AMERICAN EAGLE FUNDS INC
DEFS14A, 2000-08-25
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  SCHEDULE 14A

           PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
                      EXCHANGE ACT OF 1934 (AMENDMENT NO. )



Filed by the Registrant |X|       Filed by a Party other than the Registrant |_|

Check the appropriate box:
|_|      Preliminary Proxy Statement
|_|      CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
         (AS PERMITTED BY RULE 14A-6(E)(2))
|X|      Definitive Proxy Statement
|_|      Definitive Additional Materials
|_|      Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12


                           AMERICAN EAGLE FUNDS, INC.
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                (Name of Registrant as Specified In Its Charter)


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    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

      1)   Title of each class of securities to which transaction applies:

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      2)   Aggregate number of securities to which transaction applies:

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<PAGE>

      3)   Per unit price or other underlying value of transaction computed
           pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
           filing fee is calculated and state how it was determined):

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      4)   Proposed maximum aggregate value of transaction:


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      5)   Total fee paid:

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|_| Fee paid previously with preliminary materials.
|_|   Check box if any part of the fee is offset as provided by Exchange Act
      Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
      paid previously. Identify the previous filing by registration statement
      number, or the Form or Schedule and the date of its filing.

      1)   Amount Previously Paid:

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      2)   Form, Schedule or Registration Statement No.:

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      3)   Filing Party:

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      4)   Date Filed:

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<PAGE>


                           AMERICAN EAGLE FUNDS, INC.
                       1550 UTICA AVENUE SOUTH, SUITE 950
                          MINNEAPOLIS, MINNESOTA 55416

Dear Shareholder:


         You are cordially invited to attend a Special Joint Meeting of
Shareholders (the "Meeting") of American Eagle Capital Appreciation Fund and
American Eagle Twenty Fund (the "Funds") in order to vote on several important
proposals. Each Fund is a series of American Eagle Funds, Inc. The Meeting will
be held at the offices of Faegre & Benson LLP (the Funds' legal counsel), 90
South Seventh Street, Wells Fargo Center, 23rd Floor, Minneapolis, Minnesota
55402 on Wednesday, September 20, 2000, at 2:00 p.m. (Central Time).


         Enclosed you will find a detailed Proxy Statement and a proxy card for
you to register your vote and mail back to us. You will also find a summary of
the proposals in a "Question and Answer" format that will provide answers to
many of your anticipated questions. After you have read the enclosed materials,
please fill out your proxy card, sign it and send it back to us. While we would
welcome your attendance at the Meeting, whether or not you expect to attend the
Meeting, please sign and return the enclosed proxy card in the enclosed
postage-paid envelope.

YOUR PROMPT VOTE MAKES A BIG DIFFERENCE

         It is very important that you vote as soon as possible since many of
these proposals require that a majority of the shareholders participate in the
voting process. If the required number of shareholders DO NOT participate,
additional mailings and shareholder solicitation will need to take place at the
expense of the Fund. Your prompt vote will help save time and money.

THE BOARD OF DIRECTORS RECOMMENDS A "YES" VOTE FOR EACH PROPOSAL

         All of the proposals have been thoroughly reviewed by the Funds' Board
of Directors, whose role is to protect your interest as a shareholder. The
Funds' Board of Directors believes that the proposals are in the best interest
of the applicable Fund and its shareholders and unanimously recommends that you
vote FOR each proposal.

         Thank you for taking the time to cast this very important vote.

                                   Sincerely,




                                   Marcus E. Jundt
                                   PRESIDENT




<PAGE>


HERE IS A BRIEF OVERVIEW OF THE PROPOSALS THAT ARE BEING RECOMMENDED FOR YOUR
FUND. PLEASE READ THE FULL TEXT OF THE PROXY STATEMENT BEFORE DECIDING HOW TO
VOTE ON THESE PROPOSALS.

WHAT PROPOSALS AM I BEING ASKED TO VOTE ON?

Shareholders are being asked to vote on proposals to:

o        Set the number of directors at seven and to elect each member of the
         Board of Directors.

o        Approve the modification of certain investment restrictions of the
         Funds.

o        Approve a new Investment Advisory Agreement between each Fund and Jundt
         Associates, Inc.

HOW DOES THE BOARD RECOMMEND THAT I VOTE?

After careful consideration, the Board recommends that you vote FOR each
proposal.

WHAT DO BOARD MEMBERS DO?

Board members represent the interests of shareholders and oversee the management
of the Funds.

WHY IS THE BOARD RECOMMENDING CHANGES TO SOME OF THE FUNDS' INVESTMENT
RESTRICTIONS?

Each Fund has a number of investment restrictions that are "fundamental," which
means that they may be changed only with the approval of shareholders. Because
some of the Funds' fundamental investment restrictions, in the opinion of Jundt
Associates, are unnecessarily restrictive in light of modern investment
practices, the Board is recommending that certain of the Funds' investment
restrictions be modified.

WHY IS A SHAREHOLDER VOTE REQUIRED TO APPROVE NEW INVESTMENT ADVISORY AGREEMENTS
WITH JUNDT ASSOCIATES, INC?

The Investment Company Act of 1940 generally requires that shareholders approve
a new investment advisory agreement whenever there is a change in control of the
investment adviser. Marcus E. Jundt, the president of each Fund, has announced
that he will acquire a controlling interest in Jundt Associates, Inc, the
investment adviser to each Fund. The proposed acquisition will result in a
change in control of Jundt Associates, Inc. which, therefore, requires a
shareholder vote on a new investment advisory agreement for each Fund. The Board
is recommending that shareholders of each Fund approve the new Investment
Advisory Agreement with Jundt Associates, Inc.

HOW WILL THE NEW INVESTMENT ADVISORY AGREEMENT WITH JUNDT ASSOCIATES, INC.
AFFECT THE MANAGEMENT OF MY FUND INVESTMENTS?

Under the terms of the proposed Investment Advisory Agreements, the investment
management fees paid by your Fund will remain the same. In addition, the
portfolio managers for each Fund will remain the same.


<PAGE>


Information about Marcus E. Jundt and the new Investment Advisory Agreements can
be found in the proxy statement.


WHO SHOULD I CALL FOR MORE INFORMATION REGARDING THE PROXY STATEMENT OR THE
PROXY CARD?

For information regarding the proxy, call D.F. King, our proxy solicitor, at
1-800-714-3312.




<PAGE>



                           AMERICAN EAGLE FUNDS, INC.
                       1550 UTICA AVENUE SOUTH, SUITE 950
                          MINNEAPOLIS, MINNESOTA 55416


                 NOTICE OF SPECIAL JOINT MEETING OF SHAREHOLDERS
                   TO BE HELD ON WEDNESDAY, SEPTEMBER 20, 2000

         American Eagle Capital Appreciation Fund and American Eagle Twenty Fund
(the "Funds"), each a series of American Eagle Funds, Inc., will hold a Special
Joint Meeting of Shareholders (the "Meeting") at the offices of offices of
Faegre & Benson LLP (the Funds' legal counsel), 90 South Seventh Street, Wells
Fargo Center, 23rd Floor, Minneapolis, Minnesota 55402 on Wednesday, September
20, 2000, at 2:00 p.m. (Central Time) for the following purposes:


         1.       To set the number of directors at seven and to elect each
                  member of the Board of Directors.

         2.       To approve the modification of certain investment restrictions
                  of the Funds.

         3.       To approve a new Investment Advisory Agreement between each
                  Fund and Jundt Associates, Inc.

         4.       To transact any other business properly brought before the
                  Meeting.

         The Funds' Board of Directors unanimously recommends approval of each
item listed on this Notice of Special Joint Meeting of Shareholders.

         Only shareholders of record as of the close of business on July 31,
2000 may vote at the Meeting or any adjournment(s) of the Meeting.

                               James E. Nicholson
                               SECRETARY


Dated: August 23, 2000



<PAGE>


                           AMERICAN EAGLE FUNDS, INC.
                       1550 UTICA AVENUE SOUTH, SUITE 950
                          MINNEAPOLIS, MINNESOTA 55416


                                 PROXY STATEMENT


                      SPECIAL JOINT MEETING OF SHAREHOLDERS
                          WEDNESDAY, SEPTEMBER 20, 2000

         The Board of Directors of American Eagle Funds, Inc. (the "Company"),
is soliciting the enclosed proxy in connection with a special joint meeting of
shareholders (the "Meeting to be held at the offices of offices of Faegre &
Benson LLP (the Funds' legal counsel), 90 South Seventh Street, Wells Fargo
Center, 23rd Floor, Minneapolis, Minnesota 55402 on Wednesday, September 20,
2000, at 2:00 p.m. (Central Time), and any adjournment of the Meeting.


         The Company offers its shares in two different series, American Eagle
Capital Appreciation Fund and American Eagle Twenty Fund (each a "Fund"). Each
Fund's investment advisor is Jundt Associates, Inc. ("Jundt Associates"). U.S.
Growth Investments, Inc. ("U.S. Growth Investments") is the Funds' principal
underwriter. Both Jundt Associates and U.S. Growth Investments are located at
1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota 55416.


