faith, gross negligence or reckless disregard of their duties.
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<PAGE>
Certain officers and directors of the Fund are also officers or directors or
both of other Scout Funds or Jones & Babson, Inc.
Jones & Babson, Inc. is a wholly-owned subsidiary of Business Men's Assurance
Company of America, which is considered to be a controlling person under the
Investment Company Act of 1940. Assicurazioni Generali S.p.A., an insurance
organization founded in 1831 based in Trieste, Italy, is considered to be a
controlling person and is the ultimate parent of Business Men's Assurance
Company of America. Mediobanca is a 5% owner of Generali.
The current Management Agreement between the Fund and UMB Bank, n.a. will
continue in effect until October 31, 1999, and will continue automatically for
successive annual periods ending each October 31 so long as such continuance is
specifically approved at least annually by the Board of Directors of the Fund or
by the vote of a majority of the outstanding voting securities of the Fund, and,
provided also that such continuance is approved by the vote of a majority of the
directors who are not parties to the Agreement or interested persons of any such
party at a meeting held in person and called specifically for the purpose of
evaluating and voting on such approval. The Agreement provides that either party
may terminate by giving the other 60 days written notice. The Agreement
terminates automatically if assigned by either party, as required under the
Investment Company Act of 1940.
GENERAL INFORMATION AND HISTORY
The Fund, incorporated in Maryland on October 16, 1997, has a present authorized
capitalization of 10,000,000 shares of $1 par value common stock. The Fund may
divide its shares into separate series and classes without the approval of its
Board of Directors. The Fund currently issues a single class of shares which all
have like rights and privileges. Each full and fractional share, when issued and
outstanding, has: (1) equal voting rights with respect to matters which affect
the Fund; and (2) equal dividend, distribution and redemption rights to the
assets of the Fund. Shares when issued are fully paid and non-assessable. The
Fund will not issue any senior securities. Shareholders do not have pre-emptive
or conversion rights.
Non-cumulative voting - These shares have non-cumulative voting rights, which
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 less than 50% of the shares voting will not
be able to elect any directors.
The Maryland General Corporation Law permits registered investment companies,
such as the Fund, to operate without an annual meeting of shareholders under
specified circumstances if an annual meeting is not required by the Investment
Company Act of 1940. There are procedures whereby the shareholders may remove
directors. These procedures are described in the "Statement of Additional
Information" under the caption "Officers and Directors." The Fund has adopted
the appropriate provisions in its By-Laws and will not hold annual meetings of
shareholders for the following purposes unless required to do so: (1) election
of directors; (2) approval of any investment advisory agreement; (3)
ratification of the selection of independent public accountants; and (4)
approval of a distribution plan. As a result, the Fund does not intend to hold
annual meetings.
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Federal Banking Laws - The Glass-Steagall Act is a federal law that prohibits
national banks from sponsoring, distributing or controlling a registered
open-end investment company. It is possible that certain activities of UMB Bank,
n.a. relating to the Fund may be claimed to be comparable to the matters covered
by such provisions. It is not expected that any conclusions regarding such
activities of UMB Bank, n.a. would have any material effect on the assets of the
Fund or its shareholders, because the Fund's distribution is under the control
of Jones & Babson, Inc., the Fund's distributor, which is not subject to the
Glass-Steagall Act. Although it is not anticipated that decisions under the
Glass-Steagall Act adverse to UMB Bank, n.a. would have any material effect on
the conduct of the Fund's operations, if any unanticipated changes affecting the
Fund's operations were deemed appropriate the Board of Directors would promptly
consider suitable adjustments.
The Fund may use the name "Scout" in its name so long as UMB Bank, n.a. is
continued as its manager. Complete details with respect to the use of the name
are set out in a licensing agreement between the Fund, Jones & Babson, Inc. and
UMB Bank, n.a.
This prospectus omits certain of the information contained in the registration
statement filed with the Securities and Exchange commission, Washington, D.C.
These items may be inspected at the offices of the Commission or obtained from
the Commission upon payment of the fee prescribed.
DIVIDENDS, DISTRIBUTIONS AND THEIR TAXATION
The Fund pays dividends from net investment income semiannually, usually in June
and December. Distributions from capital gains realized on the sale of
securities, if any, will be declared annually on or before December 31. Dividend
and capital gains distributions will be reinvested automatically in additional
shares at the net asset value per share computed and effective at the close of
business on the day after the record date, unless the shareholder has elected on
the original application, or by written instructions filed with the Fund, to
have them paid in cash.
The Fund intends to qualify for taxation as a "regulated investment company"
under the Internal Revenue Code so that the Fund will not be subject to federal
income tax to the extent that it distributes its income to its shareholders. As
such, the Fund will not be subject to federal income tax, or to any excise tax,
to the extent its earnings are distributed as provided in the Internal Revenue
Code and by satisfying certain other requirements relating to the sources of its
income and diversification of its assets. Dividends, either in cash or in
reinvested shares, paid by the Fund from net investment income will be taxable
to shareholders as ordinary income, and will generally qualify in part for the
70% dividends-received deduction for corporations. The portion of the dividends
so qualified depends on the aggregate taxable qualifying dividend income
received by the Fund from domestic (U.S.) sources. The Fund will send to
shareholders a statement each year advising the amount of the dividend income
which qualifies for such treatment.
Dividends from net investment income on net short-term gains will be taxable to
those investors who are subject to income taxes as ordinary income, whether
received in cash or in additional shares. Whether paid in cash or additional
shares of the Fund, and regardless of the length of
16
<PAGE>
time Fund shares have been owned by the shareholder, distributions from
long-term capital gains are taxable to shareholders as such, but are not
eligible for the dividends-received deduction for corporations. The Fund does
not try to realize any particular amount of capital gains during a year; rather,
realized gains are a by-product of Fund management activities. Consequently,
capital gains distributions may be expected to vary considerably from year to
year. Also, for those investors subject to tax, if purchases of shares in a Fund
are made shortly before a record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
The 1997 Act creates a category of long-term capital gain for individual
taxpayers that will be taxed at new lower tax rates. For investors who are in
the 28% or higher federal income tax brackets, these gains will be taxed at a
maximum of 20%. For investors who are in the 15% federal income tax bracket,
these gains will be taxed at a maximum of 10%. Capital gain distributions will
qualify for these new maximum tax rates, depending on when the Fund's securities
were sold and how long they were held by the Fund before they were sold.
Investors who want more information on holding periods and other qualifying
rules relating to these new rates should review the expanded discussion in the
"Statement of Additional Information", or should contact their personal tax
advisors. Shareholders are notified annually by the Fund as to federal tax
status of dividends and distributions paid by the Fund. Such dividends and
distributions may also be subject to state and local taxes.
Exchange and redemption of Fund shares are taxable events for federal income tax
purposes. Shareholders may also be subject to state and municipal taxes on such
exchanges and redemptions. Any loss incurred on a sale or exchange of Fund
shares held for six months or less will be treated as a long-term capital loss
to the extent of capital gain dividends received with respect to such shares.
You should consult your tax adviser with respect to the tax status of
distributions from the Fund in your state and locality.
