Registration No. 2-73468
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __ [_]
Post-Effective Amendment No. 17 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 18 [X]
(Check appropriate box or boxes.)
FIDUCIARY CAPITAL GROWTH FUND, INC.
(Exact name of Registrant as Specified in Charter)
225 East Mason Street
Milwaukee, Wisconsin 53202
(Address of Principal Executive Offices) (Zip Code)
(414) 226-4555
(Registrant's Telephone Number, including Area Code)
Copy to:
Ted D. Kellner W. David Knox, II
225 East Mason Street Foley & Lardner
Milwaukee, Wisconsin 53202 777 East Wisconsin Avenue
(Name and Address of Agent for Service) Milwaukee, Wisconsin 53202
Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Rule 24f-2 of
the Investment Company Act of 1940, and filed its required Rule 24f-2
Notice for the Registrant's fiscal year ended September 30, 1996 on
November 22, 1996.
Approximate Date of Proposed Public Offering: As soon as practicable
after the Registration Statement becomes effective.
It is proposed that this filing will become effective (check appropriate
box):
[_] immediately upon filing pursuant to paragraph (b)
[X] on January 31, 1997 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2), of Rule 485
If appropriate, check the following box:
[_] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
<PAGE>
FIDUCIARY CAPITAL GROWTH FUND, INC.
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the Prospectus and
the Statement of Additional Information of the responses to the Items of
Parts A and B of Form N-1A.)
Caption or Subheading in Prospectus
Item No. on Form N-1A or Statement of Additional Information
Part A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Expenses
3. Condensed Financial Financial Highlights; Performance
Information Information
4. General Description Introduction; Investment
of Registrant Objectives and Policies
5. Management of the Management of the Fund; Per Share
Fund Income and Capital Changes; Capital
Structure
5A. Management's Discussion Management's Discussion of Fund
of Fund Performance Performance
6. Capital Stock and Dividends, Distributions and
Other Securities Taxes; Capital Structure; Shareholder
Reports
7. Purchase of Securities Determination of Net Asset Value;
Being Offered Purchase of Shares; Dividend Reinvestment;
Automatic Investment Plan; Individual
Retirement Account and Simplified Employee
Pension Plan; Retirement Plan
8. Redemption or Redemption of Shares; Systematic
Repurchase Withdrawal Plan
9. Legal Proceedings *
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information *
and History
13. Investment Objectives Investment Restrictions
and Policies
14. Management of the Directors and Officers of
Registrant the Fund
15. Control Persons and Directors and Officers of the
Principal Holders Fund; Principal Shareholders
of Securities
16. Investment Advisory Investment Adviser and
and Other Services Administrator; Custodian;
Independent Accountants
17. Brokerage Allocation Allocation of Portfolio Brokerage
and Other Practices
18. Capital Stock and Included in Prospectus under
Other Securities "Capital Structure" and Shareholder
Meetings
19. Purchase, Redemption and Included in Prospectus under
Pricing of Securities "Determination of Net Asset
Being Offered Value"; "Dividend Reinvestment";
"Automatic Investment Plan"; "Systematic
Withdrawal Plan"; "Exchange Privilege";
"Individual Retirement Account and
Simplified Employee Pension Plan";
"Retirement Plan" and Determination of Net
Asset Value and Performance; Information
Incorporated by Reference
20. Tax Status Taxes
21. Underwriters *
22. Calculations of Determination of Net Asset Value
Performance Data and Performance
23. Financial Statements Financial Statements
___________
* Answer negative or inapplicable
<PAGE>
P R O S P E C T U S
FIDUCIARY
CAPITAL GROWTH
FUND, INC.
A NO-LOAD
MUTUAL FUND
P R O S P E C T U S JANUARY 31, 1997
FIDUCIARY
CAPITAL GROWTH FUND, INC.
Fiduciary Capital Growth Fund, Inc. (the "Fund") is an open-end, diversified
management investment company -- a mutual fund. Its primary investment objective
is to produce long-term capital appreciation principally through investing in
common stocks. Current income is a secondary consideration.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. Investors are advised to
read this Prospectus and retain it for future reference. This Prospectus does
not set forth all of the information included in the Registration Statement and
Exhibits thereto which the Fund has filed with the Securities and Exchange
Commission. A Statement of Additional Information, dated January 31, 1997, which
is a part of such Registration Statement is incorporated by reference in this
Prospectus. Copies of the Statement of Additional Information will be provided
without charge to each person to whom a Prospectus is delivered upon written or
oral request made by writing to the address or calling the telephone number,
stated below. All such requests should be directed to the attention of the
Corporate Secretary.
FIDUCIARY CAPITAL GROWTH FUND, INC.
225 EAST MASON STREET
MILWAUKEE, WISCONSIN 53202
(414) 226-4555
FIDUCIARY CAPITAL GROWTH FUND, INC.
TABLE OF CONTENTS
PAGE NO.
---------
Expense Information 1
Financial Highlights 2
Introduction 2
Investment Objective and Policies 3
Management of the Fund 4
Determination of Net Asset Value 5
Purchase of Shares 5
Redemption of Shares 6
Dividend Reinvestment 7
Automatic Investment Plan 7
Systematic Withdrawal Plan 8
Exchange Privilege 8
Individual Retirement Account and
Simplified Employee Pension Plan 9
Retirement Plan 9
Dividends, Distributions and Taxes 10
Brokerage Transactions 10
Capital Structure 10
Shareholder Reports 11
Performance Information 12
Management's Discussion of
Fund Performance 12
Share Purchase Application 13
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases or Reinvested Dividends .... NONE
Deferred Sales Load ................................................ NONE
Redemption Fee .................................................... NONE*<F1>
Exchange Fee ....................................................... NONE
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees ....................................................0.92%
12b-1 Fees ......................................................... NONE
Other Expenses .....................................................0.27%
-----
TOTAL FUND OPERATING EXPENSES ......................................1.19%
======
*<F1>A fee of $10.00 is charged for each wire redemption.
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------ ------ --------
An investor would pay the following expenses
on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end
of each time period: $12 $38 $65 $144
The purpose of the preceding table is to assist investors in understanding
the various costs that an investor in the Fund will bear, directly or
indirectly. They should not be considered to be a representation of past or
future expenses. Actual expenses may be greater or lesser than those shown. See
"Management of the Fund" for a more complete discussion of applicable management
fees. The Annual Fund Operating Expenses are based on actual expenses incurred
for the year ended September 30, 1996. The example assumes a 5% annual rate of
return pursuant to requirements of the Securities and Exchange Commission. This
hypothetical rate of return is not intended to be representative of past or
future performance of the Fund.
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each year)
The Financial Highlights of the Fund should be read in conjunction with the
Fund's financial statements and notes thereto included in the Fund's Annual
Report to Shareholders. Further information about the performance of the Fund is
also contained in the Fund's Annual Report to Shareholders, copies of which may
be obtained without charge upon request.
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of year $21.58 $19.52 $20.08 $18.65 $17.55 $14.16 $18.79
Income from investment
operations:
Net investment income 0.13 0.11 0.06 0.07 0.10 0.19 0.23
Net realized and unrealized gains
(losses) on investments 2.24 3.87 0.72 3.33 2.39 4.35 (4.66)
------ ------ ------ ------ ------ ------ ------
Total from investment operations 2.37 3.98 0.78 3.40 2.49 4.54 (4.43)
Less distributions:
Dividends from net
investment income (0.12) (0.04) (0.05) (0.11) (0.16) (0.23) (0.20)
Distributions from
net realized gains (2.07) (1.88) (1.29) (1.86) (1.23) (0.92) --
------ ------ ------ ------ ------ ------ ------
Total from distributions (2.19) (1.92) (1.34) (1.97) (1.39) (1.15) (0.20)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of year $21.76 $21.58 $19.52 $20.08 $18.65 $17.55 $14.16
====== ======= ======= ====== ======= ======= =======
TOTAL INVESTMENT RETURN 12.7% 22.7% 4.1% 20.1% 15.3% 34.9% (23.8%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 45,835 42,197 38,871 47,420 38,476 30,684 19,460
Ratio of expenses to average
net assets 1.2% 1.2% 1.2% 1.2% 1.3% 1.5% 1.4%
Ratio of net investment income to
average net assets 0.6% 0.5% 0.3% 0.4% 0.6% 1.2% 1.1%
Portfolio turnover rate 43.7% 28.6% 20.9% 32.5% 58.9% 62.7% 55.1%
Average commission rate paid*<F2> $0.0601 -- -- -- -- -- --
</TABLE>
YEARS ENDED SEPTEMBER 30,
--------------------------
1989 1988 1987
------ ------- ------
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of year $15.19 $21.96 $22.51
Income from investment
operations:
Net investment income 0.14 0.03 0.12
Net realized and unrealized gains
(losses) on investments 3.49 (3.21) 3.11
------ ------- ------
Total from investment operations 3.63 (3.18) 3.23
Less distributions:
Dividends from net
investment income (0.03) (0.14) (0.10)
Distributions from
net realized gains -- (3.45) (3.68)
------ ------- ------
Total from distributions (0.03) (3.59) (3.78)
------ ------- ------
Net asset value, end of year $18.79 $15.19 $21.96
======= ======= =======
TOTAL INVESTMENT RETURN 24.0% (11.1%) 16.8%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 40,387 41,606 55,154
Ratio of expenses to average
net assets 1.3% 1.3% 1.1%
Ratio of net investment income to
average net assets 0.8% 0.3% 0.6%
Portfolio turnover rate 42.2% 43.4% 83.4%
Average commission rate paid*<F2> -- -- --
*<F2>Disclosure required for fiscal years beginning after September 1, 1995.
INTRODUCTION
The Fund was incorporated under the laws of Wisconsin on July 29, 1981. The
Fund is an open-end diversified management investment company registered under
the Investment Company Act of 1940. As an open-end investment company it obtains
its assets by continuously selling shares of its Common Stock, $.01 par value
("Common Stock"), to the public. Proceeds from such sales are invested by the
Fund in securities of other companies. In this manner, the resources of many
investors are combined and each individual investor has an interest in every one
of the securities owned by the Fund. The Fund provides each individual investor
with diversification by investing in the securities of many different companies
in a variety of industries and furnishes experienced management to select and
watch over its investments. As an open-end investment company, the Fund will
redeem any of its outstanding shares on demand of the owner at their net asset
value.
INVESTMENT OBJECTIVE AND POLICIES
The primary investment objective of the Fund is long-term capital
appreciation, and securities are selected for its portfolio primarily on this
basis. It is anticipated that the major portion of the Fund's portfolio will at
all times be invested in common stocks. The Fund's investment adviser purchases
those common stocks which it believes to be underpriced relative to the issuing
corporation's future growth prospects. It also purchases common stocks where the
price is significantly below the estimated market value of the issuing
corporation's assets less its liabilities on a per share basis. In making a
determination that the above criteria is met with respect to a particular common
stock, the Fund's investment adviser studies the financial statements of the
issuing corporation and other companies in the same industry, market trends and
economic conditions in general. Since current income is only a secondary factor
in the selection of investments, a particular issuer's dividend history is not a
primary consideration. As a consequence shares of the Fund are not suitable
investments for investors needing current income. There can be no assurance that
the primary objective of the Fund will be realized or that any income will be
earned. Nor can there be any assurance that the Fund's portfolio will not
decline in value. Additionally, since the major portion of the Fund's portfolio
consists of common stocks, it may be expected that its net asset value will be
subject to greater fluctuation than a portfolio containing a substantial amount
of fixed income securities.
Although it is anticipated that the major portion of the Fund's portfolio
will at all times be invested in common stocks, no minimum or maximum percentage
of the Fund's assets is required to be invested in common stocks or any other
type of security. When the Fund's investment adviser believes that securities
other than common stock offer opportunity for long-term capital appreciation,
the Fund may invest in publicly distributed convertible debt securities, non-
convertible debt securities assigned one of the highest three ratings of
Standard & Poor's Corporation or Moody's Investors Service, Inc., preferred
stocks, particularly those which are convertible into or carry rights to acquire
common stocks, and warrants. The Fund, except for defensive purposes, will at
all times have at least 80% of its investments in securities which the Fund's
investment adviser believes offer opportunity for growth of capital.
Cash and equivalents are retained by the Fund in amounts deemed adequate for
current needs. The Fund also has reserved freedom to invest any portion of its
assets in conservative fixed-income securities such as United States Treasury
Bills, certificates of deposit of U.S. banks, provided that the bank has
capital, surplus and undivided profits (as of the date of its most recently
published annual financial statements) with a value in excess of $100,000,000 at
the date of investment, commercial paper rated A-l or better by Standard &
Poor's Corporation, commercial paper master notes (which are floating rate
instruments without a fixed maturity) and repurchase agreements as a defensive
measure, when general economic conditions are believed to warrant such action.