         The Company will pay all costs of solicitation, including the cost of
preparing and mailing the Notice of Joint Special Shareholders' Meeting and this
Proxy Statement. Representatives of Jundt Associates, without cost to the
Company, may solicit proxies by means of mail, telephone, or personal calls.
Jundt Associates has arranged for an outside firm, D. F. King, to solicit
shareholder votes by telephone on behalf of the Companies. This procedure is
expected to cost approximately $3,000, plus transaction-based costs and
expenses, which will be allocated among the Funds based on their net assets.

         In order for the Meeting to go forward, there must be a quorum. This
means that at least 10% of the Company's shares must be represented at the
meeting--either in person or by proxy. For purposes of determining the presence
of a quorum and counting votes on the matters presented, shares represented by
abstentions and "broker non-votes" will be counted as present, but not as votes
cast, at the Meeting. Therefore, broker non-votes and abstentions will be
counted as votes against each proposal. (Broker non-votes are shares for which
(a) the underlying owner has not voted and (b) the broker holding the shares
does not have discretionary authority to vote on the particular matter.) Under
the Company's Articles of Incorporation, the election of directors will be
determined based on a percentage of votes


                                       1

<PAGE>



cast at the Special Joint Meeting of Shareholders. If a quorum is not obtained
or if sufficient votes to approve any of the proposals are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. In determining whether to adjourn the
Meeting, the following factors may be considered: the nature of the proposal;
the percentage of votes actually cast; the percentage of negative votes actually
cast; the nature of any further solicitation; and the information to be provided
to shareholders with respect to the reasons for the solicitation. Any
adjournment will require a vote in favor of the adjournment by the holders of a
majority of the shares present in person or by proxy at the Meeting (or any
adjournment of the Meeting).


         You may revoke your proxy at any time up until voting results are
announced at the Meeting. You can do this by writing to the Fund, or by voting
in person at the Meeting and notifying the election judge that you are revoking
your proxy. In addition, you can revoke a prior proxy simply by voting
again--using your original proxy card. If you return an executed proxy card
without instructions, your shares will be voted "for" each proposal.

         Only shareholders of record on July 31, 2000 may vote at the Meeting or
any adjournment of the Meeting. On that date the Funds had the following numbers
of shares of common stock issued and outstanding:


FUND                                                                     SHARES
----                                                                     ------
American Eagle Funds, Inc.
     American Eagle Capital Appreciation Fund..........................  716,189
     American Eagle Twenty Fund........................................  593,016


         Each shareholder is entitled to one vote for each share owned on the
record date. None of the matters to be presented at the Meeting will entitle any
shareholder to cumulative voting or appraisal rights.

         At this point, we know of no other business to be brought before the
Meeting. However, if any other matters do come up, the persons named as proxies
will vote upon these matters according to their best judgment.

         THE FUNDS' MOST RECENT ANNUAL AND SEMIANNUAL REPORTS ARE AVAILABLE AT
NO COST. TO REQUEST A REPORT, PLEASE CONTACT THE FUND AT 615 EAST MICHIGAN
STREET, 3RD FLOOR, MILWAUKEE, WISCONSIN 53201-5207 OR CALL 1-800-370-0612.


         Please be sure to read the entire proxy statement before casting your
vote. If you need help voting your proxy, you may call D.F. King at
1-800-714-3312.

         This proxy statement and proxy cards were first mailed to shareholders
on or about August 23, 2000.



                                      -2-
<PAGE>



                              SUMMARY OF PROPOSALS

         The Board of Directors of the Funds is asking for your vote on the
following proposals. Each proposal is described in detail below.

PROPOSAL
--------
1.       To set the number of directors at seven and to elect each member of the
         Board of Directors

2.       To approve the modification of the following investment restrictions:


         A.       Modify investment restrictions regarding borrowing

         A.       Modify investment restrictions regarding the issuance of
                  senior securities


         B.       Modify investment restrictions regarding concentration in a
                  particular industry

         C.       Modify investment restrictions regarding investments in real
                  estate

         D.       Modify investment restrictions regarding investments in
                  commodities

         E.       Modify investment restrictions regarding lending

3.       To approve a new Investment Advisory Agreement between each Fund and
         Jundt Associates, Inc.

4.       To transact such other business as may properly come before the Meeting





                                      -3-
<PAGE>


                                  PROPOSAL ONE
                              ELECTION OF DIRECTORS

ELECTION OF DIRECTORS

         At the Meeting you will be asked to elect the nominees listed below to
the Company's Board of Directors, and to thereby set the number of Directors at
seven (based on the authority of the Board of Directors to increase or decrease
the number of directors).

         Each director will serve until the next meeting of the shareholders or
until his successor is elected. Information regarding each nominee's principal
occupation and business experience is set forth below.


         The Company's Board of Directors has an audit committee and nominating
committee. The members of the audit committee are John E. Clute, Demetre M.
Nicoloff and Darrell R. Wells, and the members of the nominating committee are
John E. Clute, Floyd Hall, Demetre M. Nicoloff, Darrell R. Wells and Clark W.
Jernigan. The Company's Board of Directors does not have a compensation
committee.

         During the fiscal year ended December 31, 1999, there were four
meetings of the Board of Directors, two meetings of the audit committee, and one
meeting of the nominating committee. During fiscal year 1999, each director
attended at least 75% of the Board of Directors meetings and meetings of
committees on which he or she served.


         The audit committee's purpose is to oversee the Funds' accounting and
financial reporting policies and practices and matters relating to internal
control, to oversee the quality and objectivity of the Funds' financial
statements and the independent audits of those statements and to be a liaison
between the independent auditors of the Fund and the full Board of Directors.
The nominating committee will act to present names for consideration for
election of Board members in the event of a vacancy or expansion of the Board of
Directors. This committee will consider nominees recommended to it for
consideration by shareholders of the Company.




                                       4
<PAGE>



                                            PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS                        PAST 5 YEARS AND OTHER AFFILIATIONS
--------------------------              ----------------------------------------

James R. Jundt*                         Chairman of the Board, Chief Executive
Age: 58                                 Officer, Secretary and portfolio manager
1550 Utica Avenue South                 of Jundt Associates, Inc. since its
Suite 950                               inception in 1982. Chairman of the
Minneapolis, MN 55416                   Board and a portfolio manager of The
                                        Jundt Growth Fund, Inc. since 1991,
                                        Jundt Funds, Inc. since 1995 and, since
                                        1999, American Eagle Funds, Inc.
                                        President of The Jundt Growth Fund, Inc.
                                        from 1991 to 1999 and Jundt Funds,
                                        Inc. from 1995 to 1999. Chairman of the
                                        Board of the Distributor since 1995.
                                        Also a trustee of Gonzaga University.


John E. Clute                           Dean and Professor of Law, Gonzaga
Age: 65                                 University School of Law, since 1991;
1221 West Riverside                     previously Senior Vice President Human
 Avenue                                 Resources and General Counsel, Boise
Spokane, WA 99201                       Cascade Corporation (forest products).
                                        Director of The Jundt Growth Fund, Inc.
                                        since 1991, Jundt Funds, Inc. since
                                        1995 and, since 1999, American Eagle
                                        Funds, Inc. Also a director of Hecla
                                        Mining Company (mining) and two private
                                        companies.

Floyd Hall                              Chairman, President and Chief Officer
Age: 61                                 Executive of K-Mart Corporation from
190 Upper Mtn Ave.                      1995 to 2000. Chairman from 1989 to
Montclair, NJ 07042                     1998 and Chief Executive Officer from
                                        1989 to 1995 of The Museum Company and
                                        Alva Replicas. Chairman and Chief
                                        Executive Officer from 1984 to 1989 of
                                        The Grand Union Company. Chairman and
                                        Chief Executive Officer from 1981 to
                                        1984 of Target Stores. President and
                                        Chief Executive Officer from 1974 to
                                        1981 of B. Dalton Bookseller. Director
                                        of The Jundt Growth Fund, Inc. since
                                        1991, Jundt Funds, Inc. since 1995 and,
                                        since 1999, American Eagle Funds, Inc.

Demetre M. Nicoloff                     Cardiac and thoracic surgeon, Cardiac
Age: 66                                 Surgical Associates, P.A., Minneapolis,
1492 Hunter Drive                       Minnesota. Director of The Jundt Growth
Wayzata, MN 55391                       Fund, Inc. since 1991, Jundt Funds,
                                        Inc. since 1995 American Eagle Funds,
                                        Inc. Also a director of Optical Sensors
                                        Incorporated (patient monitoring
                                        equipment); Micromedics, Inc.
                                        (instrument trays, ENT specialty
                                        products and fibrin glue applicators);
                                        Applied Biometrics, Inc. (cardiac
                                        output measuring devices); and
                                        Urometrics, Inc. (ultrasound imaging
                                        equipment).