The Fund intends to declare and pay dividends and capital gains distributions so
as to avoid imposition of the federal excise tax. To do so, the Fund expects to
distribute during each calendar year an amount equal to: (1) 98% of its calendar
year ordinary income; (2) 98% of its capital gains net income (the excess of
short- and long-term capital gain over short- and long-term capital loss) for
the one-year period ending each October 31; and (3) 100% of any undistributed
ordinary or capital gain net income from the prior calendar year. Dividends
declared in October, November or December and made payable to shareholders of
record in such a month are deemed to have been paid by the Fund and received by
shareholders on December 31 of such year, so long as the dividends are actually
paid before February 1 of the following year.
To comply with IRS regulations, the Fund is required by federal law to withhold
31% of reportable payments (which may include dividends, capital gains
distributions and redemptions) paid to shareholders who have not complied with
IRS regulations. In order to avoid this withholding requirement, shareholders
must certify on their Application, or on a separate form supplied by the Fund,
that their Social Security or Taxpayer Identification Number provided is correct
and that they are not currently subject to backup withholding, or that they are
exempt from backup withholding.
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<PAGE>
The federal income tax status of all distributions will be reported to
shareholders each January as a part of the annual statement of shareholder
transactions. Shareholders not subject to tax on their income will not be
required to pay tax on amounts distributed to them.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED HEREIN FOR GENERAL
INFORMATION ONLY. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN
TAX ADVISERS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF AN
INVESTMENT IN THE FUND.
SHAREHOLDER SERVICES
The Fund and its manager offer shareholders a broad variety of services
described throughout this prospectus. In addition, the following services are
available.
Prototype Retirement Plans - UMB Bank, n.a. has drafted several
IRS-approved-as-to-form prototype retirement plans to assist individuals, sole
proprietors, partnerships and corporations in meeting their tax qualified
retirement plan needs.
Individual Retirement Account (IRA) - The Bank also makes available IRA accounts
for individuals.
For further information about these services, please contact UMB Bank, n.a.
SHAREHOLDER INQUIRIES
Telephone inquiries may be made toll free to the Fund, 1-800-996-2862.
Shareholders may address written inquiries to the Fund at:
Scout Capital Preservation Fund, Inc.
P.O. Box 410498
Kansas City, MO 64141-0498
For express delivery services:
Scout Capital Preservation Fund, Inc.
BMA Tower
700 Karnes Blvd.
Kansas City, MO 64108-3306
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Scout Stock Fund
Scout Regional Fund
Scout WorldWide Fund
Scout Capital Preservation Fund
Scout Bond Fund
Scout Balanced Fund
Scout Money Market Fund
Scout Tax-Free Money Market Fund
Scout Kansas Tax-Exempt Bond Fund*
No-Load Mutual Funds
* Available in Kansas and Missouri only
Manager and Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Auditors
Baird, Kurtz & Dobson, Kansas City, Missouri
Legal Counsel
Stradley, Ronon, Stevens & Young, LLP
Philadelphia, Pennsylvania
John G. Dyer, Kansas City, Missouri
Custodian
UMB Bank, n.a., Kansas City, Missouri
JONES & BABSON
MUTUAL FUNDS
P.O. Box 410498
Kansas City, MO 64141-0498
TOLL-FREE 1-800-996-2862
The Scout Funds
Scout Capital
Preservation Fund
Prospectus
February __, 1998
JB15D 2/98
19
<PAGE>
PART B
SCOUT CAPITAL PRESERVATION FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
February __, 1998
This Statement is not a Prospectus but should be read in conjunction
with the Fund's current Prospectus dated February __, 1998. To obtain the
Prospectus please call the Fund toll-free at 1-800-996-2862.
TABLE OF CONTENTS
Page
Investment Objective and Policies...................................1
Portfolio Transactions..............................................1
Investment Restrictions.............................................3
Performance Measures................................................3
How the Fund's Shares are Distributed...............................4
How Share Purchases are Handled.....................................4
Redemption of Shares................................................5
Signature Guarantees................................................6
Dividends, Distributions and Taxes..................................6
Manager and Underwriter.............................................8
How Share Price is Determined.......................................9
Officers and Director...............................................9
Custodian..........................................................12
Independent Certified Public Accountants...........................12
Fixed Income Securities Described and Ratings......................12
Other Scout Funds..................................................16
Financial Statements...............................................17
INVESTMENT OBJECTIVE AND POLICIES
The following policies supplement the Fund's investment objective and policies
set forth in the Prospectus.
PORTFOLIO TRANSACTIONS
Decisions to buy and sell securities for the Fund are made by UMB Bank, n.a.
Officers of the Fund and Jones & Babson, Inc. are generally responsible for
implementing or supervising these decisions, including allocation of portfolio
brokerage and principal business and the negotiation of commissions and/or the
price of the securities.
<PAGE>
The Fund in purchasing and selling portfolio securities will seek the best
available combination of execution and overall price (which shall include the
cost of the transaction) consistent with the circumstances which exist at the
time. The Fund does not intend to solicit competitive bids on each transaction.
The Fund believes it is in its best interest and that of its shareholders to
have a stable and continuous relationship with a diverse group of financially
strong and technically qualified broker-dealers who will provide quality
executions at competitive rates. Broker-dealers meeting these qualifications
also will be selected for their demonstrated loyalty to the Fund, when acting on
its behalf, as well as for any research or other services provided to the Fund.
The Fund normally will not pay a higher commission rate to broker-dealers
providing benefits or services to it than it would pay to broker-dealers who do
not provide such benefits or services. However, the Fund reserves the right to
do so within the principles set out in Section 28(e) of the Securities Exchange
Act of 1934 when it appears that this would be in the best interests of the
shareholders.
No commitment is made to any broker or dealer with regard to placing of orders
for the purchase or sale of Fund portfolio securities, and no specific formula
is used in placing such business. Allocation is reviewed regularly by both the
Board of Directors of the Fund and by UMB Bank, n.a.
Since the Fund does not market its shares through intermediary brokers or
dealers, it is not the Fund's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, it may place portfolio orders with qualified broker-dealers who
recommend the Fund to other clients, or who act as agent in the purchase of the
Fund's shares for their clients.
Research services furnished by broker-dealers may be useful to the Fund manager
in serving other clients, as well as the Fund. Conversely, the Fund may benefit
from research services obtained by the manager from the placement of portfolio
brokerage of other clients.
When it appears to be in the best interests of its shareholders, the Fund may
join with other clients of the manager in acquiring or disposing of a portfolio
holding. Securities acquired or proceeds obtained will be equitably distributed
between the Fund and other clients participating in the transaction. In some
instances, this investment procedure may affect the price paid or received by
the Fund or the size of the position obtained by the Fund.
The Fund does not intend to purchase securities solely for short-term trading;
nor will securities be sold for the sole purpose of realizing gains. However, a
security may be sold and another of comparable quality purchased at
approximately the same time to take advantage of what the Fund's manager
believes to be a disparity in the normal yield relationship between the two
securities. In addition, a security may be sold and another purchased when, in
the opinion of management, a favorable yield spread exists between specific
issues or different market sectors.
Short-term debt instruments with maturities of less than one year are excluded
from the calculation of portfolio turnover.