Repurchase agreements are agreements under which the seller of a security agrees
at the time of sale to repurchase the security at an agreed time and price. The
Fund will not enter into repurchase agreements with entities other than banks or
invest over 5% of its assets in repurchase agreements with maturities of more
than seven days.
The Fund's investments (other than defensive investments) will be diversified
among securities issued by different companies and will not be concentrated in
any single industry. In investing for long-term capital appreciation the Fund
does not intend to place emphasis on short-term trading profits. As a
consequence, it expects usually to have a portfolio turnover rate of less than
50%. The annual portfolio turnover rate indicates changes in the Fund's
portfolio and is calculated by dividing the lesser of purchases or sales of
portfolio securities (excluding securities having maturities at acquisition of
one year or less) for the fiscal year by the monthly average of the value of the
portfolio securities (excluding securities having maturities at acquisition of
one year or less) owned by the Fund during the fiscal year. The annual portfolio
turnover rate may vary widely from year to year depending upon market conditions
and prospects. High turnover in any year will result in the payment by the Fund
from capital of above average amounts of brokerage commissions.
The Fund may acquire securities of unseasoned companies or so-called special
situations, where the investment risks are considerably greater than with common
stocks of more established companies, when its investment adviser believes such
investments offer the possibility of capital growth. However, not more than 5%
of the Fund's assets may be invested in securities of companies which have a
record of less than three years' continuous operation, including the operation
of any predecessor business of a company which came into existence as a result
of a merger, consolidation, reorganization or purchase of substantially all of
the assets of such predecessor business.
The Fund may invest up to 10% of its assets in securities of foreign issuers.
Such investments may involve risks which are in addition to the usual risks
inherent in domestic investments. In many countries, there is less publicly
available information about issuers than is available in the reports and ratings
published about companies in the United States. Additionally, foreign companies
may not be subject to uniform accounting, auditing and financial reporting
standards. Dividends and interest on foreign securities may be subject to
foreign withholding taxes, which would reduce the Fund's income without
providing a tax credit for the Fund's shareholders. Although the Fund intends to
invest in securities of foreign issuers domiciled in nations which the Fund's
investment adviser considers as having stable and friendly governments, there is
the possibility of expropriation, confiscatory taxation, currency blockage or
political or social instability which could affect investments in those nations.
Under certain circumstances the Fund may (a) invest in warrants, (b)
temporarily borrow money from banks for emergency or extraordinary borrowings,
(c) pledge its assets to secure borrowings, and (d) purchase securities of other
investment companies. A more complete discussion of the circumstances in which
the Fund may engage in these activities is included in the Fund's Statement of
Additional Information. Except for the investment policies discussed in this
paragraph, the investment objectives and other policies described under this
caption are not fundamental policies and may be changed without shareholder
approval. A change in the Fund's investment objectives may result in the Fund
having investment objectives different from the objectives which the shareholder
considered appropriate at the time of investment in the Fund.
MANAGEMENT OF THE FUND
As a Wisconsin corporation, the business and affairs of the Fund are managed
by its Board of Directors. Under an investment advisory agreement (the "Advisory
Agreement") with the Fund, Fiduciary Management, Inc. (the "Adviser"), 225 East
Mason Street, Milwaukee, Wisconsin 53202, furnishes continuous investment
advisory services and management to the Fund. In addition to the Fund, the
Adviser is the investment adviser to FMI Focus Fund, another mutual fund, and to
individuals and institutional clients (including investment companies) with
substantial investment portfolios. The Adviser was organized in 1980 and is
wholly owned by Ted D. Kellner and Donald S. Wilson. Since that time, Messrs.
Kellner and Wilson have been the senior executive officers of the Adviser and
are primarily responsible for the day-to-day management of the Fund's portfolio.
They have held this responsibility since the Fund commenced operations on
December 18, 1981. Mr. Kellner has been President, Treasurer and a Director of
the Fund and Mr. Wilson has been Vice President, Secretary and a Director of the
Fund during the same period.
The Adviser supervises and manages the investment portfolio of the Fund and
subject to such policies as the Board of Directors of the Fund may determine,
directs the purchase or sale of investment securities in the day to day
management of the Fund's investment portfolio. Under the Advisory Agreement, the
Adviser, at its own expense and without reimbursement from the Fund, furnishes
office space, and all necessary office facilities, equipment, and executive
personnel for managing the Fund's investments, and bears all sales and
promotional expenses of the Fund, other than expenses incurred in complying with
laws regulating the issue or sale of securities. For the foregoing, the Adviser
receives a monthly fee of 11/412 of 1% (1% per annum) on the first $30,000,000
of the daily net assets of the Fund and 11/412 of .75% (.75% per annum) on the
daily net assets of the Fund over $30,000,000. The advisory fees paid in the
fiscal year ended September 30, 1996 were equal to .92% of the Fund's average
net assets.
Under an Administration Agreement (the "Administration Agreement") with the
Fund, the Adviser supervises all aspects of the Fund's operations except those
performed by it pursuant to the Advisory Agreement. Under the Administration
Agreement, the Adviser at its own expense and without reimbursement from the
Fund, furnishes office space, and all necessary office facilities, equipment,
and executive personnel for supervising the Fund's operations. For the
foregoing, the Adviser receives a monthly fee of 11/412 of .1% (.1% per annum)
on the first $30,000,000 of the daily net assets of the Fund and 11/412 of .05%
(.05% per annum) on the daily net assets of the Fund over $30,000,000, subject
to a fiscal year minimum of $20,000. The administration fee paid in the fiscal
year ended September 30, 1996 was equal to .08% of the Fund's average net
assets.
DETERMINATION OF NET ASSET VALUE
The per share net asset value of the Fund is determined by dividing the total
value of its net assets (meaning its assets less its liabilities excluding
capital and surplus) by the total number of its shares outstanding at that time.
The net asset value is determined as of the close of regular trading (currently
4:00 p.m. Eastern time) on the New York Stock Exchange on each day the New York
Stock Exchange is open for trading. This determination is applicable to all
transactions in shares of the Fund prior to that time and after the previous
time as of which net asset value was determined. Accordingly, purchase orders
accepted or shares tendered for redemption prior to the close of regular trading
on a day the New York Stock Exchange is open for trading will be valued as of
the close of trading, and purchase orders accepted or shares tendered for
redemption after that time will be valued as of the close of the next trading
day.
Securities traded on any national stock exchange or quoted on the Nasdaq
National Market System will be valued on the basis of the last sale price on the
date of valuation or, in the absence of any sales on that date, the most recent
bid price. Other securities will be valued at the most recent bid price, if
market quotations are readily available. Any securities for which there are no
readily available market quotations and other assets will be valued at their
fair value as determined in good faith by the Board of Directors. Odd lot
differentials and brokerage commissions will be excluded in calculating values.
PURCHASE OF SHARES
Shares of Common Stock may be purchased directly from the Fund. Share
purchase application forms are included at the back of the Prospectus. The price
per share is the next determined per share net asset value after receipt of an
application. Additional purchase applications may be obtained from the Fund.
Purchase applications should be mailed directly to: Fiduciary Capital Growth
Fund, Inc., c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701. The U.S. Postal Service and other independent delivery services are not
agents of the Fund. Therefore, deposit of purchase applications in the mail or
with such services does not constitute receipt by Firstar Trust Company or the
Fund. PLEASE DO NOT mail letters by overnight courier to the Post Office Box
address. To purchase shares by overnight or express mail, please use the
following street address: Fiduciary Capital Growth Fund, Inc., c/o Firstar Trust
Company, Mutual Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin
53202. All applications must be accompanied by payment in the form of a check
made payable to Fiduciary Capital Growth Fund, Inc., or by direct wire transfer.
All purchases must be made in U.S. dollars and checks must be drawn on U.S.
banks. No cash will be accepted. Firstar Trust Company will charge a $20 fee
against a shareholder's account for any payment check returned to the custodian.
THE SHAREHOLDER WILL ALSO BE RESPONSIBLE FOR ANY LOSSES SUFFERED BY THE FUND AS
A RESULT. When a purchase is made by check (other than a cashiers or certified
check), the Fund may delay the mailing of a redemption check until it is
satisfied that the check has cleared. (It will normally take up to 3 days to
clear local personal or corporate checks and up to 7 days to clear other
personal and corporate checks.) To avoid redemption delays, purchases may be
made by cashiers or certified check or by direct wire transfers. Funds should be
wired to: Firstar Bank Milwaukee, NA, 777 East Wisconsin Avenue, Milwaukee,
Wisconsin, ABA #075000022, Firstar Trust Company, Account #112952137, for
further credit to: Fiduciary Capital Growth Fund, Inc., "name of shareholder
and existing account number" if any. The establishment of a new account by wire
transfer should be preceded by a phone call to Firstar Trust Company, 1-800-811-
5311 to provide information for the setting up of the account. A follow up
application should be sent for all new accounts opened by wire transfer.
Applications are subject to acceptance by the Fund, and are not binding until so
accepted. The Fund does not accept telephone orders for purchase of shares and
reserves the right to reject applications in whole or in part. The Board of
Directors of the Fund has established $1,000 as the minimum initial purchase and
$100 as the minimum for any subsequent purchase (except through dividend
reinvestment and the automatic investment plan), which minimum amounts are
subject to change at any time. Shareholders will be advised at least thirty days
in advance of any increases in such minimum amounts. Stock certificates for
shares so purchased are not issued unless requested in writing.
REDEMPTION OF SHARES
A shareholder may require the Fund to redeem his shares in whole or part at
any time during normal business hours. Redemption requests must be made in
writing and directed to: Fiduciary Capital Growth Fund, Inc., c/o Firstar
Trust Company, Mutual Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701. The U.S. Postal Service and other independent delivery services are not
agents of the Fund. Therefore, deposit of redemption requests in the mail or
with such services does not constitute receipt by Firstar Trust Company or the
Fund. PLEASE DO NOT mail letters by overnight courier to the Post Office Box
address. Redemption requests sent by overnight or express mail should be
directed to: Fiduciary Capital Growth Fund, Inc., Firstar Trust Company, Mutual
Fund Services, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin
53202. If a redemption request is inadvertently sent to the Fund, it will be
forwarded to Firstar Trust Company, but the effective date of redemption will be
delayed until the request is received by Firstar Trust Company. Requests for
redemption by telephone or telegram and requests which are subject to any
special conditions or which specify an effective date other than as provided
herein cannot be honored.
Redemption requests should specify the name of the Fund, the number of shares
or dollar amount to be redeemed, shareholder's name, account number, and the
additional requirements listed below that apply to the particular account.
TYPE OF REGISTRATION REQUIREMENTS
-------------------- ------------
Individual, Joint Tenants Redemption request signed by all
Sole Proprietor, Custodial person(s) required to sign for the
(Uniform Gift to Minors Act), account, exactly as it is
General Partners registered.
Corporations, Associations Redemption request and a corporate
resolution, signed by person(s)
required to sign for the
account, accompanied by signature
guarantee(s).
Trusts Redemption request signed by the
trustee(s) with a signature guarantee.
(If the trustee's name is not
registered on the account, a copy of
the trust document certified within
the last 60 days is also required.)
Redemption requests from shareholders in an Individual Retirement Account
must include instructions regarding federal income tax withholding. Unless
otherwise indicated, these redemptions, as well as redemptions of other
retirement plans not involving a direct rollover to an eligible plan, will be
subject to federal income tax withholding. If a shareholder is not included in
any of the above registration categories (e.g., executors, administrators,
conservators or guardians), the shareholder should call the transfer agent,
Firstar Trust Company (1-800-811-5311), for further instructions.
Signatures need not be guaranteed unless the proceeds of redemption are
requested to be sent by wire transfer, to a person other than the registered
holder or holders of the shares to be redeemed, or to be mailed to other than
the address of record, in which cases each signature on the redemption request
must be guaranteed by a commercial bank or trust company in the United States, a
member firm of the New York Stock Exchange or other eligible guarantor
institution. If certificates have been issued for any of the shares to be
redeemed, the certificates, properly endorsed or accompanied by a properly
executed stock power, must accompany the request for redemption. Redemptions
will not be effective or complete until all of the foregoing conditions,
including receipt of all required documentation by Firstar Trust Company in its
capacity as transfer agent, have been satisfied.