Darrell R. Wells                        Managing Director, Security Management
Age: 57                                 Company (asset management firm) in
Suite 310                               Louisville, Kentucky. Director of The
4350 Brownsboro Road,                   Jundt Growth Fund, Inc. since 1991,
Louisville, KY 40207                    Jundt Funds, Inc. since 1995 and, since
                                        1999, American Eagle Funds, Inc. Also a
                                        director of Churchill Downs Inc. (race
                                        track operator) and Citizens Financial
                                        Inc. (insurance holding company), as
                                        well as several private companies.




                                       5
<PAGE>


                                            PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS                        PAST 5 YEARS AND OTHER AFFILIATIONS
----------------                        -----------------------------------

Clark W. Jernigan                       Engineering Director, Cirrus Logic,
Age: 39                                 Inc., Communications Products Division,
1201 Verdant Way                        Austin, Texas since 1997; Research
Austin, TX 78746                        Associate Analyst, Alex. Brown & Sons
                                        Incorporated, New York, New York from
                                        1996 to 1997; Product Development
                                        Engineering Manager, Advanced Micro
                                        Devices, Inc., Embedded Processor
                                        Division, Austin, Texas from June 1991
                                        to 1996; since 1999, Director of The
                                        Jundt Growth Fund, Inc., Jundt Funds,
                                        Inc. and American Eagle Funds, Inc.

Marcus E. Jundt                         Vice Chairman of Jundt Associates, Inc.
Age: 35                                 since 1992. Research Analyst, Victoria
Suite 950                               Investors, New York, New York from 1988
1550 Utica Avenue South                 to 1992. Employed by Cargill Investor
Minneapolis, MN 55416                   Services, Inc. from 1987 to 1988. Since
                                        1999, President of Jundt Funds, Inc.,
                                        The Jundt Growth Fund, Inc. and
                                        American Eagle Funds, Inc. Portfolio
                                        Manager of Jundt Funds, Inc. since 1995
                                        and The Jundt Growth Fund since 1992.
                                        President of U.S. Growth Investments,
                                        Inc. since 1997. Also a director of a
                                        private company.

------------------
* James R. Jundt, the Chairman of the Board of the Company, and Marcus E. Jundt,
the President of the Company, are "interested persons" of the Funds, as defined
in the Investment Company Act. James R. Jundt is also a "controlling person," as
defined in the Investment Company Act, of the Jundt Associates, the investment
adviser to each Fund, and U.S. Growth Investments, the distributor of each of
the Funds. James R. Jundt beneficially owns 95% of the stock of the Jundt
Associates and owns 100% of the stock of the U.S. Growth Investments

         Each of the directors of American Eagle Funds, Inc. is also a director
of The Jundt Growth Fund, Inc. and Jundt Funds, Inc. American Eagle Funds, Inc.,
Jundt Growth Fund, Inc., and Jundt Funds, Inc. have agreed to pay its pro rata
share (based on the relative net assets of each fund company) of the fees
payable to each director who is not an "interested person" of any fund company
managed by the Investment Adviser. In the aggregate, American Eagle Funds, Inc.,
the Jundt Growth Fund, Inc. and Jundt Funds, Inc. have agreed to pay each such
director a fee of $15,000 per year plus $1,500 for each meeting attended and to
reimburse each such director for the expenses of attendance at such meetings. No
compensation is paid to officers or directors who are "interested persons" of
American Eagle Funds, Inc., Jundt Growth Fund, Inc. or Jundt Funds, Inc.




                                       6
<PAGE>


         Director fees and expenses aggregated $81,129 for the fiscal year ended
December 31, 1999. The following table sets forth for such period the aggregate
compensation (excluding expense reimbursements) paid by the Fund Complex to the
directors during the year ended December 31, 1999:

                               COMPENSATION TABLE
<TABLE>
<CAPTION>

                               AGGREGATE            PENSION OR
                               COMPENSATION         RETIREMENT
                               RECEIVED FROM        BENEFITS ACCRUED     ESTIMATED ANNUAL     TOTAL COMPENSATION
        NAME OF PERSON,        AMERICAN EAGLE       AS PART OF FUND      BENEFITS UPON        FROM FUND COMPLEX
        POSITION               FUNDS, INC.          EXPENSES             RETIREMENT           PAID TO DIRECTORS*
        ---------------------- -------------------- -------------------- -------------------- --------------------
<S>                            <C>                  <C>                  <C>                  <C>
        James R. Jundt,
         Chairman............. $0                   $0                   $0                   $0
        John E. Clute......... $0                   $0                   $0                   $18,200
        Floyd Hall............ $0                   $0                   $0                   $18,200
        Demetre M. Nicoloff... $0                   $0                   $0                   $18,200
        Darrell R. Wells...... $0                   $0                   $0                   $18,200
        Clark W. Jernigan..... $0                   $0                   $0                   $0
</TABLE>

------------------
*Total Compensation paid to directors is for services on the board of The Jundt
 Growth Fund, Inc., Jundt Funds, Inc. and American Eagle Funds, Inc.


VOTE REQUIRED


         THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS OF THE COMPANY
VOTE TO SET THE NUMBER OF DIRECTORS AT SEVEN AND VOTE IN FAVOR OF THE NOMINEES
TO SERVE AS DIRECTORS OF THE COMPANY. The vote of a majority of the shares of
the Company represented at the Meeting, provided at least a quorum is
represented in person or by proxy, is sufficient for the election of the above
nominees. The proxies will vote for the above seven nominees. All of the
nominees listed above have consented to serve as Directors if elected. In the
event that any of the above nominees are not candidates for election at the
Meeting, the proxies may vote for such other persons as Jundt Associates may
designate. Nothing currently indicates such situation will arise.







                                       7
<PAGE>



                                  PROPOSAL TWO
                               THE MODIFICATION OF
                       FUNDAMENTAL INVESTMENT RESTRICTIONS



         Each Fund has a number of investment restrictions that are
"fundamental," which means that they may be changed only with the approval of
shareholders. Because certain fundamental investment restrictions, in the
opinion of Jundt Associates, are unnecessarily restrictive, Jundt Associates
proposed that certain of the Funds' investment restrictions be modified. The
Board of Directors has adopted these proposals, subject to shareholder approval.

         The Investment Company Act of 1940 (the "Investment Company Act")
requires that only certain activities of investment companies be governed by
fundamental investment restrictions. The Board of Directors has recommended that
shareholders approve proposed revisions to the fundamental investment
restrictions of the Funds governing these activities. Each proposed revision is,
in general, intended to provide the Board with the maximum flexibility permitted
under the Investment Company Act, and to provide uniformity among the Funds'
investment restrictions.


A.      MODIFY INVESTMENT RESTRICTIONS REGARDING BORROWING

         The Investment Company Act requires that each Fund have a fundamental
investment restriction governing its ability to borrow money. The proposed
modification to each Fund's current investment restriction is designed to
provide the Funds with additional borrowing power, should the Commission modify
its interpretation of the Investment Company Act. Additional borrowing power
allows the Funds greater flexibility to respond to sudden needs for cash. The
Funds' current investment restrictions regarding borrowing and the issuance of
senior securities are set forth below.

               The Fund may not borrow money, except from banks for temporary
         or emergency purposes or as required in connection with otherwise
         permissible leverage activities (as described in the Funds' Prospectus
         and Statement of Additional Information) and then only in an amount not
         in excess of one-third of the value of the Fund's total assets.


         IT IS PROPOSED THAT EACH FUND REPLACE ITS CURRENT INVESTMENT
RESTRICTION OR INVESTMENT RESTRICTIONS REGARDING BORROWING AND THE ISSUANCE OF
SENIOR SECURITIES WITH THE FOLLOWING INVESTMENT RESTRICTION:


               THE FUND MAY NOT BORROW MONEY IN EXCESS OF LIMITATIONS IMPOSED
         BY THE INVESTMENT COMPANY ACT OF 1940.

         The Board believes that the Funds' current investment restriction
regarding borrowing is unnecessarily restrictive and could be disadvantageous to
shareholders. The additional borrowing power will provide the


                                       8
<PAGE>



Funds with greater flexibility to respond to sudden needs for cash that may
arise and that cannot be anticipated. Ordinarily, a Fund would expect to be able
to meet needs for cash to facilitate redemptions by using current cash flow
arising from new investments, investment income, and liquidations of securities
in the ordinary course of business. However, there may be instances when these
sources of cash flow are not sufficient to meet current cash needs, in which
case the ability to borrow money may be advantageous to the Funds. In addition,
the Funds may use the additional borrowing power to purchase additional
securities, a practice known as "leveraging."


         The proposed investment restriction would permit each Fund to engage in
borrowing in a manner and to the full extent permitted by applicable law. The
Investment Company Act requires borrowings to have 300% asset coverage, which
means, in effect, that each Fund would be permitted to borrow up to an amount
equal to one-third of the value of its total assets under the proposed borrowing
investment restriction. This asset coverage requirement applies at all times,
and not just at the time of borrowing.