2
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INVESTMENT RESTRICTIONS
In addition to the investment objective and portfolio management policies set
forth in the Prospectus under the caption "Investment Objective and Portfolio
Management Policy", the following restrictions also may not be changed without
approval of the "holders of a majority of the outstanding shares" of the Fund.
The Fund will not: (1) as to 75% of its total assets, purchase the securities of
any one issuer, except the United States government, if immediately after and as
a result of such purchase (a) the value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value of the Fund's total assets, or
(b) the Fund owns more than 10% of the outstanding voting securities, or any
other class of securities, of such issuer; (2) engage in the purchase or sale of
real estate or commodities; (3) underwrite the securities of other issuers; (4)
make loans to other persons, except by the purchase of debt obligations which
are permitted under its policy (the purchase of a security subject to a
repurchase agreement or the purchase of a portion of publicly distributed debt
securities is not considered a loan); (5) purchase securities on margin, or sell
securities short; (6) borrow or pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at the lower of fair market value
or cost) for temporary or emergency purposes, and not for the purpose of
leveraging its investments, and provided further that any borrowing in excess of
5% of the total assets of the Fund shall have asset coverage of at least 3 to 1;
or (7) issue senior securities except for those investment procedures
permissible under the Fund's other restrictions.
The following are "non-fundamental" restrictions, which may be changed by the
Board of Directors of the Fund without shareholder approval:
The Fund will not: (1) invest in companies for the purpose of exercising control
of management; (2) purchase shares of other investment companies except as
permitted under the Investment Company Act of 1940, as amended from time to
time, or pursuant to a plan of merger or consolidation; (3) invest in the
aggregate more than 5% of the value of its gross assets in the securities of
issuers (other than federal, state, territorial, or local governments, or
corporations, or authorities established thereby), which, including
predecessors, have not had at least three years' continuous operations; (4)
enter into dealings with its officers or directors, its manager or underwriter,
or their officers or directors, or any organization in which such persons have a
financial interest except for transactions in the Fund's own shares or other
securities through brokerage practices which are considered normal and generally
accepted under the circumstances existing at the time; or (5) invest in
securities issued by UMB Financial Corporation or affiliate banks of UMB
Financial Corporation.
PERFORMANCE MEASURES
Total Return
"Average annual total return" figures are computed according to a formula
prescribed by the Securities and Exchange Commission. The formula can be
expressed as follows:
3
<PAGE>
P(1+T)n = ERV
Where: P = a hypothetical initial payment
of $1,000
T = average annual
total return
n = number of years
ERV = Ending Redeemable Value of
a hypothetical $1,000
payment made at the
beginning of the 1, 5 or 10
year (or other) periods at the
end of the 1, 5 or 10 year (or
other) periods (or fractional
portions thereof).
HOW THE FUND'S SHARES ARE DISTRIBUTED
Jones & Babson, Inc., as agent of the Fund, agrees to supply its best efforts as
sole distributor of the Fund's shares and, at its own expense, pay all sales and
distribution expenses in connection with their offering other than registration
fees and other government charges.
Jones & Babson, Inc. does not receive any fee or other compensation under the
distribution agreement with the Fund which continues in effect until October 31,
1999 and which will continue automatically for successive annual periods ending
each October 31, if continued at least annually by the Fund's Board of
Directors, including a majority of those directors who are not parties to such
Agreement or interested persons of any such party. It terminates automatically
if assigned by either party or upon 60 days written notice by either party to
the other.
HOW SHARE PURCHASES ARE HANDLED
Each order accepted will be fully invested in whole and fractional shares,
unless the purchase of a certain number of whole shares is specified, at the net
asset value per share next effective after the order is accepted by the Fund.
Each investment is confirmed by a year-to-date statement which provides the
details of the immediate transaction, plus all prior transactions in your
account during the current year. This includes the dollar amount invested, the
number of shares purchased or redeemed, the price per share and the aggregate
shares owned. A transcript of all activity in your account during the previous
year will be furnished each January. By retaining each annual summary and the
last year-to-date statement, you have a complete detailed history of your
account which provides
4
<PAGE>
necessary tax information. A duplicate copy of a past annual statement is
available from Jones & Babson, Inc. at its cost, subject to a minimum charge of
$5 per account, per year requested.
Normally, the shares which you purchase are held by the Fund in open account,
thereby relieving you of the responsibility of providing for the safekeeping of
a negotiable share certificate. Should you have a special need for a
certificate, one will be issued on request for all or a portion of the whole
shares in your account. There is no charge for the first certificate issued. A
charge of $3.50 will be made for any replacement certificates issued. In order
to protect the interests of the other shareholders, share certificates will be
sent to those shareholders who request them only after the Fund has determined
that unconditional payment for the shares represented by the certificate has
been received by its custodian, UMB Bank, n.a.
If an order to purchase shares must be canceled due to non-payment, the
purchaser will be responsible for any loss incurred by the Fund arising out of
such cancellation. To recover any such loss, the Fund reserves the right to
redeem shares owned by any purchaser whose order is canceled, and such purchaser
may be prohibited or restricted in the manner of placing further orders.
The Fund reserves the right in its sole discretion to withdraw all or any part
of the offering made by the Prospectus or to reject purchase orders when, in the
judgment of management, such withdrawal or rejection is in the best interest of
the Fund and its shareholders. The Fund also reserves the right at any time to
waive or increase the minimum requirements applicable to initial or subsequent
investments with respect to any person or class of persons, which include
shareholders of the Fund's special investment programs.
REDEMPTION OF SHARES
The right of redemption may be suspended, or the date of payment postponed
beyond the normal three-day period by the Fund's Board of Directors under the
following conditions authorized by the Investment Company Act of 1940: (1) for
any period (a) during which the New York Stock Exchange is closed, other than
customary weekend and holiday closing, or (b) during which trading on the New
York Stock Exchange is restricted; (2) for any period during which an emergency
exists as a result of which (a) disposal by the Fund of securities owned by it
is not reasonably practicable, or (b) it is not reasonably practicable for the
Fund to determine the fair value of its net assets; or (3) for such other
periods as the Securities and Exchange Commission may by order permit for the
protection of the Fund's shareholders.
The Fund may satisfy redemption requests by distributing securities in-kind. If
shares are redeemed in-kind, the redeeming shareholder may incur brokerage costs
in converting the assets to cash. The method of valuing securities used to make
redemptions in kind will be the same as the method of valuing portfolio
securities described under "How Share Price is Determined" in the Prospectus,
and such valuation will be made as of the same time the redemption price is
determined.
5
<PAGE>
SIGNATURE GUARANTEES
Signature guarantees normally reduce the possibility of forgery and are required
in connection with each redemption method to protect shareholders from loss.
Signature guarantees are required in connection with all redemptions of $50,000
or more by mail or changes in share registration, except as provided in the
Prospectus.
Signature guarantees must appear together with the signatures(s) of the
registered owner(s), on:
(1) a written request for redemption;
(2) a separate instrument of assignment, which should specify the total number
of shares to be redeemed (this "stock power" may be obtained from the Fund
or from most banks or stock brokers); or
(3) all stock certificates tendered for redemption.