The redemption price is the net asset value next determined after receipt by
Firstar Trust Company in its capacity as transfer agent of the written request
in proper form with all required documentation. The amount received will depend
on the market value of the investments in the Fund's portfolio at the time of
determination of net asset value, and may be more or less than the cost of the
shares redeemed. Proceeds for shares redeemed will be mailed, wired or forwarded
via Electronic Funds Transfer ("EFT") to the holder no later than the seventh
day after receipt of the redemption request in proper form and all required
documentation except as indicated in "Purchase of Shares" for certain
redemptions of shares purchased by check. Firstar Trust Company currently
charges a $10.00 fee for each payment made by wire of redemption proceeds, which
will be deducted from the shareholder's account. Transfers via EFT generally
will take up to 3 business days to reach the shareholder's bank account.
The right to redeem shares of the Fund will be suspended for any period
during which the New York Stock Exchange is closed because of financial
conditions or any other extraordinary reason and may be suspended for any period
during which (a) trading on the New York Stock Exchange is restricted pursuant
to rules and regulations of the Securities and Exchange Commission, (b) the
Securities and Exchange Commission has by order permitted such suspension or (c)
an emergency, as defined by rules and regulations of the Securities and Exchange
Commission, exists as a result of which it is not reasonably practicable for the
Fund to dispose of its securities or fairly to determine the value of its net
assets.
DIVIDEND REINVESTMENT
Shareholders may elect to have all income dividends and capital gains
distributions reinvested or paid in cash, or elect to have income dividends
reinvested and capital gains distributions paid in cash or capital gains
distributions reinvested and income dividends paid in cash. Shareholders having
dividends and/or capital gains distributions paid in cash may choose to have
such amounts mailed or forwarded via EFT. Transfers via EFT generally will take
up to 3 business days to reach the shareholder's bank account. See the share
purchase application forms included at the back of this Prospectus for further
information. If the shareholder does not specify an election, all income
dividends and capital gains distributions will automatically be reinvested in
full and fractional shares of the Fund, calculated to the nearest 1,000th of a
share. Shares are purchased at the net asset value in effect on the business day
after the dividend record date and are credited to the shareholder's account on
the dividend payment date. As in the case of normal purchases, stock
certificates are not issued unless requested. Shareholders will be advised of
the number of shares purchased and the price following each reinvestment. An
election to reinvest or receive dividends and distributions in cash will apply
to all shares of the Fund registered in the same name, including those
previously purchased.
A shareholder may change an election at any time by notifying the Fund in
writing or by calling Firstar Trust Company at 1-800-811-5311. If such a notice
is received between a dividend declaration date and payment date, it will become
effective on the day following the payment date. The Fund may modify or
terminate its dividend reinvestment program at any time on thirty days' notice
to participants.
AUTOMATIC INVESTMENT PLAN
Shareholders wishing to invest fixed dollar amounts in the Fund on a regular
basis can make automatic purchases in amounts of $50 or more, on any date
specified by the shareholder each month or calendar quarter by using the Fund's
Automatic Investment Plan. If such date is a weekend or holiday, such purchase
shall be made on the next business day. There is no service fee for
participating in this Plan. To use this service, the shareholder must authorize
the transfer of funds from his checking, NOW or savings account by completing
the Automatic Investment Plan application included as part of the Share Purchase
Application located at the back of the Prospectus or by calling the Fund's
office at (414) 226-4555. Shareholders may change the date or amount of
investments at any time by writing to or calling Firstar Trust Company at 1-800-
811-5311. The Fund reserves the right to suspend, modify or terminate the
Automatic Investment Plan without notice.
The Automatic Investment Plan is designed to be a method to implement dollar
cost averaging. Dollar cost averaging is an investment approach providing for
the investment of a specific dollar amount on a regular basis thereby precluding
emotions dictating investment decisions. Dollar cost averaging does not insure a
profit nor protect against a loss.
SYSTEMATIC WITHDRAWAL PLAN
The Fund has available to shareholders a Systematic Withdrawal Plan, pursuant
to which a shareholder who owns Fund shares worth at least $10,000 at current
net asset value may provide that a fixed sum will be distributed to him at
regular intervals. To participate in the Systematic Withdrawal Plan, a
shareholder deposits his Fund shares with the Fund and appoints it as his agent
to effect redemptions of Fund shares held in his account for the purpose of
making monthly or quarterly withdrawal payments of a fixed amount to him out of
his account. To utilize the Systematic Withdrawal Plan, the shares cannot be
held in certificate form. The Systematic Withdrawal Plan does not apply to Fund
shares held in Individual Retirement Accounts or defined contribution retirement
plans. An application for participation in the Systematic Withdrawal Plan is
included as part of the Share Purchase Application located at the back of this
Prospectus or may be obtained by calling the Fund at (414) 226-4555.
The minimum amount of a withdrawal payment is $100. These payments will be
made from the proceeds of periodic redemption of shares in the account at net
asset value. Redemptions will be made at periodic intervals no more frequent
than monthly on the date specified by the shareholder or, if that day is a
weekend or holiday, on the next business day. See the Share Purchase Application
located in the back of this Prospectus for further information. Participation in
the Systematic Withdrawal Plan constitutes an election by the shareholder to
reinvest in additional Fund shares, at net asset value, all income dividends and
capital gains distributions payable by the Fund on shares held in such account,
and shares so acquired will be added to such account. The shareholder may
deposit additional Fund shares in his account at any time. Proceeds for shares
redeemed will be mailed, wired or forwarded via EFT to the holder no later than
the seventh day after receipt of the redemption request in proper form and all
required documentation except as indicated in "Purchase of Shares" for certain
redemptions of shares purchased by check. Firstar Trust Company currently
charges a $10.00 fee for each payment made by wire of redemption proceeds, which
will be deducted from the shareholder's account. Transfers via EFT generally
will take up to 3 business days to reach the shareholder's bank account.
Withdrawal payments cannot be considered as yield or income on the
shareholder's investment, since portions of each payment will normally consist
of a return of capital. Depending on the size or the frequency of the
disbursements requested, and the fluctuation in the value of the Fund's
portfolio, redemptions for the purpose of making such disbursements may reduce
or even exhaust the shareholder's account.
The shareholder may vary the amount or frequency of withdrawal payments or
temporarily discontinue them by notifying Firstar Trust Company in writing or
by telephone at 1-800-811-5311. To change the designated payee or payee's
address, you must notify Firstar Trust Company in writing.
EXCHANGE PRIVILEGE
A shareholder may redeem all or any portion of his Fund shares and use the
proceeds to purchase shares of FMI Focus Fund, another mutual fund managed by
the Adviser, or Portico Money Market Fund, a money market mutual fund not
affiliated with the Fund or the Adviser, if such shares are offered in his state
of residence. The redemption of shares of the Fund and the purchase of shares of
FMI Focus Fund and/or Portico Money Market Fund will be effected at the
respective net asset values of such funds. An exchange transaction is a sale and
purchase of shares for federal income tax purposes and may result in a capital
gain or loss. Prior to exercising the Exchange Privilege a shareholder should
obtain and carefully read the prospectus for FMI Focus Fund and/or Portico Money
Market Fund. The Exchange Privilege does not in any way constitute an offering
of, or recommendation on the part of the Adviser or the Fund or FMI Focus Fund
of, an investment in Portico Money Market Fund. The registration of both the
account from which the exchange is being made and the account to which the
exchange is made must be identical.
Exchange requests must be made in writing. Exchange request forms may be
obtained by writing the Fund or by calling (414) 226-4555. Written requests
should include the account numbers for both the Fund and FMI Focus Fund or
Portico Money Market Fund, if an account is already opened, and the amount of
the exchange. If a new account is to be opened by the exchange, the registration
must be identical to that of the original account. If certificates for shares
are held, they must be delivered properly endorsed as described in "Redemption
of Shares".
The Fund reserves the right, at any time without prior notice, to suspend,
limit, modify or terminate the Exchange Privilege or its use in any manner by
any person or class. In particular, since an excessive number of exchanges may
be disadvantageous to the Fund, the Fund reserves the right to terminate the
Exchange Privilege of any shareholder who makes more than five exchanges of
shares in a year or three in a calendar quarter.
INDIVIDUAL RETIREMENT ACCOUNT AND SIMPLIFIED EMPLOYEE PENSION PLAN
Individual shareholders may establish their own tax-sheltered Individual
Retirement Account ("IRA"). The Fund has a prototype IRA plan using IRS Form
5305-A. An individual may contribute to the IRA an annual amount equal to the
lesser of 100% of annual earned income or $2,000 ($4,000 maximum in the case of
a married couple where one spouse is not working and certain other conditions
are met).
Earnings on amounts held under the IRA accumulate free of federal income
taxes. Distributions from the IRA may begin at age 59-1/2, and must begin by
April 1 following the calendar year end in which a person reaches age 70-1/2.
Excess contributions, certain distributions prior to age 59-1/2 and failure to
begin distributions after age 70-1/2 may result in adverse tax consequences.
Under current IRS regulations, an IRA applicant must be furnished a
disclosure statement containing information specified by the IRS. The applicant
has the right to revoke his account within seven days after receiving the
disclosure statement in accordance with IRS regulations and obtain a full refund
of his contribution should he so elect. The custodian may, in its discretion,
hold the initial contribution uninvested until the expiration of the seven-day
revocation period. It anticipates that it will not so exercise its discretion
but reserves the right to do so.
Firstar Trust Company, Milwaukee, Wisconsin, serves as custodian and
furnishes the services provided for in the IRA plan as required by the Employee
Retirement Income Security Act of 1974 ("ERISA"). The custodian invests all cash
contributions, dividends and capital gains distributions in shares of the Fund.
For such services, the following fees are charged against the accounts of the
participants: $12.50 annual maintenance fee; $15 for transferring to a successor
trustee; $15 for distribution(s) to a participant; and $15 for refunding any
contribution in excess of the deductible limit.
The Fund's prototype IRA plan may also be used to establish a Simplified
Employee Pension Plan ("SEP/IRA"). The SEP/IRA is available to employers,
including self-employed individuals, who wish to purchase shares with tax
deductible contributions not exceeding annually for any one participant the
lesser of $30,000 or 15% of earned income. Under this plan, employer
contributions are made directly to the IRA accounts of eligible participants.
Requests for information and forms concerning the IRA and SEP/IRA should be
directed to the Fund. Included with the forms is a disclosure statement which
the IRS requires to be furnished to individuals who are considering an IRA or
SEP/IRA. Consultation with a competent financial and tax adviser regarding the
IRA and SEP/IRA is recommended.
RETIREMENT PLAN
A prototype defined contribution retirement plan is available for employers
who wish to purchase shares of the Fund with tax-deductible contributions not
exceeding annually the lesser of $30,000 or 25% of earned income. This plan
includes a cash or deferred 401(k) arrangement for employers who wish to allow
employees to elect to reduce their compensation and have such amounts
contributed to the plan, not to exceed $9,500 annually (as adjusted for cost-of-
living increases). The Fund has received an opinion letter from the Internal
Revenue Service that the prototype defined contribution retirement plan is
acceptable for use under Section 401 of the Internal Revenue Code, as amended,
(the "Code").
Firstar Trust Company, Milwaukee, Wisconsin, serves as custodian and
furnishes the services provided for in the retirement plan. The custodian
invests all cash contributions, dividends and capital gains distributions in
shares of the Fund. For such services, the following fees will be charged
against the accounts of the participants: $12.50 for annual maintenance fee per
participant account; $15 for a transfer to successor trustee; $15 for
distribution(s) to a participant; and $15 for a refund of an excess
contribution.
Requests for information and forms concerning the retirement plan should be
directed to the Fund. Consultation with a competent financial and tax adviser
regarding the retirement plan is recommended.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will endeavor to qualify annually for and elect tax treatment
applicable to a regulated investment company under Subchapter M of the Code.
Pursuant to the requirements of the Code, the Fund intends normally to
distribute substantially all of its net investment income and net realized
capital gains, if any, less any available capital loss carryover, to its
shareholders annually so as to avoid paying income tax on its net investment
income and net realized capital gains or being subject to a federal excise tax
on undistributed net investment income and net realized capital gains. For
federal income tax purposes, distributions by the Fund, whether invested in
additional shares of Common Stock or received in cash, will be taxable to the
Fund's shareholders except those shareholders that are not subject to tax on
their income.
Shareholders will be notified annually as to the federal tax status of
dividends and distributions. For federal income tax purposes, a shareholder's
cost for his shares is his basis and on redemption his gain or loss is the
difference between such basis and the redemption price. Distributions and
redemptions may also be taxed under state and local tax laws which may differ
from the Code.