         All borrowing involves risks. Interest paid by a Fund on borrowed funds
will decrease the net earnings of the Fund. In addition, if a Fund borrows to
invest in additional securities, the Fund will incur a loss unless the income or
gain on such investment exceeded the interest payable with respect to the
borrowing. Borrowing for leverage will also increase a Fund's volatility and the
risk of loss in a declining market. The use of leverage in a declining market
will result in a greater decrease in net asset value (possibly by multiples,
depending upon the degree of leverage) than if the Fund were not so leveraged.
Fund shareholders may lose money as a result of the use of leverage.

B.      MODIFY INVESTMENT RESTRICTIONS REGARDING THE ISSUANCE OF SENIOR
        SECURITIES

         The Investment Company Act requires that each Fund have a fundamental
investment restriction governing its ability to issue senior securities. The
proposed modification to each Fund's current investment restriction is designed
to provide additional flexibility to issue senior securities, should the
Commission modify its interpretation of the Investment Company Act. The Funds'
current investment restriction regarding the issuance of senior securities is
set forth below.

         The Fund may not issue senior securities, as defined in the Investment
         Company Act, except as required in connection with otherwise
         permissible options, futures contracts and leverage activities (as
         described in the Funds' Prospectus and Statement of Additional
         Information).

         IT IS PROPOSED THAT EACH FUND REPLACE ITS CURRENT INVESTMENT
RESTRICTION REGARDING THE ISSUANCE OF SENIOR SECURITIES WITH THE FOLLOWING
INVESTMENT RESTRICTION:


                                       9
<PAGE>



               THE FUND MAY NOT ISSUE SENIOR SECURITIES IN EXCESS OF LIMITATIONS
         IMPOSED BY THE INVESTMENT COMPANY ACT OF 1940.

         The proposed investment restriction provides additional flexibility for
the Funds to issue senior securities, should the Commission modify its
interpretation of the Investment Company Act. Senior securities include any
obligation of a fund that takes priority over the claims of the fund's
shareholders. The Investment Company Act prohibits open-end funds from issuing
most types of senior securities, but permits funds, if specified conditions are
met, to enter into certain transactions that might be considered to involve the
issuance of senior securities. For example, a Fund may enter into a transaction
that obligates it to pay money at a future date, such as purchasing securities
on a when-issued basis, if cash or liquid securities are set aside to cover the
obligation. The proposed investment restriction permits these types of
transactions, if a Fund sets aside cash or liquid securities to cover its
obligations.

         The proposed investment restriction does not materially change the
Funds' current investment restrictions. However, rather than specifying events
where it is permissible for the Fund to issue senior securities, as the current
investment restrictions do, the proposed investment restriction simply limits
the ability of the Funds' to issue senior securities based on current
interpretations of the Investment Company Act. This will provide the Fund with
more flexibility should the staff of the Commission modify its interpretation of
the Investment Company Act to permit additional transactions which might
otherwise be considered an impermissible issuance of senior securities.

C.      MODIFY THE INVESTMENT RESTRICTION REGARDING CONCENTRATION IN A
        PARTICULAR INDUSTRY

         The Investment Company Act requires that each Fund have a fundamental
investment restriction governing its ability to concentrate investments in a
particular industry or group of industries. The proposed modification to each
Fund's current investment restriction is designed to provide additional
flexibility to concentrate in a particular industry (or group of industries),
should the Commission modify its interpretation of the Investment Company Act.
The Funds' current investment restrictions regarding industry concentration are
set forth below.


                  The Fund may not invest more than 25% of its total assets in
         any one industry (securities issued or guaranteed by the United States
         Government, its agencies or instrumentalities are not considered to
         represent industries); however, each Fund may invest more than 25% of
         its assets in one or more market sectors which may be made up of
         companies in a number of related industries.


                                       10
<PAGE>



         IT IS PROPOSED THAT THE FUNDS REPLACE THEIR CURRENT INVESTMENT
RESTRICTIONS REGARDING CONCENTRATION WITH THE FOLLOWING INVESTMENT RESTRICTION:


                  THE FUND MAY NOT CONCENTRATE ITS INVESTMENTS IN A PARTICULAR
         INDUSTRY, AS DETERMINED IN ACCORDANCE WITH THE INVESTMENT COMPANY ACT.
         SECURITIES ISSUED OR GUARANTEED BY THE U.S. GOVERNMENT OR ITS AGENCIES
         OR INSTRUMENTALITIES SHALL NOT BE CONSIDERED TO REPRESENT AN "INDUSTRY"
         WITHIN THE MEANING OF THIS LIMITATION. HOWEVER, A FUND MAY CONCENTRATE
         ITS INVESTMENTS IN ONE OR MORE MARKET SECTORS WHICH MAY BE MADE UP OF
         COMPANIES IN A NUMBER OF RELATED INDUSTRIES.

         The Investment Company Act requires that a Fund state its position
regarding concentration in an industry. While the Investment Company Act does
not define what constitutes "concentration," the staff of the Securities and
Exchange Commission (the "Commission") takes the position that investment of 25%
or more of a Fund's assets in an industry constitutes concentration. If a Fund
concentrates in an industry, it must at all times have 25% or more of its assets
invested in that industry, and if its policy is not to concentrate, it must
invest less than 25% of its assets in the applicable industry, unless, in either
case, the Fund discloses the specific conditions under which it will change from
concentrating to not concentrating or vice versa.

         As set forth above, each Fund has a policy not to concentrate its
investments in a particular industry, except for U.S. Government securities and
agencies or instrumentalities. A Fund is permitted to adopt reasonable
definitions of what constitutes an industry, or it may use standard
classifications recognized by the Commission, or some combination thereof.
Because a Fund may create its own reasonable industry classifications, Jundt
Associates believes that it is not necessary to include such matters in the
fundamental investment restrictions of the Funds.

         The proposed investment restrictions do not materially change the
Funds' current investment restrictions. However, rather than defining
concentration, as the current investment restrictions do, the proposed
investment restrictions state that whether a Fund is concentrating in an
industry shall be determined in accordance with the Investment Company Act as it
is interpreted from time to time. This will provide the Fund with more
flexibility should the staff of the Commission reinterpret the term
"concentrate."


D.      MODIFY THE INVESTMENT RESTRICTION REGARDING INVESTMENTS IN REAL ESTATE

         The Investment Company Act requires that each Fund have fundamental
investment restrictions governing its ability to invest in real estate. The
proposed modification to each Fund's current investment restriction is designed
to clarify that investments in securities backed by real estate or issued by
companies that deal in real estate are not prohibited. The Funds' current
investment restriction regarding real estate is set forth below.


                                       11
<PAGE>


         The Fund may not purchase or sell real estate or any interest therein,
         including interests in real estate limited partnerships, except
         securities issued by companies (including real estate investment
         trusts) that invest in real estate or interest therein.

         IT IS PROPOSED THAT EACH FUND REPLACE ITS CURRENT INVESTMENT
RESTRICTION REGARDING INVESTMENTS IN REAL ESTATE WITH THE FOLLOWING INVESTMENT
RESTRICTION:

                  THE FUND MAY NOT ACQUIRE OR SELL REAL ESTATE UNLESS ACQUIRED
         AS A RESULT OF OWNERSHIP OF SECURITIES OR ANOTHER PERMISSIBLE
         INSTRUMENT. THIS LIMITATION SHALL NOT PROHIBIT THE FUND FROM ACQUIRING
         OR SELLING INVESTMENTS THAT MAY BE BACKED OR SECURED BY REAL ESTATE OR
         INTERESTS IN REAL ESTATE OR INVESTMENTS IN COMPANIES THAT DEAL IN OR
         OWN REAL ESTATE OR INTERESTS IN REAL ESTATE.


         Both the current and proposed investment restrictions prohibit direct
investments in real estate. The proposed investment restriction clarifies,
however, that investments in securities backed by real estate or issued by
companies that deal in real estate are not prohibited. To the extent that a Fund
buys securities backed by real estate or issued by companies that deal in real
estate, the Fund's performance will be affected by the condition of the real
estate market. This industry is sensitive to factors such as changes in real
estate values and property taxes, overbuilding, variations in rental income, and
interest rates. The structure, cash flow, and management skill of real estate
companies could also affect performance.

E.      MODIFY THE INVESTMENT RESTRICTION REGARDING INVESTMENTS IN COMMODITIES

         The Investment Company Act requires that each Fund have fundamental
investment restrictions governing its ability to invest in commodities. The
proposed modification to each Fund's current investment restriction is designed
to clarify that the Funds are not permitted to invest in physical commodities or
contracts relating to physical commodities. The Funds' current investment
restriction regarding commodity investments is set forth below.

                  The Fund may not purchase or sell commodities or commodity
         contracts, except as required in connection with otherwise permissible
         options, futures contracts and commodity activities (as described in
         the Funds' Prospectus and Statement of Additional Information).