DIVIDENDS, DISTRIBUTIONS AND TAXES
Distributions of Net Investment Income--The Fund receives income generally in
the form of dividends, interest, original issue, market and acquisition
discount, and other income derived from its investments. This income, less
expenses incurred in the operation of the Fund, constitutes its net investment
income from which dividends may be paid to you. Any distributions by the Fund
from such income will be taxable to you, whether you take them in cash or in
additional shares.
Distributions of Capital Gains--The Fund may derive capital gains and losses in
connection with sales or other dispositions of its portfolio securities.
Distributions derived from the excess of net short-term capital gains over net
long-term capital losses will be taxable to you as ordinary income.
Distributions paid from long-term capital gains realized by the Fund will be
taxable to you as long-term capital gain, regardless of how long you have held
your shares in the Fund. Any net short-term or long-term capital gains realized
by the Fund (net of any capital loss carryovers) will generally be distributed
once each year, and may be distributed more frequently, if necessary, in order
to reduce or eliminate federal excise or income taxes on the Fund.
Under the Taxpayer Relief Act of 1997 (the "1997 Act"), the Fund is required to
track its sales of portfolio securities and to report its capital gain
distributions to you according to the following categories of holding periods:
"28 percent tax rate gains:" securities sold by the Fund after July 28, 1997
that were held for more than one year but not more than 18 months, and under a
transitional rule securities sold by the Fund before May 7, 1997 that were held
for more than 12 months. These gains will be taxable to individual investors at
a maximum rate of 28%.
6
<PAGE>
"20 percent tax rate gains:" securities sold by the Fund after July 28, 1997
that were held for more than 18 months, and under a transitional rule securities
sold by the Fund between May 7, 1997 and July 28, 1997 that were held for more
than 12 months. These gains will be taxable to individual investors at a maximum
rate of 20% for investors in the 28% or higher federal income tax rate brackets,
and at a maximum rate of 10% for investors in the 15% federal income tax rate
bracket.
"Qualified 5-year gains:" For individuals in the 15% federal income tax rate
bracket, qualified 5-year gains are net gains on securities held for more than 5
years which are sold after December 31, 2000. For individuals who are subject to
tax at higher federal income tax rate brackets, qualified 5-year gains are net
gains on securities which are purchased after December 31, 2000 and are held for
more than 5 years. Taxpayers subject to tax at the higher federal income tax
rate brackets may also make an election for shares held on January 1, 2001 to
recognize gain on their shares in order to qualify such shares as qualified
5-year property. These gains will be taxable to individual investors at a
maximum rate of 18% for investors in the 28% or higher federal income tax
brackets, and at a maximum rate of 8% for investors in the 15% federal income
tax rate bracket.
The Fund will advise you in its annual information reporting at calendar year
end of the amount of its capital gain distributions which will qualify for these
maximum federal tax rates for each calendar year. Questions concerning each
investor's personal tax reporting should be addressed to the investor's personal
tax advisor.
Election to be Taxed as a Regulated Investment Company--The Fund has elected to
be treated as a regulated investment company under Subchapter M of the Internal
Revenue Code ("Code"), and intends to so qualify during the current fiscal year.
The directors reserve the right not to maintain the qualification of the Fund as
a regulated investment company if they determine such course of action to be
beneficial to you. In such case, the Fund will be subject to federal and
possibly state corporate taxes on its taxable income and gains, and
distributions to you will be taxed as ordinary dividend income to the extent of
the Fund's available earnings and profits.
In order to qualify as a regulated investment company for federal income tax
purposes, the Fund must meet certain specific requirements, including:
(i) The Fund must maintain a diversified portfolio of securities, wherein no
security (other than U.S. Government securities and securities of other
regulated investment companies) can exceed 25% of the Fund's total assets, and,
with respect to 50% of the Fund's total assets, no investment (other than cash
and cash items, U.S. Government securities and securities of other regulated
investment companies) can exceed 5% of the Fund's total assets;
(ii) The Fund must derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans and gains from the sale or
disposition of stock or securities or foreign currencies, or other income
derived with respect to its business of investing in such stock, securities or
currencies;
7
<PAGE>
(iii) The Fund must distribute to its shareholders at least 98% of its net
investment income and net tax-exempt income for each of its fiscal years; and
(iv) The Fund must realize less than 30% of its gross income for each fiscal
year from gains from the sale of securities and certain other assets that have
been held by the Fund for less than three months ("short-short income"). The
1997 Act repealed the 30% short-short income test for tax years of regulated
investment companies beginning after August 5, 1997; however, this rule may have
continuing effect in some states for purposes of classifying the Fund as a
regulated investment company.
Excise Tax Distribution Requirements--The Code requires the Fund to distribute
at least 98% of its taxable ordinary income earned during the calendar year and
98% of its capital gain net income earned during the 12-month period ending
October 31 (in addition to amounts from the prior year that were neither
distributed nor taxed to the Fund) to you by December 31 of each year in order
to avoid federal excise taxes. The Fund intends as a matter of policy to declare
and pay sufficient dividends in December or January (which are treated by you as
received in December) but does not guarantee and can give no assurances that its
distributions will be sufficient to eliminate all such taxes.
Dividends-Received Deduction for Corporations--Because the Fund's income is
derived primarily from dividends, a portion of its distributions will generally
be eligible for the intercorporate dividends-received deduction. The
dividends-received deduction will be available only with respect to dividends
designated by the Fund as eligible for such treatment. Dividends so designated
by the Fund must be attributable to dividends earned by the Fund from U.S.
corporations which are not debt-financed. A holding period requirement applies
both at the Fund level and the corporate shareholder level. Under the 1997 Act,
the amount that the Fund may designate as eligible for the dividends-received
deduction will be reduced or eliminated if the shares on which the dividends
earned by the Fund are debt-financed or held by the Fund for less than a 46-day
period during a 90-day period beginning 45 days before the ex-dividend date and
ending 45 days after the ex-dividend date. Similarly, if your Fund shares are
debt-financed or held by you for less than a 46-day period during a 90-day
period beginning 45 days before the ex-dividend date and ending 45 days after
the ex-dividend date, then the dividend-received deduction for fund dividends on
your shares may also be reduced or eliminated. Even if designated as dividends
eligible for the dividend received deduction, all dividends (including any
deducted portion) must be included in your alternative minimum taxable income
calculation.
MANAGER AND UNDERWRITER
Pursuant to a Management Agreement, the Fund employs at its own expense UMB
Bank, n.a. as its manager and investment counsel. Jones & Babson, Inc. serves as
principal underwriter at no charge to the Fund.
The aggregate management fee payable to UMB Bank, n.a. by Scout Capital
Preservation Fund, during the current fiscal year ending June 30, 1998, from
which UMB Bank, n.a. will pay all the Fund's expenses except those payable
directly by the Fund is .85%. The annual fee charged by UMB Bank, n.a. covers
all normal operating costs of the Fund.