BROKERAGE TRANSACTIONS
The Advisory Agreement authorizes the Adviser to select the brokers or
dealers that will execute the purchases and sales of the Fund's portfolio
securities. In placing purchase and sale orders for the Fund, it is the policy
of the Adviser to seek the best execution of orders at the most favorable price
in light of the overall quality of brokerage and research services provided.
The Advisory Agreement permits the Adviser to cause the Fund to pay a broker
which provides brokerage and research services to the Adviser a commission for
effecting securities transactions in excess of the amount another broker would
have charged for executing the transaction, provided the Adviser believes this
to be in the best interests of the Fund. Although the Fund does not intend to
market its shares through intermediary broker-dealers, the Fund may place
portfolio orders with broker-dealers who recommend the purchase of Fund shares
to clients if the Adviser believes the commissions and transaction quality are
comparable to that available from other brokers and allocate portfolio brokerage
on that basis.
CAPITAL STRUCTURE
The Fund's authorized capital consists of 10,000,000 shares of Common Stock.
Shareholders are entitled: (i) to one vote per full share of Common Stock; (ii)
to such distributions as may be declared by the Fund's Board of Directors out of
funds legally available; and (iii) upon liquidation, to participate ratably in
the assets available for distribution. There are no conversion or sinking fund
provisions applicable to the shares, and the holders have no preemptive rights
and may not cumulate their votes in the election of directors. Consequently the
holders of more than 50% of the shares of Common Stock voting for the election
of directors can elect the entire Board of Directors and in such event the
holders of the remaining shares voting for the election of directors will not be
able to elect any person or persons to the Board of Directors.
The Wisconsin Business 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 Act. The Fund has adopted the appropriate provisions in its Bylaws and
does not anticipate holding an annual meeting of shareholders to elect directors
unless otherwise required by the Act. The Fund has also adopted provisions in
its Bylaws for the removal of directors by its shareholders.
The shares are redeemable and are transferable. All shares issued and sold by
the Fund will be fully paid and nonassessable except as provided in Section
180.0622(2)(b) of the Wisconsin Business Corporation Law. Fractional shares of
Common Stock entitle the holder to the same rights as whole shares of Common
Stock. Firstar Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin
53202 acts as the Fund's transfer agent and dividend disbursing agent.
The Fund will not issue certificates evidencing shares of Common Stock
purchased unless so requested in writing. Where certificates are not issued, the
shareholder's account will be credited with the number of shares purchased,
relieving shareholders of responsibility for safekeeping of certificates and the
need to deliver them upon redemption. Written confirmations are issued for all
purchases of Common Stock. Any shareholder may deliver certificates to Firstar
Trust Company and direct that his account be credited with the shares. A
shareholder may direct Firstar Trust Company at any time to issue a certificate
for his shares of Common Stock without charge.
SHAREHOLDER REPORTS
Shareholders will be provided at least semi-annually with a report showing
the Fund's portfolio and other information and annually after the close of the
Fund's fiscal year, which ends September 30, with an annual report containing
audited financial statements. Shareholders who have questions about the Fund
should call Firstar Trust Company 1-800-811-5311 or (414) 765-4124 or write to:
Fiduciary Capital Growth Fund, Inc., 225 East Mason Street, Milwaukee, Wisconsin
53202, Attention: Corporate Secretary.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
FIDUCIARY CAPITAL GROWTH FUND AND NASDAQ COMPOSITE INDEX
date Fiduciary Capital Growth Fund Nasdaq Composite Index
9/30/86 10,000 10,000
9/30/87 11,680 12,670
9/30/88 10,384 11,048
9/30/89 12,876 13,468
9/30/90 9,811 9,805
9/30/91 13,235 14,991
9/30/92 15,260 16,610
9/30/93 18,328 21,743
9/30/94 19,079 21,786
9/30/95 23,410 29,738
9/30/96 26,383 34,972
AVERAGE ANNUAL TOTAL RETURN
1-YEAR +12.7%
5-YEAR +14.8%
10-YEAR +10.2%
Past performance is not predictive of future performance.
PERFORMANCE INFORMATION
The Fund's average annual compounded rate of return refers to the rate of
return which, if applied to an initial investment in the Fund at the beginning
of a stated period and compounded over the period, would result in the
redeemable value of the investment in the Fund at the end of the stated period.
The calculation assumes reinvestment of all dividends and distributions and
reflects the effect of all recurring fees.
The results below show the value of an assumed initial investment of $10,000
made on December 18, 1981 through December 31, 1996, assuming reinvestment of
all dividends and distributions.
VALUE OF VALUE OF
$10,000 CUMULATIVE $10,000 CUMULATIVE
DECEMBER 31 INVESTMENT % CHANGE DECEMBER 31 INVESTMENT % CHANGE
----------- ---------- --------- ----------- ---------- ----------
1981 $10,010 +.1% 1989 $29,777 +197.8%
1982 14,532 +45.3 1990 26,297 +163.0
1983 18,731 +87.3 1991 35,831 +258.3
1984 17,942 +79.4 1992 41,008 +310.1
1985 23,312 +133.1 1993 47,032 +370.3
1986 23,325 +133.3 1994 47,213 +372.1
1987 21,261 +112.6 1995 59,726 +497.3
1988 25,254 +152.5 1996 69,948 +599.5
The foregoing performance results are based on historical earnings and should
not be considered as representative of the performance of the Fund in the
future. An investment in the Fund will fluctuate in value and at redemption its
value may be more or less than the initial investment. The Fund may compare its
performance to other mutual funds with similar investment objectives and to the
industry as a whole, as reported by Lipper Analytical Services, Inc., Money,
Forbes, Business Week and Barron's magazines and The Wall Street Journal.
(Lipper Analytical Services, Inc. is an independent service that ranks over
1,000 mutual funds based upon total return performance.) The Fund may also
compare its performance to the Dow Jones Industrial Average, Nasdaq Composite
Index, Nasdaq Industrials Index, Value Line Composite Index, the Standard &
Poor's 500 Stock Index and the Consumer Price Index. Such comparisons may be
made in advertisements, shareholder reports or other communications to
shareholders.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
During the fiscal year ended September 30, 1996, corporate earnings growth
slowed in an environment of moderate economic growth and low inflation. This
stable economic backdrop along with significant cash flows into equity mutual
funds were important contributors to the stock market rise which positively
impacted the Fund's portfolio. The market advance, however, was concentrated
primarily in very large companies, with a few large technology stocks accounting
for a significant portion of the NASDAQ Composite performance. The Fund's
emphasis on smaller value-oriented securities resulted in performance lagging
somewhat behind indices, such as the NASDAQ Composite, which are dominated by
large companies.
FIDUCIARY CAPITAL GROWTH FUND, INC.
PURCHASE APPLICATION
--- This is a follow-up application to an investment by wire transfer.
Mail to:
Fiduciary Capital Growth Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
P.O. Box 701
Milwaukee, WI 53201-0701
Overnight Express Mail to:
Fiduciary Capital Growth Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
615 E. Michigan St., 3rd Floor
Milwaukee, WI 53202-5207
Use this form for individual, custodial, trust, profit-sharing or pension plan
accounts. DO NOT USE THIS FORM FOR FIDUCIARY CAPITAL GROWTH FUND, INC.-
SPONSORED 401(K), DEFINED CONTRIBUTION PLANS (KEOGH OR CORPORATE PROFIT-SHARING
AND MONEY-PURCHASE), IRA OR SEP IRA ACCOUNTS WHICH REQUIRE FORMS AVAILABLE
FROM THE FUND. For any additional information please call Fiduciary Capital
Growth Fund, Inc. at 1-800-811-5311 or 1-414-765-4124.
- ------------------------------------------------------------------------------
A. INVESTMENT
Please indicate the amount you wish to invest $ ------------ ($1,000 MINIMUM)
- --- By check enclosed payable to Fiduciary Capital Growth Fund, Inc.
Amount $ -----------
- --- By wire (call first): 1-800-811-5311 or 1-414-765-4124 to set up account.
Indicate total amount and date of wire $ ------------- Date ----------------
- ------------------------------------------------------------------------------
B. REGISTRATION
- --- Individual
- ------------------ ---- ------------------ ----------------- ---------
FIRST NAME M.I. LAST NAME SOCIAL SECURITY # BIRTHDATE
(Mo/Dy/Yr)
- --- Joint Owner*<F3>
(cannot be a minor)
- ------------------ ---- ------------------ ----------------- ---------
FIRST NAME M.I. LAST NAME SOCIAL SECURITY # BIRTHDATE
(Mo/Dy/Yr)
*<F3>Registration will be Joint Tenancy with Rights of Survivorship (JTWROS)
unless otherwise specified.
- --- Gift to Minors
- ------------------------------------------- ----- -----------------------
CUSTODIAN'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME
- ------------------------------------------- ----- -----------------------
MINOR'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME
- -------------------------- --------------------------- -------------------
MINOR'S SOCIAL SECURITY # MINOR'S BIRTHDATE (Mo/Dy/Yr) STATE OF RESIDENCE
- --- Corporation**<F4> (including Corporate Pension Plans),**<F4> Trust, Estate
or Guardianship
- -------------------------------------------------------------------------------
NAME OF TRUSTEE(S) (IF TO BE INCLUDED IN REGISTRATION)***<F5>
- --- Partnership***<F5>
- ------------------------------------------------------------------------------
NAME OF TRUST/CORPORATION**<F4>/PARTNERSHIP
- --- Other Entity***<F5>
- ------------------------------------ ---------------------------------------
SOCIAL SECURITY #/TAX ID # DATE OF AGREEMENT (Mo/Dy/Yr)
**<F4>Corporate Resolution is required. ***<F5>Additional documentation and
certification may be requested.
- ------------------------------------------------------------------------------
C. MAILING ADDRESS
- -------------------------------------- -------------------------------------
STREET APT/SUITE
- -------------------------------------------- ------- ---------------------
CITY STATE ZIP
- ------------------------------------- --------------------------------------
DAYTIME PHONE # EVENING PHONE #
- --- Duplicate Confirmation to:
- ------------------------------ --- -----------------------------------------
FIRST NAME M.I. LAST NAME
- -------------------------------------- -------------------------------------
STREET APT/SUITE
- -------------------------------------------- ------- ---------------------
CITY STATE ZIP
- ------------------------------------------------------------------------------
D. DISTRIBUTION OPTIONS
Capital gains & dividends will be reinvested if no option is selected.
Capital Gains & Dividends Capital Gains & Dividends
Reinvested --- in Cash ---
Capital Gains in Cash & Capital Gains Reinvested &
Dividends Reinvested --- Dividends in Cash ---
If the distribution is to be paid in cash, specify payment method below:
- --- Send check to mailing address in Section C.
- --- Automatic deposit to my bank account via Electronic Funds Transfer ("EFT").
May take up to 3 business days to reach your bank account (complete bank
information following).
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check (for checking accounts) or a savings account deposit
slip is required with your Application.
- ------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
- --------------------------------------- ------------------------------------
BANK NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
BANK ADDRESS
To ensure proper crediting of your bank account, please attach a voided check or
a deposit slip.
- ------------------------------------------------------------------------------
E. AUTOMATIC INVESTMENT PLAN
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check (for checking accounts) or a savings account deposit
slip is required with your Application.
Please start my Automatic Investment Plan as described in the Prospectus
beginning: Month --------- Year ------. I hereby instruct Firstar Trust
Company, Transfer Agent for Fiduciary Capital Growth Fund, Inc. to automatically
transfer $------------ (minimum $50) directly from my checking, NOW or savings
account named below on the ---------- of each month or the first business day
thereafter. I understand that I will be assessed a $20 fee if the automatic
purchase cannot be made due to insufficient funds, stop payment, or for any
other reason. Automatic investment plan contributions to your IRA will be
reported as current year contributions.
- ------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
- --------------------------------------- ------------------------------------
BANK NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
BANK ADDRESS
- -------------------------------------- -------------------------------------
SIGNATURE OF BANK ACCOUNT OWNER SIGNATURE OF JOINT OWNER
To ensure proper debiting of your bank account, please attach a voided check or
a deposit slip.
- ------------------------------------------------------------------------------
F. SYSTEMATIC WITHDRAWALS
I would like to withdraw from Fiduciary Capital Growth Fund, Inc. $ -----------
- ---- ($100 minimum) as follows:
- --- I would like to have payments made to me on or about the ------- day of each
month, or
- --- I would like to have payments made to me on or about the ------- day of the
months that I have circled below:
Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
- --- To have payments automatically deposited to your bank account. Complete bank
account information below. (A check will be mailed to the address in Section C
if this box is not checked.)