         IT IS PROPOSED THAT EACH FUND REPLACE ITS CURRENT INVESTMENT
RESTRICTION REGARDING INVESTMENTS IN COMMODITIES WITH THE FOLLOWING INVESTMENT
RESTRICTION:

                  THE FUND MAY NOT ACQUIRE OR SELL COMMODITIES OR CONTRACTS
         RELATING TO PHYSICAL COMMODITIES CONTRACTS UNLESS ACQUIRED AS A RESULT
         OF THE FUND'S OWNERSHIP OF ANOTHER PERMISSIBLE INSTRUMENT. THIS
         LIMITATION SHALL NOT PROHIBIT THE FUND FROM ACQUIRING OR SELLING
         INVESTMENTS THAT

                                       12
<PAGE>


         MAY BE BACKED OR SECURED BY PHYSICAL COMMODITIES OR INVESTMENTS IN
         COMPANIES THAT DEAL IN OR OWN PHYSICAL COMMODITIES.


         The purpose of the proposed change is to clarify that the Funds are not
permitted to invest in physical commodities or contracts relating to physical
commodities. The Investment Company Act requires a mutual fund to state as a
fundamental investment restriction the extent to which it may engage in the
purchase and sale of commodities. At the time the Investment Company Act was
enacted, the term "commodities" was understood to refer principally to physical
commodities such as agricultural products, precious and base metals, oil and
gas, and the like. In recent years, however, a variety of new financial
contracts and instruments, such as interest rate, currency and stock index
futures contracts, have been created which may be considered to be "commodities"
for regulatory purposes.


          Futures contracts are standardized, exchange-traded contracts that
require delivery of the underlying financial instrument (such as a bond,
currency or stock index) at a specified price, on a specified future date. The
buyer of the futures contract agrees to buy the underlying financial instruments
from the seller at a fixed purchase price upon the expiration of the contract.
The seller of the futures contract agrees to sell the underlying financial
instrument to the buyer at expiration at the fixed sales price. In most cases,
delivery never takes place. Instead, both the buyer and the seller, acting
independently of each other, usually liquidate their long and short positions
before the contract expires; the buyer sells futures and the seller buys
futures.

          Futures may be used for hedging (i.e., to protect against adverse
future price movements in portfolio securities, or in securities a fund intends
to purchase). For example, a portfolio manager who thinks that the stock market
might decline could sell stock index futures to safeguard a fund's portfolio. If
the market declines as anticipated, the value of stocks in the portfolio would
decrease, but the value of the futures contracts would increase. Futures
contracts may also be used to speculate on the market. For example, a portfolio
manager might buy stock index futures on the expectation that the value of the
particular index will rise, even though the stocks comprising the index are
unrelated to stocks held in the portfolio or that the portfolio manager intends
to purchase. Using futures for speculation, however, involves significant risk
since futures contracts are highly leveraged instruments. When a portfolio
manager enters into a futures contract, the manager needs to put up only a small
fraction of the value of the underlying contract as collateral, yet gains or
losses will be based on the full value of the contract. In order to avoid the
need to register with the Commodity Futures Trading Commission ("CFTC") as a
"commodity pool operator," each Fund will use futures contracts and options on
futures contracts only (a) for "bona fide hedging purposes" (as defined in CFTC
regulations) or (b) for other purposes so long as the aggregate initial margins
and premiums required in

                                       13
<PAGE>


connection with non-hedging positions do not exceed 5% of the liquidation value
of the Fund's portfolio.

         The use of futures contracts, options on futures contracts and similar
instruments would expose a Fund to additional investment risks and transaction
costs. Risks include: the risk that interest rates, securities prices or
currency markets will not move in the direction that the investment adviser
anticipates; an imperfect correlation between the price of the instrument and
movements in the prices of any securities or currencies being hedged; the
possible absence of a liquid secondary market for any particular instrument and
possible exchange-imposed price fluctuation limits; leverage risk, which is the
risk that adverse price movements in an instrument can result in a loss
substantially greater than the Fund's initial investment in that instrument; and
the risk that the counterparty to an instrument will fail to perform its
obligations.


F.      MODIFY THE INVESTMENT RESTRICTION REGARDING LENDING

         The Investment Company Act requires each Fund to have a fundamental
investment restriction regarding lending. The proposed modification to each
Fund's current investment restriction is designed to provide the Funds with
increased flexibility to rely on regulatory interpretations of Investment
Company Act, which may increase the ability of the Funds to engage in such
various types of lending. The Funds' current investment restrictions regarding
lending are set forth below.


                  The Fund may not make loans of its assets to other parties,
         including loans of its securities (although it may, subject to the
         other restrictions or policies stated in the Funds' Prospectus and in
         this Statement of Additional Information, purchase debt securities or
         enter into repurchase agreements with banks or other institutions to
         the extent a repurchase agreement is deemed to be a loan), in excess of
         one-third of it total assets.

                  IT IS PROPOSED THAT EACH FUND REPLACE ITS CURRENT INVESTMENT
         RESTRICTION REGARDING LENDING WITH THE FOLLOWING INVESTMENT
         RESTRICTION:

                  THE FUND MAY NOT MAKE LOANS IN EXCESS OF LIMITATIONS IMPOSED
         BY THE INVESTMENT COMPANY ACT.


         As noted above, each Fund's current lending investment restriction
prohibits making loans to others, but contains exceptions to this prohibition.
For example, each Fund is permitted to enter into repurchase agreements and
purchase of debt securities. Unlike the current investment restrictions, the
proposed investment restriction does not specify the particular types of lending
in which each Fund is permitted to engage. Instead, the proposed investment
restriction permits each Fund to lend in a manner and to the extent permitted by
applicable law. The proposed


                                       14
<PAGE>


change would, therefore, permit each Fund, subject to Board approval, to lend
its securities to the full extent permitted by the Investment Company Act.
Currently, the maximum amount that any Fund could lend under the Investment
Company Act would be portfolio securities equal to one-third of the value of the
Fund's total assets (including securities lent).


         In addition, under the proposed new fundamental investment restriction,
the Fund could rely on regulatory interpretations issued from time to time
concerning what types of transactions are not deemed to involve "lending" for
Investment Company Act purposes, and could engage in such other types of
"lending" as may be permitted under the Investment Company Act and applicable
interpretations from time to time. The proposed investment restriction, unlike
the current investment restrictions, thus would permit the Funds to take
advantage of new regulatory interpretations as they are issued, without seeking
shareholder approval.


         The risks associated with increased lending of portfolio securities, as
with other extensions of credit, consist of possible delay in recovery of the
securities or possible loss of rights in the collateral should the borrower fail
financially. Although voting rights or rights to consent with respect to the
loaned securities pass to the borrower, a Fund will retain the right to call the
loans at any time on reasonable notice.


VOTE REQUIRED

         THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND
VOTE TO APPROVE THE PROPOSED CHANGES TO THAT FUND'S INVESTMENT RESTRICTIONS. The
changes must be approved by a majority of the outstanding shares of the Fund, as
defined in the Investment Company Act, which means the lesser of the vote of (a)
67% of the shares of the Fund present at a meeting where more than 50% of the
outstanding shares are present in person or by proxy, or (b) more than 50% of
the outstanding shares of the Fund. Unless otherwise instructed, the proxies
will vote for the approval of the proposed investment restriction changes.







                                       15
<PAGE>


                                 PROPOSAL THREE
                          APPROVAL OF A NEW INVESTMENT
                         ADVISORY AGREEMENT BETWEEN EACH
                         FUND AND JUNDT ASSOCIATES, INC.

         PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN EACH
FUND AND JUNDT ASSOCIATES, INC.

         At the Meeting, the shareholders of each Fund will be asked to approve
a new Investment Advisory Agreement (the "New Advisory Agreement") between the
Fund and Jundt Associates, which will replace the Fund's existing Investment
Advisory Agreement with Jundt Associates (the "Existing Advisory Agreement").
This action is necessitated by a proposed change in ownership of Jundt
Associates (as detailed below), which will cause each Fund's Existing Advisory
Agreement to terminate automatically. To provide for the ongoing management of
the Funds following such change in ownership (which will occur as soon as
practicable following the shareholders' approval of the New Advisory
Agreements), Fund shareholders are being asked to approve the New Advisory
Agreements, which will take effect immediately upon such change in ownership.

         THE COMPANY'S BOARD OF DIRECTORS HAS APPROVED EACH FUND'S NEW ADVISORY
AGREEMENT AND, WITHOUT QUALIFICATION, RECOMMENDS THAT IT BE APPROVED BY THE
FUND'S SHAREHOLDERS.

         Jundt Associates serves as the investment advisor to each Fund under
the Existing Advisory Agreements. James R. Jundt is the Chairman of the Board
and Chief Executive Officer of Jundt Associates and currently owns 95% of its
stock. A trust benefiting Mr. Jundt's children and grandchildren owns the
remaining 5% of the stock. As soon as practicable following the shareholders'
approval of the New Advisory Agreements, Marcus E. Jundt, currently the
President and a portfolio manager of each Fund and son of James R. Jundt, has
announced that he will acquire all of the Jundt Associates shares currently
owned by James R. Jundt. This change in ownership (a "change in control" of
Jundt Associates within the meaning of the Investment Company Act) will cause
each Existing Advisory Agreement to terminate automatically. This, in turn, will
necessitate adoption by each Fund of its New Advisory Agreement to enable Jundt
Associates to continue to serve as the Funds' investment adviser following such
change in ownership. Under the Investment Company Act, each Fund's New Advisory
Agreement must be approved by the Fund's shareholders.