8
<PAGE>
HOW SHARE PRICE IS DETERMINED
The net asset value per share of the Fund portfolio is computed once daily,
Monday through Friday, at the specific time during the day that the Board of
Directors of the Fund sets at least annually, except on days on which changes in
the value of a Fund's portfolio securities will not materially affect the net
asset value, or days during which no security is tendered for redemption and no
order to purchase or sell such security is received by the Fund, or the
following holidays:
New Year's Day January 1
Martin Luther King, Jr. Day Third Monday in January
Presidents' Holiday Third Monday in February
Good Friday Friday before Easter
Memorial Day Last Monday in May
Independence Day July 4
Labor Day First Monday in September
Thanksgiving Day Fourth Thursday in November
Christmas Day December 25
OFFICERS AND DIRECTORS
The Fund is managed by UMB Bank, n.a., subject to the supervision and control of
its Board of Directors. The following table lists the officers and directors of
the Fund and their ages. Unless noted otherwise, the address of each officer and
director is BMA Tower, 700 Karnes Blvd., Kansas City, Missouri 64108-3306.
Except as indicated, each has been an employee of Jones & Babson, Inc. for more
than five years.
*Larry D. Armel (55), President and Director, Jones & Babson, Inc., Scout Stock
Fund, Inc., Scout Regional Fund, Inc., Scout Bond Fund, Inc., Scout Money Market
Fund, Inc., Scout Tax- Free Money Market Fund, Inc., Scout WorldWide Fund, Inc.,
Scout Balanced Fund, Inc., Scout Kansas Tax-Exempt Bond Fund, Inc., Shadow Stock
Fund, Inc., David L. Babson Growth Fund, Inc., D. L. Babson Money Market Fund,
Inc., D.L. Babson Tax-Free Income Fund, Inc., Babson Value Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund II, Inc., Babson-Stewart Ivory
International Fund, Inc., Buffalo Balanced Fund, Inc., Buffalo Equity Fund,
Inc., Buffalo High Yield Fund, Inc., Buffalo USA Global Fund, Inc., Buffalo
Small Cap Fund, Investors Mark Series Fund, Inc. Director, AFBA Five Star Fund,
Inc.; Trustee and President, D. L. Babson Bond Trust.
William E. Hoffman, D.D.S. (59), Director, Scout Stock Fund, Inc., Scout
Regional Fund, Inc., Scout Bond Fund, Inc., Scout Money Market Fund, Inc., Scout
Tax-Free Money Market Fund, Inc., Scout WorldWide Fund, Inc., Scout Balanced
Fund, Inc., Scout Kansas Tax-Exempt Bond Fund, Inc.; Orthodontist, 3700 West
83rd Street, Suite 206, Prairie Village, Kansas 66208.
Eric T. Jager (54), Director, Scout Stock Fund, Inc., Scout Regional Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout WorldWide Fund, Inc., Scout Balanced Fund, Inc., Scout
Kansas Tax-Exempt Bond Fund, Inc.,
9
<PAGE>
President, Windcrest Investment Management, Inc.; Director, Bartlett Futures,
Inc., Nygaard Corporation, 4800 Main Street, Suite 600, Kansas City, Missouri
64112.
Stephen F. Rose (50), Director, Scout Stock Fund, Inc., Scout Regional Fund,
Inc., Scout Bond Fund, Inc., Scout Money Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout WorldWide Fund, Inc., Scout Balanced Fund, Inc., Scout
Kansas Tax-Exempt Bond Fund, Inc.; President, Sun Publications, Inc., 7373 W.
107th Street, Overland Park, Kansas 66212.
Stuart Wien (74), Director, Scout Stock Fund, Inc., Scout Regional Fund, Inc.,
Scout Bond Fund, Inc., Scout Money Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout WorldWide Fund, Inc., Scout Balanced Fund, Inc., Scout
Kansas Tax-Exempt Bond Fund, Inc.; Retired, 4589 West 124th Place, Leawood,
Kansas 66209, formerly Chairman of the Board, Milgram Food Stores, Inc.
* Directors who are interested persons as that term is defined in the Investment
Company Act of 1940, as amended.
P. Bradley Adams (37), Vice President and Treasurer, Jones & Babson, Inc., Scout
Stock Fund, Inc., Scout Bond Fund, Inc., Scout Money Market Fund, Inc., Scout
Tax-Free Money Market Fund, Inc., Scout Regional Fund, Inc., Scout WorldWide
Fund, Inc., Scout Balanced Fund, Inc., Scout Kansas Tax-Exempt Bond Fund, Inc.,
David L. Babson Growth Fund, Inc., D. L. Babson Money Market Fund, Inc., D. L.
Babson Tax-Free Income Fund, Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Babson Value Fund, Inc., Shadow Stock Fund, Inc.,
Babson-Stewart Ivory International Fund, Inc., D.L. Babson Bond Trust, Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc., Buffalo Small Cap Fund; Vice President and Chief
Financial Officer, AFBA Five Star Fund, Inc.; Principal Financial Officer,
Investors Mark Series Fund, Inc.
Michael A. Brummel (40), Vice President, Assistant Secretary and Assistant
Treasurer, Jones & Babson, Inc., Scout Stock Fund, Inc., Scout Bond Fund, Inc.,
Scout Money Market Fund, Inc., Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund, Inc., Scout Balanced Fund, Inc.,
Scout Kansas Tax-Exempt Bond Fund, Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Money Market Fund, Inc., D.L. Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund II, Inc., Babson Value Fund, Inc.,
Shadow Stock Fund, Inc., Babson-Stewart Ivory International Fund, Inc., D.L.
Babson Bond Trust, Buffalo Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc., Buffalo USA Global Fund, Inc., Buffalo Small Cap
Fund, Inc.
Martin A. Cramer (48), Vice President and Secretary, Jones & Babson, Inc., Scout
Stock Fund, Inc., Scout Bond Fund, Inc., Scout Money Market Fund, Inc., Scout
Tax-Free Money Market Fund, Inc., Scout Regional Fund, Inc., Scout WorldWide
Fund, Inc., Scout Balanced Fund, Inc., Scout Kansas Tax-Exempt Bond Fund, Inc.,
David L. Babson Growth Fund, Inc., D.L. Babson Money Market Fund, Inc., D.L.
Babson Tax-Free Income Fund, Inc., Babson Enterprise Fund, Inc., Babson
Enterprise Fund II, Inc., Babson Value Fund, Inc., Shadow Stock Fund, Inc.,
10
<PAGE>
Babson-Stewart Ivory International Fund, Inc., D.L. Babson Bond Trust, Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc., Buffalo Small Cap Fund, Inc.; Secretary and
Assistant Vice President, AFBA Five Star Fund, Inc.; Secretary, Investors Mark
Series Fund, Inc.
John G. Dyer (52), Vice President and Legal Counsel, Scout Stock Fund, Inc.,
Scout Regional Fund, Inc., Scout Bond Fund, Inc., Scout Money Market Fund, Inc.,
Scout Tax-Free Money Market Fund, Inc., Scout WorldWide Fund, Inc., Scout
Balanced Fund, Inc., Scout Kansas Tax- Exempt Bond Fund, Inc., Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo High Yield Fund, Inc., Buffalo
USA Global Fund, Inc., Buffalo Small Cap Fund, Inc.