- ------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
- ----------------------------------------- ----------------------------------
BANK NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
BANK ADDRESS
To ensure proper crediting of your bank account, please attach a voided check
or a deposit slip.
- ------------------------------------------------------------------------------
G. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE
By selecting the options in Section (E or F), I hereby authorize the Fund to
initiate debits/credits to my account at the bank indicated and for the bank to
debit/credit the same to such account through the Automated Clearing House
("ACH") system.
UNDER THE PENALTY OF PERJURY, I CERTIFY THAT (1) THE SOCIAL SECURITY NUMBER OR
TAXPAYER INDENTIFICATION NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER
IDENTIFICATION NUMBER, AND (2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER
AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR DIVIDENDS, OR THE IRS HAS
NOTIFIED ME THAT I AM NO LONGER SUBJECT TO BACKUP WITHHOLDING. THE IRS DOES NOT
REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
- ---------------------------------- -----------------------------------------
DATE (Mo/Dy/Yr) SIGNATURE OF OWNER*<F6>
- ---------------------------------- -----------------------------------------
DATE (Mo/Dy/Yr) SIGNATURE OF JOINT OWNER, if any
*<F6>If shares are to be registered in (1) joint names, both persons should
sign, (2) a custodian for a minor, the custodian should sign, (3) a trust, the
trustee(s) should sign, or (4) a corporation or other entity, an officer should
sign and print name and title on space provided below.
- ------------------------------------------------------------------------------
PRINT NAME AND TITLE OF OFFICER SIGNING FOR A CORPORATION OR OTHER ENTITY
FIDUCIARY CAPITAL GROWTH FUND, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
414-226-4555
BOARD OF DIRECTORS
BARRY K. ALLEN
TED D. KELLNER
THOMAS W. MOUNT
DONALD S. WILSON
INVESTMENT ADVISER
AND ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR TRUST COMPANY
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-811-5311
or
414-765-4124
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
STATEMENT OF ADDITIONAL INFORMATION January 31, 1997
FIDUCIARY CAPITAL GROWTH FUND, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
This Statement of Additional Information is not a prospectus and
should be read in conjunction with the prospectus of Fiduciary Capital
Growth Fund, Inc. dated January 31, 1997. Requests for copies of the
prospectus should be made by writing to Fiduciary Capital Growth Fund,
Inc., 225 East Mason Street, Milwaukee, Wisconsin 53202, Attention:
Corporate Secretary or by calling (414) 226-4555.
FIDUCIARY CAPITAL GROWTH FUND, INC.
Table of Contents
Page No.
Investment Restrictions . . . . . . . . . . . . . . . . 1
Directors and Officers of the Fund . . . . . . . . . . 2
Principal Shareholders . . . . . . . . . . . . . . . . 5
Investment Adviser and Administrator . . . . . . . . . 6
Determination of Net Asset Value and Performance . . . 8
Allocation of Portfolio Brokerage . . . . . . . . . . . 9
Custodian . . . . . . . . . . . . . . . . . . . . . . . 10
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 11
Shareholder Meetings . . . . . . . . . . . . . . . . . 11
Independent Accountants . . . . . . . . . . . . . . . . 13
Financial Statements . . . . . . . . . . . . . . . . . 13
No person has been authorized to give any information or to make
any representations other than those contained in this Statement of
Additional Information and the Prospectus dated January 31, 1997 and, if
given or made, such information or representations may not be relied upon
as having been authorized by Fiduciary Capital Growth Fund, Inc.
This Statement of Additional Information does not constitute an
offer to sell securities.
INVESTMENT RESTRICTIONS
As set forth in the prospectus dated January 31, 1997 of
Fiduciary Capital Growth Fund, Inc. (the "Fund") under the caption
"Investment Objective and Policies", the primary investment objective of
the Fund is to produce long-term capital appreciation principally through
investing in common stocks. Current income is a secondary consideration.
Consistent with its investment objective, the Fund has adopted the
following investment restrictions which are matters of fundamental policy
and cannot be changed without approval of the holders of the lesser of:
(i) 67% of the Fund's shares present or represented at a shareholders
meeting at which the holders of more than 50% of such shares are present
or represented; or (ii) more than 50% of the outstanding shares of the
Fund.
1. The Fund will not purchase securities on margin,
participate in a joint-trading account, sell securities short, or write or
invest in put or call options. The Fund's investments in warrants, valued
at the lower of cost or market, will not exceed 5% of the value of the
Fund's net assets. Included within such amount, but not to exceed 2% of
the value of the Fund's net assets, may be warrants which are not listed
on the New York or American Stock Exchange.
2. The Fund will not borrow money or issue senior securities,
except for temporary bank borrowings (not in excess of 5% of the value of
its assets) for emergency or extraordinary purposes, and will not pledge
any of its assets except to secure borrowings and only to an extent not
greater than 10% of the value of the Fund's net assets.
3. The Fund will not lend money (except by purchasing publicly
distributed debt securities or entering into repurchase agreements
provided that repurchase agreements maturing in more than seven days plus
all other illiquid or not readily marketable securities will not exceed
10% of the Fund's total assets) and will not lend its portfolio
securities.
4. The Fund will not purchase securities of other investment
companies except (a) as part of a plan of merger, consolidation or
reorganization approved by the shareholders of the Fund or (b) securities
of registered closed-end investment companies on the open market where no
commission or profit results, other than the usual and customary broker's
commission and where as a result of such purchase the Fund would hold less
than 3% of any class of securities, including voting securities, of any
registered closed-end investment company and less than 5% of the Fund's
assets, taken at current value, would be invested in securities of
registered closed-end investment companies.
5. The Fund will not make investments for the purpose of
exercising control or management of any company.
6. The Fund will not purchase securities of any issuer (other
than the United States or an instrumentality of the United States) if, as
a result of such purchase, the Fund would hold more than 10% of any class
of securities, including voting securities, of such issuer or more than 5%
of the Fund's assets, taken at current value, would be invested in
securities of such issuer.
7. The Fund will not concentrate more than 25% of the value of
its assets, determined at the time an investment is made, exclusive of
government securities, in securities issued by companies primarily engaged
in the same industry.
8. The Fund will not acquire or retain any security issued by
a company, an officer or director of which is an officer or director of
the Fund or an officer, director or other affiliated person of its
investment adviser.
9. The Fund will not acquire or retain any security issued by
a company if any of the directors or officers of the Fund, or directors,
officers or other affiliated persons of its investment adviser
beneficially own more than 1/2% of such company's securities and all of
the above persons owning more than 1/2% own together more than 5% of its
securities.
10. The Fund will not act as an underwriter or distributor of
securities other than shares of the Fund and will not purchase any
securities which are restricted from sale to the public without
registration under the Securities Act of 1933, as amended.
11. The Fund will not purchase any interest in any oil, gas or
other mineral leases or any interest in any oil, gas or any other mineral
exploration or development program.
12. The Fund will not purchase or sell real estate or real
estate mortgage loans or real estate limited partnerships.
13. The Fund will not purchase or sell commodities or
commodities contracts or engage in arbitrage transactions.
DIRECTORS AND OFFICERS OF THE FUND
The name, age, address, principal occupations during the past
five years and other information with respect to each of the directors and
officers of the Fund are as follows:
BARRY K. ALLEN, 48
30 South Wacker Drive
Suite 3800
Chicago, Illinois 60606
(A DIRECTOR OF THE FUND)
Mr. Allen is Executive Vice President, Communications &
Information Products, Ameritech, Chicago, Illinois and has served in that
capacity since August, 1995. From September, 1993 until August, 1995,
Mr. Allen was President and Chief Operating Officer of Marquette Medical
Systems, Inc. (formerly known as Marquette Electronics, Inc.), a
manufacturer of medical electronic equipment and systems, Milwaukee,
Wisconsin. From July, 1993 to September, 1993, Mr. Allen was President
and Chief Executive Officer of Ameritech Illinois and from July, 1989 to
July, 1993, he was President and Chief Executive Officer of Wisconsin
Bell. Mr. Allen is a director of Harley-Davidson, Inc. Mr. Allen is also
a director of FMI Funds, Inc., an investment company for which the Adviser
serves as an investment adviser.
TED D. KELLNER*, 50
225 East Mason Street
Milwaukee, Wisconsin
(PRESIDENT, TREASURER AND A DIRECTOR OF THE FUND)
Mr. Kellner is Chairman of the Board and Chief Executive Officer
of Fiduciary Management, Inc., an investment advisory firm, which he co-
founded with Mr. Donald S. Wilson in 1980. Mr. Kellner has also been
President, Treasurer and a director of FMI Funds, Inc. since September,
1996.
THOMAS W. MOUNT, 65
401 Pine Terrace
Oconomowoc, Wisconsin
(A DIRECTOR OF THE FUND)
Mr. Mount is retired Chairman and a director of Stokely USA,
Inc., a canned and frozen food processor and was employed by such firm in
various capacities since 1957. Mr. Mount is also a director of FMI Funds,
Inc.
DONALD S. WILSON*, 53
225 East Mason Street
Milwaukee, Wisconsin
(VICE PRESIDENT, SECRETARY AND A DIRECTOR OF THE FUND)
Mr. Wilson is President and Treasurer of Fiduciary Management,
Inc. Mr. Wilson has also been a Vice President, Secretary and a director
of FMI Funds, Inc. since September, 1996.
GARY G. WAGNER, 53
225 East Mason Street
Milwaukee, Wisconsin
(VICE PRESIDENT AND ASSISTANT SECRETARY OF THE FUND)
Mr. Wagner has been Executive Vice President of Fiduciary
Management, Inc. since July 1, 1987. Mr. Wagner has also been a Vice
President and Assistant Secretary of FMI Funds, Inc. since September,
1996.
PATRICK ENGLISH, 36
225 East Mason Street
Milwaukee, Wisconsin
(VICE PRESIDENT OF THE FUND)
Mr. English is Senior Vice President of Fiduciary Management,
Inc. and has been employed by such firm in various capacities since
December, 1986. Mr. English has also been Vice President of FMI Funds,
Inc. since September, 1996.
_____________________
* Messrs. Kellner and Wilson are directors who are "interested persons" of
the Fund as that term is defined in the Investment Company Act of 1940.
During the fiscal year ended September 30, 1996 the Fund paid
$1,200 in director's fees. The Fund's standard method of compensating
directors is to pay each director who is not an officer of the Fund a fee
of $600 for each meeting of the Board of Directors attended.
COMPENSATION TABLE
Total
Pension or Compen-
Retirement sation
Aggregate Benefits Estimated from Fund
Compen- Accrued as Annual and Fund
sation Part of Benefits Complex
from Fund Upon Paid to
Name of Person Fund Expenses Retirement Director(1)
Barry K. Allen $0 $0 $0 $0
Ted D. Kellner 0 0 0 0
Thomas W. Mount 600 0 0 600
Donald S. Wilson 0 0 0 0
_______________
(1) FMI Funds, Inc. and the Fund are the only investment companies
in the Fund Complex.
PRINCIPAL SHAREHOLDERS
Set forth below are the names and addresses of all holder's of
the Fund's Common Stock who as of December 31, 1996 beneficially owned
more than 5% of the then outstanding shares of the Fund's Common Stock as
well as the number of shares of the Fund's Common Stock beneficially owned
by Ted D. Kellner, Donald S. Wilson and all officers and directors of the
Fund as a group, indicating in each case whether the person has sole or
shared power to vote or dispose of such shares.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent
Sole of
Power Shared Power Aggregate Class
Ted D. Kellner 63,415(1) 288,220(2)(3)(4) 351,635 16.7%
225 E. Mason Street
Milwaukee, WI 53202
Donald S. Wilson 4,201 261,694(3)(4) 265,895 12.6%
225 E. Mason Street
Milwaukee, WI 53202
Resource Bank & Trust -0- 156,598 156,598 7.4%
Company
900 Second Avenue
South
Minneapolis, MN 55402
Officers & Directors 368,534 17.5%
as a group (6 persons) (1)(2)(3)
(4)
______________________
(1) Includes 10,366 shares held under several custodial accounts for
Mr. Kellner's children and 8,450 shares held by an investment
partnership over which Mr. Kellner has voting and investment
authority.
(2) Includes 26,526 shares held in a trust for which Mr. Kellner is
a co-trustee and co-beneficiary.
(3) Includes 118,207 shares owned by the Adviser's profit sharing
plan and 110,106 shares owned by the Adviser's pension plan, for
which Messrs. Kellner and Wilson are co-trustees, and 33,381
shares owned by the Adviser, but does not include 122,639 shares
in accounts managed by the Adviser and over which the Adviser
has investment authority.