                                       16
<PAGE>



         The date of each Fund's Existing Advisory Agreement, the date of their
most recent approval by the Board of Directors, and the date of their approval
by Fund shareholders is set forth below:
<TABLE>
<CAPTION>
                                            DATE OF                    SHAREHOLDER       MOST RECENT
         FUND                               AGREEMENT                  APPROVAL         BOARD APPROVAL
         ----                               ---------                  --------         --------------
<S>                                         <C>                        <C>                 <C>
         Capital Appreciation Fund.......   12/28/1995                 12/28/1995          7/25/2000
         Twenty Fund.....................   12/4/1995                  12/22/1995          7/25/2000
</TABLE>

         At the most recent Board of Directors meeting on July 25, 2000, the
only action taken with respect to the investment advisory agreements (in
addition to the approval of the New Advisory Agreements) was a reapproval of the
Existing Advisory Agreements until further action by the Funds' shareholders or
the Board of Directors.

         Under each Fund's Existing Advisory Agreement, Jundt Associates is
responsible for managing the Fund's investment portfolio. The Board of Directors
supervises Jundt Associates' performance. Capital Appreciation Fund and Twenty
Fund pay Jundt Associates a monthly advisory fee at an annual rate of 1.3% of
the fund's average daily net assets. During each of the last three fiscal years,
each Fund paid advisory fees as follows:

                                            YEAR ENDED DECEMBER 31,
         FUND                          1997           1998          1999
         ----                          ---------------------------------

         Capital Appreciation Fund....   *             *             *
         Twenty Fund..................   *             *             *

         * Fund formed after completion of fiscal year.


         Jundt Associates also serves as the investment adviser to the Jundt
Opportunity Fund and Jundt Twenty-Five Fund, each a series of Jundt Funds, Inc.,
which have investment objective similar to the Capital Appreciation Fund and
Twenty Fund, respectively. Under the terms of its investment advisory agreements
with the Jundt Opportunity Fund and Jundt Twenty-Five Fund, Jundt Associates
receives from each fund a monthly advisory fee at an annual rate of 1.3% of the
fund's average daily net assets.


         Each Fund's Existing Advisory Agreement and New Advisory Agreement
provide for the same compensation to Jundt Associates and further provide that
the agreement may be terminated at any time, without the payment of any penalty,
by the Board of Directors of the Company or by the vote of a majority of the
outstanding shares of the Fund, or by Jundt Associates, upon 60 days' written
notice to the other party. Each Agreement also provides that for its automatic
termination in the event of its "assignment" (which includes any change in
control of Jundt Associates). The form of the New Advisory Agreement (marked to
indicate proposed revisions to the Existing Advisory Agreement) is attached to
this proxy statement as Appendix A.

                                       17
<PAGE>



         The only technical change being proposed in the New Advisory Agreement
(in addition to its effective date) is to the provision that governs how the
Agreement may be amended in the future. Each Existing Advisory Agreement
provides that "No material amendment to this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding shares of the
Fund." Each proposed New Advisory Agreement will provide that "This Agreement
may be amended in the manner prescribed by the Investment Company Act of 1940,
as amended, or any successor statute. If the Investment Company Act were to
require shareholder approval of such amendment, the approval shall mean a
majority of the outstanding shares of the Fund, as defined in the Investment
Company Act, which means the lesser of the vote of (a) 67% of the shares of the
Fund present at a meeting where more than 50% of the outstanding shares are
present in person or by proxy, or (b) more than 50% of the outstanding shares of
the Fund." The Board of Directors believes that this change could potentially
provide the Funds with the flexibility to adopt future amendments that,
according to applicable law, do not warrant the protections and expense of
obtaining shareholder approval.


         In approving the New Advisory Agreements and recommending their
approval by Fund shareholders, the Company's Board of Directors considered all
relevant facts and circumstances, including but not limited to the following
factors:

         o        The terms of the New Advisory Agreements (including the fees
                  payable to Jundt Associates) are substantially identical to
                  the Existing Advisory Agreements.

         o        Marcus E. Jundt has been employed by Jundt Associates as its
                  Vice Chairman and as a portfolio manager since 1992. He has
                  served as the President of U.S. Growth Investments, each
                  Fund's distributor, since its inception and, since 1999, has
                  served as each Fund's President. Over the past three years,
                  Marcus Jundt has been responsible for all aspects of Jundt
                  Associates' business lines and operations. In short, approval
                  of the New Advisory Agreements will not result in any
                  substantive changes in the manner in which Jundt Associates or
                  the Funds are managed or in the portfolio managers responsible
                  for managing the Funds.





                                       18
<PAGE>



                OFFICERS AND DIRECTORS OF JUNDT ASSOCIATES, INC.

         Information about each director and officer's position and term of
office with Jundt Associates, Inc. and business experience during the past five
years is set forth below. Unless otherwise indicated, all positions have been
held more than five years. No officer receives any compensation from the Funds.
<TABLE>
<CAPTION>
NAME AND (AGE)             POSITION                   DURING PAST FIVE YEARS
--------------             --------                   ----------------------
<S>                       <C>                         <C>
James R. Jundt (58)       Chairman                    See biographical information in Proposal One.

Marcus E. Jundt (35)      Vice Chairman               See biographical information in Proposal One.

Jon C. Essen (36)         Chief Financial Officer     Chief  Financial  Officer of Jundt  Associates,
                                                      Inc. since 1998.  Treasurer of The Jundt Growth
                                                      Fund,  Inc.,  Jundt Funds,  Inc. and,  American
                                                      Eagle   Funds,    Inc.   since   1999.   Senior
                                                      Financial    Analyst,     Norwest    Investment
                                                      Services,  Inc.,  1997 to 1998.  Fund Reporting
                                                      and Control  Supervisor,  Voyageur  Funds Inc.,
                                                      1994 to 1997.
</TABLE>


VOTE REQUIRED

         THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND
VOTE TO APPROVE THE NEW INVESTMENT ADVISORY AGREEMENT WITH JUNDT ASSOCIATES,
INC. Each Fund's new Investment Advisory Agreement must be approved by a
majority of the outstanding shares of the Fund, as defined in the Investment
Company Act, which means the lesser of the vote of (a) 67% of the shares of the
Fund present at a meeting where more than 50% of the outstanding shares are
present in person or by proxy, or (b) more than 50% of the outstanding shares of
the Fund.

         If the shareholders of any Fund fail to approve the New Advisory
Agreement, the Board of Directors will promptly consider alternative courses of
action and could request the shareholders of each such Fund to reconsider
approval of the New Advisory Agreement. Under the provisions of the Investment
Company Act and the terms of the Existing Advisory Agreement, the Existing
Advisory Agreement will terminate immediately upon the consummation of the
Assignment. If such a termination should occur before a new advisory agreement
has been approved by Fund shareholders, Jundt Associates will continue providing
advisory services to the Funds for compensation equal to the lesser of (a) the
amounts which would be payable to it under the Existing Advisory Agreement, or
(b) the actual out-of-pocket costs and expenses incurred by it in providing such
investment advisory services. In such event, Jundt Associates has agreed to
provide its services in

                                       19
<PAGE>


accordance with those terms, pending shareholder approval of the New Advisory
Agreement.



                              OFFICERS OF THE FUNDS

         Information about each officer's position and term of office with the
Funds and business experience during the past five years is set forth below.
Unless otherwise indicated, all positions have been held more than five years.
No officer receives any compensation from the Funds.
<TABLE>
<CAPTION>
                                                            BUSINESS EXPERIENCE
NAME AND (AGE)                 POSITION                     DURING PAST FIVE YEARS
--------------                 --------                     ----------------------

<S>                            <C>               <C>
James R. Jundt (58)            Chairman          See biographical information in Proposal One.

Marcus E. Jundt (35)           President         See biographical information in Proposal One.

Jon C. Essen (36)              Treasurer         See biographical information in Proposal Three.

James E. Nicholson (49)        Secretary         Partner with the law firm of Faegre & Benson LLP,
                                                 Minneapolis,  Minnesota,  which  has  served   as
                                                 general   counsel  to  the  Investment   Adviser,
                                                 Jundt  Growth  Fund,  Inc.,  Jundt  Funds,  Inc.,
                                                 American Eagle Funds, Inc., and  the  Distributor
                                                 since  their  inception.  Secretary of  The Jundt
                                                 Growth Fund,  Inc.  since  1991,   Jundt   Funds,
                                                 Inc.  since 1995  and  American Eagle Funds, Inc.
                                                 since 1999.