Constance E. Martin (36), Vice President. Assistant Vice President, Jones &
Babson, Inc.; Vice President, Scout Stock Fund, Inc., Scout Bond Fund, Inc.,
Scout Money Market Fund, Inc., Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund, Inc., Scout Balanced Fund, Inc.,
Scout Kansas Tax-Exempt Bond Fund, Inc., David L. Babson Growth Fund, Inc., D.L.
Babson Money Market Fund, Inc., D.L. Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund II, Inc., Babson Value Fund, Inc.,
Babson-Stewart Ivory International Fund, Inc., D.L. Babson Bond Trust, Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc., Buffalo Small Cap Fund, Inc.
Renumeration of Officers and Directors
None of the officers or directors will be remunerated by the Fund for their
normal duties and services. Their compensation and expenses arising out of
normal operations will be paid by UMB Bank, n.a. under the provisions of the
Management Agreement.
<TABLE>
<CAPTION>
COMPENSATION TABLE
Aggregate Pension or Retirement Estimated Total Compensation
Compensation Benefits Accrued As Annual Benefits From All Scout Funds
Name of Director For Fund Service Part of Fund Expenses Upon Retirement Paid to Directors**
- ---------------------- ------------------- ------------------------ -------------------- -------------------------
<S> <C> <C> <C> <C>
Larry D. Armel* -- -- -- --
William E. Hoffman $250 -- -- $7,125
Eric T. Jager $250 -- -- $7,125
Stephen F. Rose $250 -- -- $7,125
Stuart Wien $250 -- -- $7,125
</TABLE>
* As an "interested director," Mr. Armel receives no compensation for his
services as director.
** The amounts reported in this column reflect the total compensation expected
to be paid to each director for his services as a director of nine Scout
Funds during the fiscal year ending June 30, 1998, and such amounts include
an overall retainer of $3,000 per year for service as a director for the
Scout Fund complex. Directors' fees are paid by the Funds' manager and not
by the Funds themselves.
11
<PAGE>
Messrs. Hoffman, Jager, Rose and Wien have no financial interest in, nor are
they affiliated with, either Jones & Babson, Inc. or UMB Bank, n.a.
The Audit Committee of the Board of Directors is composed of Messrs. Hoffman,
Jager, Rose and Wien.
The officers and directors of the Fund as a group own less than 1% of any of the
Funds.
The Fund will not hold annual meetings except as required by the Investment
Company Act of 1940 and other applicable laws. The Fund is a Maryland
corporation. Under Maryland law, a special meeting of stockholders of the Fund
must be held if the Fund receives the written request for a meeting from the
stockholders entitled to cast at least 25% of all the votes entitled to be cast
at the meeting. The Fund has undertaken that its directors will call a meeting
of stockholders if such a meeting is requested in writing by the holders of not
less than 10% of the outstanding shares of the Fund. To the extent required by
the undertaking, the Fund will assist shareholder communications in such
matters.
CUSTODIAN
The Fund's portfolio assets are held for safekeeping by UMB Bank, n.a. This
means UMB Bank, n.a., rather than the Fund, has possession of the Fund's cash
and securities. As directed by the Fund's officers, it delivers cash to those
who have sold securities to the Fund in return for such securities, and to those
who have purchased portfolio securities from the Fund, it delivers such
securities in return for their cash purchase price. It also collects income
directly from issuers of securities owned by the Fund and holds this for payment
to shareholders after deduction of the Fund's expenses. UMB Bank, n.a. also
functions as manager and investment adviser to the Funds (see "Manager and
Underwriter" in the Prospectus).
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Fund's financial statements are audited annually by independent certified
public accountants approved by the directors each year, and in years in which an
annual meeting is held the directors may submit their selection of independent
certified public accountants to the shareholders for ratification.
Reports to shareholders will be published at least semiannually.
Baird, Kurtz & Dobson, City Center Square, Suite 2700, 1100 Main Street, Kansas
City, Missouri 64105, is the present independent certified public accountant for
the Fund.
FIXED INCOME SECURITIES DESCRIBED AND RATINGS
In evaluating investment suitability, each investor must relate the
characteristics of a particular investment under consideration to personal
financial circumstances and goals.
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<PAGE>
Description of Bond Ratings
Standard & Poor's Corporation (S&P).
AAA - Highest Grade. These securities possess the ultimate degree of protection
as to principal and interest. Marketwise, they move with interest rates, and
hence provide the maximum safety on all counts.
AA - High Grade. Generally, these bonds differ from AAA issues only in a small
degree. Here too, prices move with the long-term money market.
A - Upper-medium Grade. They have considerable investment strength, but are not
entirely free from adverse effects of changes in economic and trade conditions.
Interest and principal are regarded as safe. They predominantly reflect money
rates in their market behavior but, to some extent, also economic conditions.
BBB - Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this category
than for bonds in the A category.
BB, B, CCC, CC - Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligations. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
Moody's Investors Service, Inc. (Moody's).
Aaa - Best Quality. These securities 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.
Aa - High Quality by All Standards. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities,
fluctuation of protective elements may be of greater amplitude, or there may be
other elements present which make the long-term risks appear somewhat greater.
A - Upper-medium Grade. Factors giving security to principal and interest are
considered adequate, but elements may be present which suggest a susceptibility
to impairment sometime in the future.
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<PAGE>
Baa - Bonds which are rated Baa are considered as 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.
Ba - Bonds which are rated Ba are judged to have predominantly 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.
B - Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of other
terms of the contract over any long period of time may be small.
Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca - Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
Description of Commercial Paper Ratings
Moody's - Moody's commercial paper rating is an opinion of the ability of an
issuer to repay punctually promissory obligations not having an original
maturity in excess of nine months. Moody's has one rating - prime. Every such
prime rating means Moody's believes that the commercial paper note will be
redeemed as agreed. Within this single rating category are the following
classifications:
Prime - 1 Highest Quality
Prime - 2 Higher Quality
Prime - 3 High Quality
The criteria used by Moody's for rating a commercial paper issuer under this
graded system include, but are not limited to the following factors:
(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;
14
<PAGE>
(6) trend of earnings over a period of ten years;
(7) financial strength of a parent company and relationships which exist with
the issuer; and
(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.
S&P - Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely repayment of debt having an original maturity of no more
than 270 days. Ratings are graded into four categories, ranging from "A" for the
highest quality obligations to "D" for the lowest. The four categories are as
follows:
"A" Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are further refined with
the designations 1, 2 and 3 to indicate the relative degree of safety.
"A-1" This designation indicates that the degree of safety regarding timely
payment is very strong.
"A-2" Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as overwhelming.
"A-3" Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher designations.
"B" Issues rated "B" are regarded as having only an adequate capacity for timely
payment. Furthermore, such capacity may be damaged by changing conditions or
short-term adversities.
"C" This rating is assigned to short-term debt obligations with a doubtful
capacity for payment.
"D" This rating indicates that the issuer is either in default or is expected to
be in default upon maturity.
15
<PAGE>
OTHER SCOUT FUNDS
The Fund is one of nine no-load funds comprising the Scout Fund Group, managed
by UMB Bank, n.a. The other funds are:
Scout Stock Fund, Inc. was organized in 1982, with the objective of long-term
growth of both capital and dividend income. Current yield is secondary to the
long-term growth objective.