(4) Messrs. Kellner and Wilson share the power to vote and dispose
of the same 261,694 shares.
INVESTMENT ADVISER AND ADMINISTRATOR
As set forth in the Prospectus under the caption "Management of
the Fund" the investment adviser and administrator to the Fund is
Fiduciary Management, Inc. (the "Adviser"). The Adviser is wholly-owned
by Ted D. Kellner and Donald S. Wilson. The Adviser's executive officers
include Messrs. Kellner, Wilson, Wagner, English, Ms. Maria Blanco, Senior
Vice President and Secretary, Mr. John Brandser, Vice President-Fixed
Income, Ms. Camille Wildes, Vice President and Ms. Jody Reckard, Vice
President. The directors of the Adviser are Messrs. Kellner and Wilson.
Pursuant to an investment advisory agreement between the Fund
and the Adviser (the "Advisory Agreement") the Adviser furnishes
continuous investment advisory services to the Fund. During the fiscal
years ended September 30, 1996, September 30, 1995 and September 30, 1994,
respectively, the Fund paid the Adviser fees of $407,413, $382,808 and
$386,761.
The Fund pays all of its expenses not assumed by the Adviser
pursuant to the Advisory Agreement or the Administration Agreement
described below including, but not limited to, the professional costs of
preparing and the costs of printing its registration statements required
under the Securities Act of 1933 and the Investment Company Act of 1940
and any amendments thereto, the expense of registering its shares with the
Securities and Exchange Commission and in the various states, the printing
and distribution cost of prospectuses mailed to existing shareholders, the
cost of stock certificates, director and officer liability insurance,
reports to shareholders, reports to government authorities and proxy
statements, interest charges, brokerage commissions and expenses in
connection with portfolio transactions. The Fund also pays the fees of
directors who are not interested persons of the Adviser or officers or
employees of the Fund, salaries of administrative and clerical personnel,
association membership dues, auditing and accounting services, fees and
expenses of any custodian or trustees having custody of Fund assets,
expenses of repurchasing and redeeming shares, printing and mailing
expenses, charges and expenses of dividend disbursing agents, registrars
and stock transfer agents, including the cost of keeping all necessary
shareholder records and accounts and handling any problems related
thereto.
The Adviser has undertaken to reimburse the Fund to the extent
that the aggregate annual operating expenses, including the investment
advisory fee and the administration fee but excluding interest, taxes,
brokerage commissions and extraordinary items, exceed that percentage of
the daily net assets of the Fund for such year, as determined by
valuations made as of the close of each business day of the year, which is
the most restrictive percentage provided by the state laws of the various
states in which the Common Stock is qualified for sale or, if the states
in which the Common Stock is qualified for sale impose no such
restrictions, 2%. As of the date of this Statement of Additional
Information, no such state law provision was applicable to the Fund. The
Fund monitors its expense ratio on a monthly basis. If the accrued amount
of the expenses of the Fund exceeds the expense limitation, the Fund
creates an account receivable from the Adviser for the amount of such
excess. In such a situation the monthly payment of the Adviser's fee will
be reduced by the amount of such excess, subject to adjustment month by
month during the balance of the Fund's fiscal year if accrued expenses
thereafter fall below this limit. No expense reimbursement was required
during the fiscal years ended September 30, 1996, September 30, 1995 and
September 30, 1994.
As set forth in the Prospectus under the caption "Management of
the Fund" the Adviser is also the administrator to the Fund. Pursuant to
an administration agreement (the "Administration Agreement") between the
Fund and the Adviser, the Adviser supervises all aspects of the Fund's
operations except those performed by it as investment adviser. In
connection with such supervision the Adviser prepares and maintains the
books, accounts and other documents required by the Investment Company Act
of 1940 (the "Act"), determines the Fund's net asset value, responds to
shareholder inquiries, prepares the Fund's financial statements, prepares
reports and filings with the Securities and Exchange Commission and with
state Blue Sky authorities, furnishes statistical and research data,
clerical, accounting and bookkeeping services and stationery and office
supplies, keeps and maintains the Fund's financial accounts and records
and generally assists in all aspects of the Fund's operations. During the
fiscal years ended September 30, 1996, September 30, 1995 and September
30, 1994 the Fund paid the Adviser fees of $37,161, $35,520 and $35,784,
respectively, pursuant to the Administration Agreement.
The Advisory Agreement and the Administration Agreement will
remain in effect as long as their continuance is specifically approved at
least annually, by (i) the Board of Directors of the Fund, or by the vote
of a majority (as defined in the Act) of the outstanding shares of the
Fund, and (ii) by the vote of a majority of the directors of the Fund who
are not parties to the Advisory Agreement or the Administration Agreement
or interested persons of the Adviser, cast in person at a meeting called
for the purpose of voting on such approval. Both the Advisory Agreement
and the Administration Agreement provide that they may be terminated at
any time without the payment of any penalty, by the Board of Directors of
the Fund or by vote of a majority of the Fund's shareholders, on sixty
days' written notice to the Adviser, and by the Adviser on the same notice
to the Fund and that they shall be automatically terminated if they are
assigned.
The Advisory Agreement and the Administration Agreement provide
that the Adviser shall not be liable to the Fund or its shareholders for
anything other than willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations or duties. The Advisory Agreement
and the Administration Agreement also provide that the Adviser and its
officers, directors and employees may engage in other businesses, devote
time and attention to any other business whether of a similar or
dissimilar nature, and render services to others.
DETERMINATION OF NET ASSET VALUE AND PERFORMANCE
As set forth in the Prospectus under the caption "Determination
of Net Asset Value" the net asset value of the Fund will be determined as
of the close of regular trading (4:00 P.M. Eastern Time) on each day the
New York Stock Exchange is open for trading. The New York Stock Exchange
is open for trading Monday through Friday except New Year's Day,
Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. Additionally, if any of the
aforementioned holidays falls on a Saturday, the New York Stock Exchange
will not be open for trading on the preceding Friday and when any such
holiday falls on a Sunday, the New York Stock Exchange will not be open
for trading on the succeeding Monday, unless unusual business conditions
exist, such as the ending of a monthly or the yearly accounting period.
Any total rate of return quotation for the Fund will be for a
period of three or more months and will assume the reinvestment of all
dividends and capital gains distributions which were made by the Fund
during that period. Any period total rate of return quotation of the Fund
will be calculated by dividing the net change in value of a hypothetical
shareholder account established by an initial payment of $1,000 at the
beginning of the period by 1,000. The net change in the value of a
shareholder account is determined by subtracting $1,000 from the product
obtained by multiplying the net asset value per share at the end of the
period by the sum obtained by adding (A) the number of shares purchased at
the beginning of the period plus (B) the number of shares purchased during
the period with reinvested dividends and distributions. Any average
annual compounded total rate of return quotation of the Fund will be
calculated by dividing the redeemable value at the end of the period
(i.e., the product referred to in the preceding sentence) by $1,000. A
root equal to the period, measured in years, in question is then
determined and 1 is subtracted from such root to determine the average
annual compounded total rate of return.
The foregoing computation may also be expressed by the following
formula:
n
P(1+T) = ERV
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 stated
periods at the end of the stated periods.
ALLOCATION OF PORTFOLIO BROKERAGE
Decisions to buy and sell securities for the Fund are made by
the Adviser subject to review by the Fund's Board of Directors. In
placing purchase and sale orders for portfolio securities for the Fund, it
is the policy of the Adviser to seek the best execution of orders at the
most favorable price in light of the overall quality of brokerage and
research services provided, as described in this and the following
paragraph. In selecting brokers to effect portfolio transactions, the
determination of what is expected to result in best execution at the most
favorable price involves a number of largely judgmental considerations.
Among these are the Adviser's evaluation of the broker's efficiency in
executing and clearing transactions, block trading capability (including
the broker's willingness to position securities) and the broker's
financial strength and stability. The most favorable price to the Fund
means the best net price without regard to the mix between purchase or
sale price and commission, if any. Over-the-counter securities are
generally purchased and sold directly with principal market makers who
retain the difference in their cost in the security and its selling price.
In some instances, the Adviser feels that better prices are available from
non-principal market makers who are paid commissions directly. Although
the Fund does not intend to market its shares through intermediary broker-
dealers, the Fund may place portfolio orders with broker-dealers who
recommend the purchase of Fund shares to clients if the Adviser believes
the commissions and transaction quality are comparable to that available
from other brokers and may allocate portfolio brokerage on that basis.
In allocating brokerage business for the Fund, the Adviser also
takes into consideration the research, analytical, statistical and other
information and services provided by the broker, such as general economic
reports and information, reports or analyses of particular companies or
industry groups, market timing and technical information, and the
availability of the brokerage firm's analysts for consultation. While the
Adviser believes these services have substantial value, they are
considered supplemental to the Adviser's own efforts in the performance of
its duties under the Advisory Agreement. Other clients of the Adviser may
indirectly benefit from the availability of these services to the Adviser,
and the Fund may indirectly benefit from services available to the Adviser
as a result of transactions for other clients. The Advisory Agreement
provides that the Adviser may cause the Fund to pay a broker which
provides brokerage and research services to the Adviser a commission for
effecting a securities transaction in excess of the amount another broker
would have charged for effecting the transaction, if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of brokerage and research services provided by the
executing broker viewed in terms of either the particular transaction or
the Adviser's overall responsibilities with respect to the Fund and the
other accounts as to which it exercises investment discretion. Brokerage
commissions paid by the Fund during the fiscal years ended September 30,
1996, September 30, 1995 and September 30, 1994 totaled $47,786 on total
transactions of $34,328,697, $41,379 on total transactions of $26,115,547
and $53,101 on total transactions of $25,508,540, respectively. All of
the brokers to whom commissions were paid provided research services to
the Adviser.
CUSTODIAN
Firstar Trust Company, 615 East Michigan Street, Milwaukee,
Wisconsin 53202, acts as custodian for the Fund. As such, Firstar Trust
Company holds all securities and cash of the Fund, delivers and receives
payment for securities sold, receives and pays for securities purchased,
collects income from investments and performs other duties, all as
directed by officers of the Fund. Firstar Trust Company does not exercise
any supervisory function over the management of the Fund, the purchase and
sale of securities or the payment of distributions to shareholders.
Firstar Trust Company also acts as the Fund's transfer agent and dividend
disbursing agent.
TAXES
As set forth in the Prospectus under the caption "Dividends,
Distributions and Taxes" the Fund will endeavor to qualify annually for
and elect tax treatment applicable to a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended.
Dividends from the Fund's net investment income and
distributions from the Fund's net realized capital gains are taxable to
shareholders as ordinary income, whether received in cash or in additional
shares of Common Stock. The 70% dividends-received deduction for
corporations will apply to such dividends and distributions, subject to
proportionate reductions if the aggregate dividends received by the Fund
from domestic corporations in any year are less than 100% of the net
investment company income taxable distributions made by the Fund.
Any dividend or capital gain distribution paid shortly after a
purchase of shares of Common Stock, will have the effect of reducing the
per share net asset value of such shares by the amount of the dividend or
distribution. Furthermore, if the net asset value of the shares of Common
Stock immediately after a dividend or distribution is less than the cost
of such shares to the shareholder, the dividend or distribution will be
taxable to the shareholder even though it results in a return of capital
to him.
The Fund may be required to withhold Federal income tax at a
rate of 31% ("backup withholding") from dividend payments and redemption
proceeds if a shareholder fails to furnish the Fund with his social
security or other tax identification number and certify under penalty of
perjury that such number is correct and that he is not subject to backup
withholding due to the under reporting of income. The certification form
is included as part of the share purchase application and should be
completed when the account is opened.
SHAREHOLDER MEETINGS
The Wisconsin Business 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 Act. The Fund has adopted the appropriate
provisions in its bylaws and may, at its discretion, not hold an annual
meeting in any year in which none of the following matters is required to
be acted upon by the shareholders under the Act: (i) election of
directors; (ii) approval of an investment advisory agreement; (iii)
ratification of the selection of auditors; and (iv) approval of a
distribution agreement.
The Fund's bylaws also contain procedures for the removal of
directors by its shareholders. At any meeting of shareholders, duly
called and at which a quorum is present, the shareholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be
cast thereon, remove any director or directors from office and may elect a
successor or successors to fill any resulting vacancies for the unexpired
terms of removed directors.