</TABLE>











                                       20
<PAGE>



                          TABLE OF FUND SHARES HELD BY
                       DIRECTORS AND OFFICERS OF THE FUNDS

         The following table sets forth, as of July 31, 2000, beneficial
ownership of the Funds' shares by each director and all directors and officers
as a group:

                                                NUMBER OF            PERCENT OF
NAME OF DIRECTOR/OFFICER                      SHARES OWNED              FUNDS
------------------------                      ------------           ----------

AMERICAN EAGLE CAPITAL APPRECIATION FUND
James R. Jundt                                 103,209.985            14.41%
Marcus E. Jundt                                200,239.259            27.96%
John E. Clute                                            -             0.00%
Floyd Hall                                               -             0.00%
Demetre M. Nicoloff                                      -             0.00%
Darrell R. Wells                                         -             0.00%
Clark W. Jernigan                               20,413.199             2.85%
ALL DIRECTORS AND OFFICERS AS A GROUP          325,156.442            45.40%


AMERICAN EAGLE TWENTY FUND
James R. Jundt                                 100,101.112            16.88%
Marcus E. Jundt                                200,202.224            33.76%
John E. Clute                                            -             0.00%
Floyd Hall                                               -             0.00%
Demetre M. Nicoloff                                      -             0.00%
Darrell R. Wells                                         -             0.00%
Clark W. Jernigan                                        -             0.00%
ALL DIRECTORS AND OFFICERS AS A GROUP          301,562.336            50.85%













                                       21
<PAGE>


                     ADDITIONAL INFORMATION ABOUT THE FUNDS


         As of December 31, 1999, the following persons were known to Jundt
Associates to be the beneficial owners of 5% or more of any of the Funds.


                                              NUMBER OF             PERCENT
FUND/NAME AND ADDRESS OF BENEFICIAL OWNER    SHARES OWNED           OF FUND
-----------------------------------------    ------------           -------

AMERICAN EAGLE CAPITAL APPRECIATION FUND

Marcus Jundt                                   200,239              27.96%
2200 Huntington Point Road
Wayzata, MN 55391

James R. Jundt                                 103,210              14.41%
1400 Bracketts Point Road
Wayzata, MN 55391

Vacan Corporation Profit Sharing Plan           58,040               8.10%
7223 Lanham Lane
Edina, MN 55439

James R. Jundt Irrevocable Trust                45,055               6.29%
Mary Joann Jundt, Trustee
1400 Bracketts Point Road
Wayzata, MN 55391

AMERICAN EAGLE TWENTY  FUND

Marcus Jundt                                   200,202              33.76%
2200 Huntington Point Road
Wayzata, MN 55391

James R. Jundt                                 100,101              16.88%
1400 Bracketts Point Road
Wayzata, MN 55391

James R. Jundt Irrevocable Trust                45,046               7.60%
Mary Joann Jundt, Trustee
1400 Bracketts Point Road
Wayzata, MN 55391










                                       22
<PAGE>



                    FIRMS THAT PROVIDE SERVICES TO THE FUNDS


                               INVESTMENT ADVISER
                             Jundt Associates, Inc.
                       1550 Utica Avenue South, Suite 950
                          Minneapolis, Minnesota 55416

                                   DISTRIBUTOR
                          U.S. Growth Investments, Inc.
                       1550 Utica Avenue South, Suite 950
                          Minneapolis, Minnesota 55416

                                  ADMINISTRATOR
                        Firstar Mutual Fund Services, LLC
                       615 East Michigan Street, 3rd Floor
                         Milwaukee, Wisconsin 53202-5207

























                                       23
<PAGE>


                              SHAREHOLDER PROPOSALS

         The Funds are not required to hold annual shareholder meetings. Since
the Funds do not hold regular meetings of shareholders, the anticipated date of
the next shareholder meeting cannot be provided. Any shareholder proposal which
may properly be included in the proxy solicitation material for a shareholder
meeting must be received by the applicable Fund no later than four months prior
to the date proxy statements are mailed to shareholders.


Dated: August 23, 2000                             James E. Nicholson, SECRETARY






























                                       24
<PAGE>


                                      PROXY

                    AMERICAN EAGLE CAPITAL APPRECIATION FUND
                    (A SERIES OF AMERICAN EAGLE FUNDS, INC.)
                       1550 UTICA AVENUE SOUTH, SUITE 950
                          MINNEAPOLIS, MINNESOTA 55416


         THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMERICAN
EAGLE FUNDS, INC.


         The undersigned hereby appoints James R. Jundt, Marcus E. Jundt and
James E. Nicholson, and each of them with power to act without the other and
with the right of substitution in each, as proxies of the undersigned and hereby
authorize each of them to represent and to vote, as designated below, all the
shares of American Eagle Capital Appreciation Fund (the "Fund"), a series of
American Eagle Funds, Inc. (the "Company"), held of record by the undersigned on
July 31, 2000 at the special meeting of shareholders of the Company to be held
on Wednesday, September 20 , 2000, or any adjournments or postponements thereof,
with all the power the undersigned would possess if present in person. All
previous proxies given with respect to the meeting hereby are revoked.



THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

         1.       PROPOSAL TO SET THE NUMBER OF DIRECTORS AT SEVEN AND TO ELECT
                  EACH MEMBER OF THE BOARD OF DIRECTORS.

         |_| FOR all nominees listed below        |_| WITHHOLD AUTHORITY to vote
         (except as marked to the contrary below) for all nominees listed below

         INSTRUCTION: To withhold authority to vote for any individual nominee,
                      strike a line through the nominee's name in the list
                      below.

         James R. Jundt    John E. Clute     Floyd Hall     Demetre M. Nicoloff

         Darrell R. Wells     Clark W. Jernigan    Marcus E. Jundt


         2.       PROPOSAL TO APPROVE THE MODIFICATION OF CERTAIN INVESTMENT
                  RESTRICTIONS OF THE FUND.

         |_| FOR all modifications listed below       |_| AGAINST all
         (except as marked to the contrary below)         modifications listed
                                                          below

         |_| ABSTAIN for all modifications listed below
         (except as marked to the contrary below)

         INSTRUCTION: To vote FOR any modification, circle the modification
                      listed below. To vote AGAINST any modification, strike a
                      line through the modification listed below.

         A.       Modify investment restriction regarding borrowing and the
                  issuance of senior securities



                                      -25-
<PAGE>

         B.       Modify investment restriction regarding concentration in a
                  particular industry

         C.       Modify investment restriction regarding investments in real
                  estate

         D.       Modify investment restriction regarding investments in
                  commodities

         E.       Modify investment restriction regarding lending


3.       PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE
         FUND AND JUNDT ASSOCIATES, INC.

                 |_| FOR       |_| AGAINST       |_| ABSTAIN

4.       In their discretion, the proxies are authorized to vote upon such other
         business as may properly come before the Special Joint Meeting of
         Shareholders or any adjournments or postponements thereof.


      THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1 THROUGH 3 ABOVE. RECEIPT OF THE NOTICE OF SPECIAL
JOINT MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.

      PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE OF SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY PARTNER OR OTHER
AUTHORIZED PERSON.



                                          [NAME OF SHAREHOLDER]


Dated: ________, 2000                     Signature: ________________________






                                      -26-
<PAGE>


                                      PROXY

                           AMERICAN EAGLE TWENTY FUND
                    (A SERIES OF AMERICAN EAGLE FUNDS, INC.)
                       1550 UTICA AVENUE SOUTH, SUITE 950
                          MINNEAPOLIS, MINNESOTA 55416


         THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF AMERICAN
EAGLE FUNDS, INC.


         The undersigned hereby appoints James R. Jundt, Marcus E. Jundt and
James E. Nicholson, and each of them with power to act without the other and
with the right of substitution in each, as proxies of the undersigned and hereby
authorize each of them to represent and to vote, as designated below, all the
shares of American Eagle Twenty Fund (the "Fund"), a series of American Eagle
Funds, Inc. (the "Company"), held of record by the undersigned on July 31, 2000
at the special meeting of shareholders of the Company to be held on Wednesday,
September 20 , 2000, or any adjournments or postponements thereof, with all the
power the undersigned would possess if present in person. All previous proxies
given with respect to the meeting hereby are revoked.



THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:

1.       PROPOSAL TO SET THE NUMBER OF DIRECTORS AT SEVEN AND TO ELECT EACH
         MEMBER OF THE BOARD OF DIRECTORS.

         |_| FOR all nominees listed below        |_| WITHHOLD AUTHORITY to vote
         (except as marked to the contrary below) for all nominees listed below

         INSTRUCTION: To withhold authority to vote for any individual nominee,
                      strike a line through the nominee's name in the list
                      below.

         James R. Jundt    John E. Clute    Floyd Hall    Demetre M. Nicoloff

         Darrell R. Wells    Clark W. Jernigan    Marcus E. Jundt


2.       PROPOSAL TO APPROVE THE MODIFICATION OF CERTAIN INVESTMENT RESTRICTIONS
         OF THE FUND.

         |_| FOR all modifications listed below        |_| AGAINST all
         (except as marked to the contrary below)      modifications listed
                                                       below

         |_| ABSTAIN for all modifications listed below
         (except as marked to the contrary below)

         INSTRUCTION: To vote FOR any modification, circle the modification
                      listed below. To vote AGAINST any modification, strike a
                      line through the modification listed below.