Scout Regional Fund, Inc. was organized in 1986, with the objective of long-term
growth of both capital and dividend income through investment in smaller
regional companies. Current yield is secondary to the long-term growth
objective.
Scout WorldWide Fund, Inc. was organized in 1993, with the objective of
investment in a diversified portfolio of equity securities (common stocks and
securities convertible into common stocks) of established companies either
located outside the U.S. or whose primary business is carried on outside the
country. The Fund seeks to generate a favorable total return consisting of
interest, dividend and other income, if any, and appreciation in the value of
the Fund's portfolio securities by investing in equity securities which in the
opinion of the manager offer good growth potential and in many cases pay
dividends.
Scout Kansas Tax-Exempt Bond Fund, Inc. was organized in 1997, with the
objective of current income exempt from regular federal income tax and Kansas
state personal income taxes. The Fund seeks to achieve its objective by
investing at least 80% of its net assets in municipal bonds or debt instruments,
the interest on which is exempt from regular federal income tax and from state
personal income tax.
Scout Bond Fund, Inc. was organized in 1982, with the objective of providing
shareholders with maximum current income consistent with its quality and
maturity standards by investing in a diversified portfolio of fixed-income
obligations.
Scout Balanced Fund, Inc. was organized in 1995, with the objective of both
long-term capital growth and high-current income.
Scout Money Market Fund, Inc. was organized in 1982, and consists of the Federal
Portfolio and the Prime Portfolio, each of which invests in high-quality,
short-term debt instruments for the purpose of maximizing income consistent with
safety of principal and liquidity.
Scout Tax-Free Money Market Fund, Inc. was organized in 1982, with the objective
of providing investors with the highest level of investment income exempt from
Federal Income Tax consistent with its quality and maturity standards.
16
<PAGE>
FINANCIAL STATEMENTS
SCOUT CAPITAL PRESERVATION FUND, INC.
(in organization)
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 13, 1998
ASSETS
Cash $100,000
-----------
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) 100,000
-----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $100,000
===========
Capital shares, $1.00 par value
Authorized 10,000,000
===========
Outstanding 10,000
===========
NET ASSET VALUE PER SHARE $10.00
===========
STATEMENT OF NET ASSETS
JANUARY 13, 1998
CASH $100,000
===========
TOTAL NET ASSETS (Equivalent to $10.00 per share;
10,000,000 shares of $1.00 par value common
stock authorized; 10,000 shares outstanding) $100,000
===========
17
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements: (Provided in Part B of the
Registration Statement)
(b) (1) Registrant's Articles of Incorporation*
(2) Form of Registrant's By-laws*
(3) Not applicable, because there is no voting trust agreement
(4) Specimen copy of each security to be issued by the
registrant
(5) Form of Management Agreement between UMB Bank, n.a. and the
Registrant*
(6) Form of principal Underwriting Agreement between Jones &
Babson, Inc. and the Registrant*
(7) Not applicable, because there are no pension, bonus or other
agreements for the benefit of directors and officers
(8) Form of Custodian Agreement between Registrant and United
Missouri Bank of Kansas City, N.A.*
(9) Form of Transfer Agency Agreement between the Registrant,
UMB Bank, n.a. and Jones & Babson, Inc.*
(10) Opinion and consent of counsel as to the legality of the
registrant's securities being registered.*
(11) Not applicable.
(12) Not applicable.
(13) Form of letter from contributors of initial capital to the
Registrant that purchase was made for investment purposes
without any present intention of redeeming or selling.
(14) Not applicable.
(15) Not applicable.
<PAGE>
(16) Schedule for computation of performance quotations.
(19) Powers of Attorney (filed herewith)
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL OF THE
REGISTRANT.
NONE
Item 26. NUMBER OF HOLDERS OF SECURITIES.
The number of record holders of each class of securities of
the Registrant as of February 2, 1998, is as follows:
(1) (2)
Title of class Number of Record Holders
Common Stock One
$1.00 par value
Item 27. INDEMNIFICATION.
Under the terms of the Maryland General Corporation Law and
the company's By-laws, the company shall indemnify any person
who was or is a director, officer, or employee of the company
to the maximum extent permitted by the Maryland General
Corporation Law; provided however, that any such
indemnification (unless ordered by a court) shall be made by
the company only as authorized in the specific case upon a
determination that indemnification of such persons is proper
in the circumstances. Such determination shall be made
(i) by the Board of Directors by a majority vote of a quorum
which consists of the directors who are neither "interested
persons" of the company as defined in Section 2(a)(19) of the
1940 Act, nor parties to the proceedings, or
(ii) if the required quorum is not obtainable or if a quorum
of such directors so directs, by independent legal counsel in
a written opinion. No indemnification will be provided by the
company to any director or officer of the company for any
liability to the company or shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of duty.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
UMB Bank, n.a. is a commercial bank.
2
<PAGE>
Item 29. PRINCIPAL UNDERWRITERS.
(a) Jones & Babson, Inc., the only principal underwriter of
the Registrant, also acts as principal underwriter for
the David L. Babson Growth Fund, Inc., D.L. Babson
Money Market Fund, Inc., D.L. Babson Tax-Free Income
Fund, Inc., D.L. Babson Bond Trust, Babson Value Fund,
Inc., Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., Scout Stock Fund, Inc., Scout
Bond Fund, Inc., Scout Money Market Fund, Inc. Scout
Tax-Free Money Market Fund, Inc., Scout Regional Fund,
Inc., Scout WorldWide Fund, Inc., Scout Balanced Funds,
Inc., Scout Kansas Tax-Exempt Bond Fund, Inc., Buffalo
Balanced Fund, Inc. Buffalo Equity Fund, Inc. Buffalo
USA Global Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo Small Cap Fund, Inc. and AFBA Five Star Fund,
Inc.
(b) Herewith is the information required by the following
table with respect to each director, officer or partner
of the only underwriter named in answer to Item 21 of
Part B:
Name and Principal Position and Offices Positions and Offices
Business Address with Underwriter with Registrant
Stephen S. Soden Chairman and Director Director
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108-3306
Larry D. Armel President and Director President and
BMA Tower Director
700 Karnes Boulevard
Kansas City, MO 64108-3306
Giorgio Balzer Director None
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108-3306
Robert T. Rakich Director None
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108-3306
Edward S. Ritter Director None
BMA Tower
700 Kansas Boulevard
Kansas City, MO 64108-3306
3
<PAGE>
Robert N. Sawyer Director None
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108-3306
Vernon W. Voorhees Director None
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108-3306
P. Bradley Adams Vice President Vice President
BMA Tower and Treasurer and Chief Financial
700 Karnes Boulevard Officer
Kansas City, MO 64108-3306
Michael A. Brummel Vice President Vice President
BMA Tower
700 Karnes Boulevard
Kansas City, MO 64108-3306
Martin A. Cramer Vice President Secretary
Three Crown Center and Secretary
2440 Pershing Road, G-15
Kansas City, MO 64108-3306
(c) The principal underwriter does not receive any
remuneration or compensation for the duties or services
rendered to the Registrant pursuant to the principal
underwriting Agreement.