Upon the written request of the holders of shares entitled to
not less than ten percent (10%) of all the votes entitled to be cast at
such meeting, the Secretary of the Fund shall promptly call a special
meeting of shareholders for the purpose of voting upon the question of
removal of any director. Whenever ten or more shareholders of record who
have been such for at least six months preceding the date of application,
and who hold in the aggregate either shares having a net asset value of at
least $25,000 or at least one percent (1%) of the total outstanding
shares, whichever is less, shall apply to the Fund's Secretary in writing,
stating that they wish to communicate with other shareholders with a view
to obtaining signatures to a request for a meeting as described above and
accompanied by a form of communication and request which they wish to
transmit, the Secretary shall within five business days after such
application either: (1) afford to such applicants access to a list of the
names and addresses of all shareholders as recorded on the books of the
Fund; or (2) inform such applicants as to the approximate number of
shareholders of record and the approximate cost of mailing to them the
proposed communication and form of request.
If the Secretary elects to follow the course specified in clause
(2) of the last sentence of the preceding paragraph, the Secretary, upon
the written request of such applicants, accompanied by a tender of the
material to be mailed and of the reasonable expenses of mailing, shall,
with reasonable promptness, mail such material to all shareholders of
record at their addresses as recorded on the books unless within five
business days after such tender the Secretary shall mail to such
applicants and file with the Securities and Exchange Commission, together
with a copy of the material to be mailed, a written statement signed by at
least a majority of the Board of Directors to the effect that in their
opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the
basis of such opinion.
After opportunity for hearing upon the objections specified in
the written statement so filed, the Securities and Exchange Commission
may, and if demanded by the Board of Directors or by such applicants
shall, enter an order either sustaining one or more of such objections or
refusing to sustain any of them. If the Securities and Exchange
Commission shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of
such objections, the Securities and Exchange Commission shall find, after
notice and opportunity for hearing, that all objections so sustained have
been met, and shall enter an order so declaring, the Secretary shall mail
copies of such material to all shareholders with reasonable promptness
after the entry of such order and the renewal of such tender.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 100 East Wisconsin Avenue, Suite 1500,
Milwaukee, Wisconsin 53202 currently serves as the independent accountants
for the Fund and has so served since the fiscal year ended September 30,
1989.
FINANCIAL STATEMENTS
The following financial statements are herein incorporated by
reference from the Fiduciary Capital Growth Fund, Inc. Annual Report dated
September 30, 1996 (File No. 811-3235), as filed with the Securities and
Exchange Commission through the EDGAR System on November 4, 1996:
Report of Independent Accountants
Statement of Net Assets as of September 30, 1996
Statement of Operations for the year ended
September 30, 1996
Statements of Changes in Net Assets for the years
ended September 30, 1996 and 1995
Financial Highlights
Notes to Financial Statements
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a.) Financial Statements (Financial Highlights included in Part A
and all incorporated by reference to the Fiduciary Capital
Growth Fund, Inc. Annual Report dated September 30, 1996 (File
No. 811-3235) as filed with the Securities and Exchange
Commission on November 4, 1996 in Part B).
Report of Independent Accountants
Statement of Net Assets as of September 30, 1996
Statement of Operations for the year ended September
30, 1996
Statements of Changes in Net Assets for the years
ended September 30, 1996 and 1995
Financial Highlights
Notes to Financial Statements
(b.) Exhibits
(1) Registrant's Articles of Incorporation, as
amended; Exhibit 1 to Amendment No. 1 to
Registrant's Registration Statement on Form N-1
is incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(2) Registrant's By-Laws, as amended.
(3) None
(4) Specimen Stock Certificate; Exhibit 4 to
Amendment No. 1 to Registrant's Registration
Statement on Form N-1 is incorporated by
reference pursuant to Rule 411 under the
Securities Act of 1933.
(5) Investment Advisory Agreement; Exhibit 5 to
Amendment No. 1 to Registrant's Registration
Statement on Form N-1 is incorporated by
reference pursuant to Rule 411 under the
Securities Act of 1933.
(6) None
(7) None
(8) Custodian Agreement with Firstar Trust Company;
Exhibit 8 to Amendment No. 1 to Registrant's
Registration Statement on Form N-1 is
incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(9) Administration Agreement; Exhibit 9 to Amendment
No. 10 to Registrant's Registration Statement on
Form N-1A is incorporated by reference pursuant
to Rule 411 under the Securities Act of 1933.
(10) Opinion of Foley & Lardner, counsel for
Registrant; Exhibit 10 to Amendment No. 13 to
Registrant's Registration Statement on Form N-1A
is incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(11) Consent of Price Waterhouse LLP
(12) None
(13) Subscription Agreement; Exhibit 13 to Amendment
No. 1 to Registrant's Registration Statement on
Form N-1 is incorporated by reference pursuant to
Rule 411 under the Securities Act of 1933.
(14.1) Fiduciary Funds Individual Retirement Account;
Exhibit 14.1 to Amendment No. 10 to Registrant's
Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(14.2) Fiduciary Funds Self-Employed Retirement Plan;
Exhibit 14.2 to Amendment No. 12 to Registrant's
Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(14.3) Fiduciary Funds Simplified Employee Pension
Individual Retirement Account.
(14.4) Amendments to Defined Contribution Retirement
Plan.
(15) None
(16) Schedule for Computation of Performance
Quotations; Exhibit 16 to Amendment No. 17 to
Registrant's Registration Statement on Form N-1A
is incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(17) Financial Data Schedule
(18) None
Item 25. Persons Controlled by or under Common Control with Registrant
Registrant is not controlled by any person. Registrant neither
controls any person nor is any person under common control with
Registrant.
Item 26. Number of Holders of Securities
Title of Class As of December 31, 1996
Common Stock, $.01 par value 959
Item 27. Indemnification
Pursuant to the authority of the Wisconsin Business Corporation
Law, Registrant's Board of Directors has adopted the following By-Law
which is in full force and effect and has not been modified or cancelled:
Article VII
INDEMNIFICATION
7.01 Provision of Indemnification. The corporation shall
indemnify all of its corporate representatives against expenses,
including attorney's fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection
with the defense of any action, suit or proceeding, or threat or
claim of such action suit or proceeding, whether civil, criminal,
administrative, or legislative, no matter by whom brought, or in any
appeal in which they or any of them are made parties or a party by
reason of being or having been a corporate representative, if the
corporate representative acted in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of
the corporation and with respect to any criminal proceeding, he had
no reasonable cause to believe his conduct was unlawful provided that
the corporation shall not indemnify corporate representatives in
relation to matters as to which any such corporate representative
shall be adjudged in such action, suit or proceeding to be liable for
gross negligence, willful misfeasance, bad faith, reckless disregard
of the duties and obligations involved in the conduct of his office,
or when indemnification is otherwise not permitted by the Wisconsin
Business Corporation Law.
7.02 Determination of Right to Indemnification. In the absence
of an adjudication which expressly absolves the corporate
representative, or in the event of a settlement, each corporate
representative shall be indemnified hereunder only if a determination
that indemnification of the corporate representative is proper
because he has met the applicable standard of conduct set forth in
Section 7.01. Such determination shall be made: (i) by the board of
directors, by a majority vote of a quorum which consists of directors
who were not parties to the action, suit or proceeding; or (ii) if
the required quorum is not obtainable or if a quorum of disinterested
directors so direct, by independent legal counsel in a written
opinion. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person was guilty of willful misfeasance, bad
faith, gross negligence or reckless disregard to the duties and
obligations involved in the conduct of his or her office, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
7.03 Allowance of Expenses. Expenses, including attorneys'
fees, incurred in the preparation of and/or presentation of the
defense of a civil or criminal action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such
action, suit or proceeding as authorized in the manner provided in
Sections 180.0853 or 180.0856 of the Wisconsin Business Corporation
Law upon receipt of an undertaking by or on behalf of the corporate
representative, secured by a surety bond or other similar insurance
paid for by such corporate representative, to repay such amount
unless it shall ultimately be determined that he or she is entitled
to be indemnified by the corporation as authorized in this by-law.
7.04 Additional Rights to Indemnification. The indemnification
provided by this by-law shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under these by-
laws, any agreement, vote of shareholders or disinterested directors
or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person subject to the
limitations imposed from time to time by the Investment Company Act
of 1940, as amended.
7.05 Insurance. This corporation shall have power to purchase
and maintain insurance on behalf of any corporate representative
against any liability asserted against him or her and incurred by him
or her in such capacity or arising out of his or her status as such,
whether or not the corporation would have the power to indemnify him
or her against such liability under this by-law, provided that no
insurance may be purchased or maintained to protect any corporate
representative against liability for gross negligence, willful
misfeasance, bad faith, or reckless disregard of the duties and
obligations involved in the conduct of his or her office.
7.06 Definitions. "Corporate Representative" means an
individual who is or was a director, officer, agent or employee of
the corporation or who serves or served another corporation,
partnership, joint venture, trust or other enterprise in one of these
capacities at the request of the corporation and who, by reason of
his or her position, is, was or is threatened to be made a party to a
proceeding described herein.
In reference to Article VII, Section 7.01 of the By-laws,
Section 180.0851 of the Wisconsin Business Corporation Law provides for
mandatory indemnification (a) if a corporate representative was successful
on the merits or otherwise in the defense of a proceeding, and (b) if the
corporate representative was not successful on the merits or otherwise but
the liability incurred was not the result of a breach or failure to
perform a duty which constituted any of the following: (1) a willful
failure to deal fairly with the corporation or its shareholders in
connection with a matter in which the corporate representative has a
material conflict of interest; (2) a violation of criminal law, unless the
corporate representative had reasonable cause to believe his or her
conduct was lawful or no reasonable cause to believe his or her conduct
was unlawful; (3) a transaction from which the corporate representative
derived an improper personal profit; or (4) willful misconduct.
Insofar as indemnification for and with respect to liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by Registrant of expenses incurred or paid by a
director, officer or controlling person or Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
Information with respect to Messrs. Kellner, Wilson, Wagner and
English is incorporated by reference to pages 3 and 4 of the Statement of
Additional Information pursuant to Rule 411 under the Securities Act of
1933.
Item 29. Principal Underwriters
Registrant has no principal underwriters.
Item 30. Location of Accounts and Records
All accounts, books, or other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and the
rules promulgated thereunder are in the physical possession of
Registrant's Treasurer, Ted D. Kellner, at Registrant's corporate offices,
225 East Mason Street, Milwaukee, Wisconsin 53202.
Item 31. Management Services
All management-related service contracts entered into by
Registrant are discussed in Parts A and B of this registration Statement.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for effectiveness of this Amended Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amended Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Milwaukee
and State of Wisconsin on the 24th day of January, 1997.
FIDUCIARY CAPITAL GROWTH FUND, INC.
(Registrant)
By: /s/ Ted D. Kellner
Ted D. Kellner, President
Pursuant to the requirements of the Securities Act of 1933, this
Amended Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Name Title Date
/s/ Ted D. Kellner Principal Executive, January 24, 1997
Ted D. Kellner Financial and Accounting
Officer and Director
/s/ Donald S. Wilson
Donald S. Wilson Director January 27, 1997
_________________________
Thomas W. Mount Director January __, 1997
/s/ Barry K. Allen
Barry K. Allen Director January 28, 1997
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(1) Registrant's Articles of Incorporation,
as amended*
(2) Registrant's By-Laws, as
amended
(3) None
(4) Specimen Stock Certificate*
(5) Investment Advisory Agreement*
(6) None
(7) None
(8) Custodian Agreement with First
Wisconsin Trust Company*
(9) Administration Agreement*
(10) Opinion of Foley & Lardner, counsel for
Registrant*
(11) Consent of Price Waterhouse LLP
(12) None
(13) Subscription Agreement*
(14.1) Fiduciary Funds Individual Retirement
Account*
(14.2) Fiduciary Funds Self-Employed
Retirement Plan*
(14.3) Fiduciary Funds Simplified Employee
Pension Individual Retirement Account
(14.4) Amendments to Defined Contribution
Retirement Plan
(15) None
(16) Schedule for Computation of Performance
Quotations*
(17) Financial Data Schedule
(18) None
___________________________
*Incorporated by reference.
Exhibit 2
BYLAWS
OF
FIDUCIARY CAPITAL GROWTH FUND, INC.
(a Wisconsin corporation)
<PAGE>
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may
have such principal and other business offices, either within or without
the State of Wisconsin, as the Board of Directors may designate or as the
business of the corporation may require from time to time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but need not be, identical
with the principal office in the State of Wisconsin, and the address of
the registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the
shareholders, if the annual meeting shall be held, shall be held in
December of each year, or at such other time and date as may be fixed by
or under the authority of the Board of Directors, for the purpose of
electing directors and for the transaction of such other business as may
come before the meeting. The corporation shall not be required to hold an
annual meeting in any year in which none of the following is required to
be acted on by shareholders under the Investment Company Act of 1940:
(i) Election of directors;
(ii) Approval of the corporation's investment advisory
contract;
(iii) Ratification of the selection of the
corporation's independent public accountants; and
(iv) Approval of the corporation's distribution
agreement, if any.