         A.       Modify investment restriction regarding borrowing and the
                  issuance of senior securities



                                      -27-
<PAGE>

         B.       Modify investment restriction regarding concentration in a
                  particular industry

         C.       Modify investment restriction regarding investments in real
                  estate

         D.       Modify investment restriction regarding investments in
                  commodities

         E.       Modify investment restriction regarding lending


3.       PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE
         FUND AND JUNDT ASSOCIATES, INC.

                 |_| FOR        |_| AGAINST        |_| ABSTAIN

4.       In their discretion, the proxies are authorized to vote upon such other
         business as may properly come before the Special Joint Meeting of
         Shareholders or any adjournments or postponements thereof.


      THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1 THROUGH 3 ABOVE. RECEIPT OF THE NOTICE OF SPECIAL
JOINT MEETING OF SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING IS
ACKNOWLEDGED BY YOUR EXECUTION OF THIS PROXY.

      PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE OF SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY PARTNER OR OTHER
AUTHORIZED PERSON.



                                           [NAME OF SHAREHOLDER]


Dated: ________, 2000                      Signature: ________________________




                                      -28-

<PAGE>




                                                                       EXHIBIT A

                          INVESTMENT ADVISORY AGREEMENT

         THIS AGREEMENT, is made and entered into this ____ day of _________,
____, by and between _______________________ (the "Fund"), a separately managed
series of American Eagle Funds, Inc., a Minnesota corporation (the "Company"),
and Jundt Associates, Inc., a Minnesota corporation (the "Adviser").

1.       INVESTMENT ADVISORY SERVICES

         The Company, for and on behalf of the Fund, hereby engages the Adviser,
and the Adviser hereby agrees to act as investment adviser for, and to manage
the affairs, business and the investment of the assets of the Fund.

         The investment of the assets of the Fund shall at all times be subject
to the applicable provisions of the Company's Articles of Incorporation, By-Laws
and Registration Statement on Form N-1A and any representations contained in the
Prospectus and Statement of Additional Information of the Fund and shall conform
to the policies and purposes of the Fund as set forth in such Registration
Statement and Prospectus and Statement of Additional Information and (i) as
interpreted from time to time by the Board of Directors of the Company and (ii)
as may be amended from time to time by the Board of Directors of the Company
and/or the shareholders of the Fund as permitted by the Investment Company Act
of 1940 and the rules and regulations promulgated thereunder, as now enacted,
promulgated or hereafter amended (collectively, the "Investment Company Act").
Within the framework of the investment policies of the Fund, the Adviser shall
have the sole and exclusive responsibility for the management of the Fund's
assets and making and execution of all investment decisions for the Fund. The
Adviser shall report to the Board of Directors of the Company regularly at such
times and in such detail as the Board may from time to time determine to be
appropriate, in order to permit the Board to determine the adherence of the
Adviser to the investment policies of the Fund.

         The Adviser shall, at its own expense, furnish the Fund with suitable
office space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. The Adviser shall arrange, if requested
by the Fund, for officers, employees or other Affiliated Persons (as defined in
Section 2(a)(3) of the Investment Company Act) of the Adviser to serve without
compensation from the Fund as directors, officers, or employees of the Company
if duly elected to such positions by the shareholders or directors of the
Company.

         The Adviser hereby acknowledges that all records necessary in the
operation of the Fund, including records pertaining to its shareholders and


                                       A-1
<PAGE>



investments, are the property of the Fund, and in the event that a transfer of
management or investment advisory services to someone other than the Adviser
should ever occur, the Adviser will promptly, and at its own cost, take all
steps necessary to segregate such records and deliver them to the Fund.

2.       COMPENSATION FOR SERVICES

         In payment for all services, facilities, equipment and personnel, and
for other costs of the Adviser hereunder, the Fund shall pay to the Adviser a
monthly investment advisory fee determined by applying the annual rate of 1.30%
to the Fund's average daily net assets.

         For purposes of the calculation of such fee, the Fund's net assets
shall be computed at the times and in the manner specified in the Company's
Registration Statement on Form N-1A. Such fee shall be payable on the fifth day
of each calendar month for service performed hereunder during the preceding
month. The fee applicable during the first and last months that this Agreement
is in effect shall be prorated according to the proportion which such portion of
the month bears to the full month.

3.       ALLOCATION OF EXPENSES

         In addition to the fees described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by the Adviser in its capacity as the
Fund's investment adviser. These Fund expenses include, by way of example, but
not by way of limitation, (a) brokerage and commission expenses; (b) interest
charges on borrowings; (c) fees and expenses of legal counsel and independent
auditors; (d) the Fund's organizational and offering expenses, whether or not
advanced by the Adviser; (e) federal, state, local and foreign taxes, including
issue and transfer taxes incurred by or levied on the Fund; (f) cost of
certificates representing common shares of the Fund and any other expenses
(including clerical expenses) of issuance, sale or repurchase of the common
shares of the Fund; (g) association membership dues; (h) fees and expenses of
registering and making notice filings with respect to the Fund's shares under
the appropriate federal and state securities laws; (i) expenses of printing and
distributing reports, notices and proxy materials to shareholders; (j) costs of
annual and special shareholders' meetings; (k) expenses of filing reports and
other documents with governmental agencies; (l) charges and expenses of the
Fund's administrator, custodian, registrar, transfer agent and dividend
disbursing agent; (m) expenses of disbursing dividends and distributions; (n)
compensation of the Fund's officers, directors and employees that are not
Affiliated Persons or Interested Persons (as defined in Section 2(a) of the
Investment Company Act) of the Adviser; (o) the cost of other personnel
providing services to the Fund; (p) travel expenses for attendance of Board of
Directors meetings by all


                                      A-2
<PAGE>



members of the Board of Directors of the Fund; (q) insurance expenses; (r) costs
of stationery and supplies; and (s) any extraordinary expenses of a nonrecurring
nature.

4.       FREEDOM TO DEAL WITH THIRD PARTIES

         The Adviser shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.

5.       EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT

         This Agreement shall become effective as of the day and date first
above written (the "Effective Date"). Wherever referred to in this Agreement,
the vote or approval of the holders of a majority of the outstanding shares of
the Fund shall mean the vote of 67% or more of such shares if the holders of
more than 50% of such shares are present in person or by proxy or the vote of
more than 50% of such shares, whichever is less.

         Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect through November 4, 2001, and thereafter shall continue in
effect for successive periods of 12 months thereafter, provided that each
continuance is specifically approved annually by (a) the vote of a majority of
the Company's Board of Directors who are not parties to the Agreement or
interested persons (as defined in the Investment Company Act) of the Company or
the Adviser, cast in person at a meeting called for the purpose of voting on
approval and (b) either (i) the vote of a majority of the outstanding voting
securities of the Fund or (ii) the vote of a majority of the Company's Board of
Directors.

         This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Company or by the vote of
the holders of a majority of the outstanding shares of the Fund, upon sixty (60)
days written notice to the Adviser. The Adviser may terminate this Agreement
without penalty on ninety (90) days written notice to the Company. This
Agreement shall automatically terminate in the event of its assignment as
defined in the Investment Company Act. This Agreement shall automatically
terminate upon completion of the dissolution, liquidation and winding up of the
Fund.

6.       LIMITATION OF LIABILITY

         The Adviser will not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund or its shareholders in connection with
the performance of its duties under this Agreement, except a loss


                                      A-3
<PAGE>



resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its duties
under this Agreement.

7.       AMENDMENTS TO AGREEMENT

         THIS AGREEMENT MAY BE AMENDED IN THE MANNER PRESCRIBED BY THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED, OR ANY SUCCESSOR STATUTE. IF THE
INVESTMENT COMPANY ACT WERE TO REQUIRE SHAREHOLDER APPROVAL OF SUCH AMENDMENT,
THE APPROVAL SHALL MEAN A MAJORITY OF THE OUTSTANDING SHARES OF THE FUND, AS
DEFINED IN THE INVESTMENT COMPANY ACT, WHICH MEANS THE LESSER OF THE VOTE OF (a)
67% OF THE SHARES OF THE FUND PRESENT AT A MEETING WHERE MORE THAN 50% OF THE
OUTSTANDING SHARES ARE PRESENT IN PERSON OR BY PROXY, OR (b) MORE THAN 50% OF
THE OUTSTANDING SHARES OF THE FUND.

8.       NOTICES

         Any notice under this Agreement shall be in writing, addressed,
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate in writing for receipt of such notice.

9.       NAME

         The Fund may use "American Eagle" as part of its name for so long as
the Adviser serves as investment adviser to the Fund. The Adviser may at any
time permit others, including companies registered under the Investment Company
Act to use the name "American Eagle".

         IN WITNESS WHEREOF, the Company and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.

                                       AMERICAN EAGLE FUNDS, INC.


                                       By:  ____________________________
                                          Its: ___________________________


                                       JUNDT ASSOCIATES, INC.


                                       By:  ____________________________
                                          Its: ___________________________





                                      A-4




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