Item 30. LOCATION OF ACCOUNTS AND RECORDS.
Each account, book or other document required to be maintained
by Section 31(a) of the 1940 Act and the Rules (17 CFR
270.3la-1 to 3la-3) promulgated thereunder is in the physical
possession of Jones & Babson, Inc., at BMA Tower, 700 Karnes
Boulevard, Kansas City, Missouri 64108-3306.
Item 31. MANAGEMENT SERVICES.
All management services are covered in the management
agreement between the Registrant and UMB Bank, n.a., which are
discussed in Parts A and B.
4
<PAGE>
Item 32. UNDERTAKINGS.
Registrant undertakes to file a post-effective amendment using
uncertified financial statements within four to six months
from the commencement of investment operations after the
effective date of Registrant's 1933 Act Registration
Statement.
5
<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 amendment to
its registration statement to be signed on its behalf by the undersigned,
thereunto authorized, in the City of Kansas City, and State of Missouri on the
9th day of February, 1998.
SCOUT CAPITAL PRESERVATION FUND, INC.
(Registrant)
By/s/ Larry D. Armel
(Larry D. Armel, President)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Larry D. Armel President, February 9, 1998
Larry D. Armel Principal Executive
Officer, and Director
/s/William E. Hoffman Director February 9, 1998
William E. Hoffman*
/s/Eric T. Jager Director February 9, 1998
Eric T. Jager*
/s/Stephen F. Rose Director February 9, 1998
Stephen F. Rose*
/s/Stuart Wien Director February 9, 1998
Stuart Wien*
/s/P. Bradley Adams Treasurer and February 9, 1998
P. Bradley Adams Principal Financial
and Accounting Officer
</TABLE>
* By Larry D. Armel, pursuant to Power of Attorney filed herewith.
6
<PAGE>
EXHIBIT INDEX
Item 24 (b).
Exhibit Page No.
(11) Consent of Auditors
(19) Powers of Attorney
7
Exhibit 11
CONSENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and
Board of Directors
Scout Capital Preservation Fund, Inc.
(in Organization)
Kansas City, Missouri
We hereby consent to the use in this Registration Statement under the
Securities Act of 1933 and the Investment Company Act of 1940, both on form
N-1A, of our report dated January 13, 1998, accompanying and pertaining to the
financial statements of Scout Capital Preservation Fund, Inc. (in Organization),
a series of the Scout fund group, as of January 13, 1998, which is included in
such Registration Statement.
/s/ BAIRD, KURTZ & DOBSON
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
February 3, 1998
Exhibit 19
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Scout Capital Preservation Fund, Inc.,
a Maryland Corporation which intends to do business as an open-end diversified
investment company (mutual fund), and
WHEREAS the Scout Capital Preservation Fund, Inc., intends to register its
shares with the Securities and Exchange Commission under the Securities Act of
1933 and the Investment Company Act of 1940 and with the Securities Departments
of the various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons hereinafter set out
as his attorney each with the power to act severally in the name of the
undersigned and to execute on his behalf all forms and documents required by the
Securities and Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the initial
registration of the securities of the Scout Capital Preservation Fund, Inc. and
in the maintenance of such registrations.
Larry D. Armel
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of November, 1997.
/s/William E. Hoffman
William E. Hoffman
Sworn to before me this 19th day of November, 1997.
/s/Sandra A. Vinzant
Sandra A. Vinzant, Notary Public
County of Jackson, State of Missouri
My commission expires April 20, 2001.
SANDRA A. VINZANT
Notary Public - Notary Seal
STATE OF MISSOURI
Jackson County
My Commission Expires: April 20, 2001
<PAGE>
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Scout Capital Preservation Fund, Inc.,
a Maryland Corporation which intends to do business as an open-end diversified
investment company (mutual fund), and
WHEREAS the Scout Capital Preservation Fund, Inc., intends to register its
shares with the Securities and Exchange Commission under the Securities Act of
1933 and the Investment Company Act of 1940 and with the Securities Departments
of the various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons hereinafter set out
as his attorney each with the power to act severally in the name of the
undersigned and to execute on his behalf all forms and documents required by the
Securities and Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the initial
registration of the securities of the Scout Capital Preservation Fund, Inc. and
in the maintenance of such registrations.
Larry D. Armel
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of November, 1997.
/s/Eric T. Jager
Eric T. Jager
Sworn to before me this 19th day of November, 1997.
/s/Sandra A. Vinzant
Sandra A. Vinzant, Notary Public
County of Jackson, State of Missouri
My commission expires April 20, 2001.
SANDRA A. VINZANT
Notary Public - Notary Seal
STATE OF MISSOURI
Jackson County
My Commission Expires: April 20, 2001
<PAGE>
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Scout Capital Preservation Fund, Inc.,
a Maryland Corporation which intends to do business as an open-end diversified
investment company (mutual fund), and
WHEREAS the Scout Capital Preservation Fund, Inc., intends to register its
shares with the Securities and Exchange Commission under the Securities Act of
1933 and the Investment Company Act of 1940 and with the Securities Departments
of the various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons hereinafter set out
as his attorney each with the power to act severally in the name of the
undersigned and to execute on his behalf all forms and documents required by the
Securities and Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the initial
registration of the securities of the Scout Capital Preservation Fund, Inc. and
in the maintenance of such registrations.
Larry D. Armel
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of November, 1997.
/s/Stephen F. Rose
Stephen F. Rose
Sworn to before me this 19th day of November, 1997.
/s/Sandra A. Vinzant
Sandra A. Vinzant, Notary Public
County of Jackson, State of Missouri
My commission expires April 20, 2001.
SANDRA A. VINZANT
Notary Public - Notary Seal
STATE OF MISSOURI
Jackson County
My Commission Expires: April 20, 2001
<PAGE>
POWER OF ATTORNEY
WHEREAS the undersigned is a Director of Scout Capital Preservation Fund, Inc.,
a Maryland Corporation which intends to do business as an open-end diversified
investment company (mutual fund), and
WHEREAS the Scout Capital Preservation Fund, Inc., intends to register its
shares with the Securities and Exchange Commission under the Securities Act of
1933 and the Investment Company Act of 1940 and with the Securities Departments
of the various states and the District of Columbia. Now, therefore,
KNOW ALL MEN BY THESE PRESENTS:
THAT the undersigned does hereby appoint each of the persons hereinafter set out
as his attorney each with the power to act severally in the name of the
undersigned and to execute on his behalf all forms and documents required by the
Securities and Exchange Commission, or any state of the United States of
America, or the District of Columbia, in connection with the initial
registration of the securities of the Scout Capital Preservation Fund, Inc. and
in the maintenance of such registrations.
Larry D. Armel
Martin A. Cramer
IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of November, 1997.
/s/Stuart Wien
Stuart Wien
Sworn to before me this 19th day of November, 1997.
/s/Sandra A. Vinzant
Sandra A. Vinzant, Notary Public
County of Jackson, State of Missouri
My commission expires April 20, 2001.
SANDRA A. VINZANT
Notary Public - Notary Seal
STATE OF MISSOURI
Jackson County
My Commission Expires: April 20, 2001