2.02. Special Meetings.
(a) Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by the Wisconsin Business
Corporation Law, may be called by the Board of Directors or the President.
Notwithstanding any other provision of these bylaws, the corporation shall
call a special meeting of shareholders in the event that the holders of at
least 10% of all of the votes entitled to be cast on any issue proposed to
be considered at the proposed special meeting sign, date and deliver to
the corporation one or more written demands for the meeting describing one
or more purposes for which it is to be held. The corporation shall give
notice of such a special meeting within thirty days after the date that
the demand is delivered to the corporation.
(b) Whenever ten or more shareholders of record who have been
such for at least six months preceding the date of application, and who
hold in the aggregate either shares having a net asset value of at least
$25,000 or at least one percent (1%) of the total outstanding shares,
whichever is less, shall apply to the corporation's Secretary in writing,
stating that they wish to communicate with other shareholders with a view
to obtaining signatures to a request for a meeting pursuant to subsection
(a) above and accompanied by a form of communication and request which
they wish to transmit, the Secretary shall within five business days after
receipt of such application either (1) afford to such applicants access to
a list of the names and addresses of all shareholders as recorded on the
books of the corporation; or (2) inform such applicants as to the
approximate number of shareholders of record and the approximate cost of
mailing to them the proposed communication and form of request.
(c) If the secretary elects to follow the course specified in
clause (2) of subsection (b) above, the Secretary, upon the written
request of such applicants, accompanied by a tender of the material to be
mailed and of the reasonable expenses of mailing, shall, with reasonable
promptness, mail such material to all shareholders of record as of a date
selected by the corporation at their addresses as recorded on the books,
unless within five business days after such tender the Secretary shall
mail to such applicants and file with the Securities and Exchange
Commission, together with a copy of the material to be mailed, a written
statement signed by at least a majority of the Board of Directors to the
effect that in their opinion either such material contains untrue
statements of fact or omits to state facts necessary to make the
statements contained therein not misleading, or would be in violation of
applicable law, and specifying the basis of such opinion.
(d) After opportunity for hearing upon the objections specified
in the written statement so filed, the Securities and Exchange Commission
may, and if demanded by the board of directors or by such applicants
shall, enter an order either sustaining one or more of such objections or
refusing to sustain any of them. If the Securities and Exchange
Commission shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of
such objections, the Securities and Exchange Commission shall find, after
notice and opportunity for hearing, that all objections so sustained have
been met, and shall enter an order so declaring, the secretary shall mail
copies of such material to all shareholders with reasonable promptness
after the entry of such order and the renewal of such tender.
2.03. Place of Meeting. The Board of Directors may designate
any place, either within or without the State of Wisconsin, as the place
of meeting for any annual or special meeting of shareholders. If no
designation is made, the place of meeting shall be the principal office of
the corporation. Any meeting may be adjourned to reconvene at any place
designated by vote of a majority of the shares represented thereat.
2.04. Notice of Meeting. Written notice stating the date, time
and place of any meeting of shareholders and, in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten days nor more than sixty days before the date
of the meeting (unless a different time is provided by applicable law or
regulation or the articles of incorporation), either personally or by
mail, by or at the direction of the President or the Secretary, to each
shareholder of record entitled to vote at such meeting and to such other
persons as required by the Wisconsin Business Corporation Law. If mailed,
such notice shall be deemed to be effective when deposited in the United
States mail, addressed to the shareholder at his or her address as it
appears on the stock record books of the corporation, with postage thereon
prepaid. If an annual or special meeting of shareholders is adjourned to
a different date, time or place, the corporation shall not be required to
give notice of the new date, time or place if the new date, time or place
is announced at the meeting before adjournment; provided, however, that if
a new record date for an adjourned meeting is or must be fixed, the
corporation shall give notice of the adjourned meeting to persons who are
shareholders as of the new record date.
2.05. Waiver of Notice. A shareholder may waive any notice
required by the Wisconsin Business Corporation Law, the articles of
incorporation or these bylaws before or after the date and time stated in
the notice. The waiver shall be in writing and signed by the shareholder
entitled to the notice, contain the same information that would have been
required in the notice under applicable provisions of the Wisconsin
Business Corporation Law (except that the time and place of meeting need
not be stated) and be delivered to the corporation for inclusion in the
corporate records. A shareholder's attendance at a meeting, in person or
by proxy, waives objection to all of the following: (a) lack of notice or
defective notice of the meeting, unless the shareholder at the beginning
of the meeting or promptly upon arrival objects to holding the meeting or
transacting business at the meeting; and (b) consideration of a particular
matter at the meeting that is not within the purpose described in the
meeting notice, unless the shareholder objects to considering the matter
when it is presented.
2.06. Fixing of Record Date. The Board of Directors may fix in
advance a date as the record date for the purpose of determining
shareholders entitled to notice of and to vote at any meeting of
shareholders, shareholders entitled to demand a special meeting as
contemplated by Section 2.02 hereof, shareholders entitled to take any
other action, or shareholders for any other purpose. Such record date
shall not be more than seventy days prior to the date on which the
particular action requiring such determination of shareholders is to be
taken. If no record date is fixed by the Board of Directors or by the
Wisconsin Business Corporation Law for the determination of shareholders
entitled to notice of and to vote at a meeting of shareholders, the record
date shall be the close of business on the day before the first notice is
given to shareholders. If no record date is fixed by the Board of
Directors or by the Wisconsin Business Corporation Law for the
determination of shareholders entitled to demand a special meeting as
contemplated in Section 2.02 hereof, the record date shall be the date
that the first shareholder signs the demand. Except as provided by the
Wisconsin Business Corporation Law for a court-ordered adjournment, a
determination of shareholders entitled to notice of and to vote at a
meeting of shareholders is effective for any adjournment of such meeting
unless the Board of Directors fixes a new record date, which it shall do
if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting. The record date for determining
shareholders entitled to a distribution (other than a distribution
involving a purchase, redemption or other acquisition of the corporation's
shares) or a share dividend is the date on which the Board of Directors
authorized the distribution or share dividend, as the case may be, unless
the Board of Directors fixes a different record date.
2.07. Shareholders' List for Meetings. After a record date for
a special or annual meeting of shareholders has been fixed, the
corporation shall prepare a list of the names of all of the shareholders
entitled to notice of the meeting. The list shall be arranged by class or
series of shares, if any, and show the address of and number of shares
held by each shareholder. Such list shall be available for inspection by
any shareholder, beginning two business days after notice of the meeting
is given for which the list was prepared and continuing to the date of the
meeting, at the corporation's principal office or at a place identified in
the meeting notice in the city where the meeting will be held. A
shareholder or his or her agent may, on written demand, inspect and,
subject to the limitations imposed by the Wisconsin Business Corporation
Law, copy the list, during regular business hours and at his or her
expense, during the period that it is available for inspection pursuant to
this Section 2.07. The corporation shall make the shareholders' list
available at the meeting and any shareholder or his or her agent or
attorney may inspect the list at any time during the meeting or any
adjournment thereof. Refusal or failure to prepare or make available the
shareholders' list shall not affect the validity of any action taken at a
meeting of shareholders.
2.08. Quorum and Voting Requirements. Shares entitled to vote
as a separate voting group may take action on a matter at a meeting only
if a quorum of those shares exists with respect to that matter. If the
corporation has only one class of common stock outstanding, such class
shall constitute a separate voting group for purposes of this Section
2.08. Except as otherwise provided in the articles of incorporation or
the Wisconsin Business Corporation Law, a majority of the votes entitled
to be cast on the matter shall constitute a quorum of the voting group for
action on that matter. Once a share is represented for any purpose at a
meeting, other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes
of determining whether a quorum exists for the remainder of the meeting
and for any adjournment of that meeting unless a new record date is or
must be set for the adjourned meeting. If a quorum exists, except in the
case of the election of directors, action on a matter shall be approved if
the votes cast within the voting group favoring the action exceed the
votes cast opposing the action, unless the articles of incorporation, the
Wisconsin Business Corporation Law, the Investment Company Act of 1940 or
any other applicable law or regulation requires a greater number of
affirmative votes. Unless otherwise provided in the articles of
incorporation, each director shall be elected by a plurality of the votes
cast by the shares entitled to vote in the election of directors at a
meeting at which a quorum is present. Though less than a quorum of the
outstanding votes of a voting group are represented at a meeting, a
majority of the votes so represented may adjourn the meeting from time to
time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
2.09. Conduct of Meeting. The President, and in his or her
absence, a Vice President in the order provided by Section 4.07 hereof,
and in their absence, any person chosen by the shareholders, shall call
the meeting of the shareholders to order and shall act as chairman of the
meeting, and the Secretary of the corporation or any other person
appointed by the chairman of the meeting, shall act as secretary of all
meetings of the shareholders.
2.10. Proxies. At all meetings of shareholders, a shareholder
may vote his or her shares in person or by proxy. A shareholder may
appoint a proxy to vote or otherwise act for the shareholder by signing an
appointment form, either personally or by his or her attorney-in-fact. An
appointment of a proxy is effective when received by the Secretary or
other officer or agent of the corporation authorized to tabulate votes.
An appointment is valid for eleven months from the date of its signing
unless a different period is expressly provided in the appointment form.
2.11. Voting of Shares. Except as provided in the articles of
incorporation, the Wisconsin Business Corporation Law, the Investment
Company Act of 1940 or other applicable law or regulation, each
outstanding share, regardless of class, is entitled to one vote on each
matter voted on at a meeting of shareholders.
2.12. Action without Meeting. Any action required or permitted
by the articles of incorporation or these bylaws or any provision of the
Wisconsin Business Corporation Law to be taken at a meeting of the
shareholders may be taken without a meeting and without action by the
Board of Directors if a written consent or consents, describing the action
so taken, is signed by all of the shareholders entitled to vote with
respect to the subject matter thereof and delivered to the corporation for
inclusion in the corporate records.
2.13. Acceptance of Instruments Showing Shareholder Action. If
the name signed on a vote, consent, waiver or proxy appointment
corresponds to the name of a shareholder, the corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment and
give it effect as the act of a shareholder. If the name signed on a vote,
consent, waiver or proxy appointment does not correspond to the name of a
shareholder, the corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act
of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed
purports to be that of an officer or agent of the entity.
(b) The name purports to be that of a personal
representative, administrator, executor, guardian or conservator
representing the shareholder and, if the corporation requests,
evidence of fiduciary status acceptable to the corporation is
presented with respect to the vote, consent, waiver or proxy
appointment.
(c) The name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation
requests, evidence of this status acceptable to the corporation
is presented with respect to the vote, consent, waiver or proxy
appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if
the corporation requests, evidence acceptable to the corporation
of the signatory's authority to sign for the shareholder is
presented with respect to the vote, consent, waiver or proxy
appointment.
(e) Two or more persons are the shareholders as co-tenants
or fiduciaries and the name signed purports to be the name of at
least one of the co-owners and the person signing appears to be
acting on behalf of all co-owners.
The corporation may reject a vote, consent, waiver or proxy appointment if
the Secretary or other officer or agent of the corporation who is
authorized to tabulate votes, acting in good faith, has reasonable basis
for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. All corporate powers shall be
exercised by or under the authority of, and the business and affairs of
the corporation managed under the direction of, the Board of Directors.
The number of directors of the corporation shall be five.
3.02. Tenure and Qualifications. Each director shall hold
office until the next annual meeting of shareholders and until his or her
successor shall have been elected and, if necessary, qualified, or until
there is a decrease in the number of directors which takes effect after
the expiration of his or her term, or until his or her prior death,
resignation or removal. A director may be removed by the shareholders
only at a meeting called for the purpose of removing the director, and the
meeting notice shall state that the purpose, or one of the purposes, of
the meeting is removal of the director. A director may be removed from
office with or without cause if the votes cast to remove the director
exceeds the number of votes cast not to remove such director. A director
may resign at any time by delivering written notice which complies with
the Wisconsin Business Corporation Law to the Board of Directors, to the
President (in his or her capacity as chairperson of the Board of
Directors) or to the corporation. A director's resignation is effective
when the notice is delivered unless the notice specifies a later effective
date. Directors need not be residents of the State of Wisconsin or
shareholders of the corporation but must be eligible to serve as a
director of a registered investment company under the Investment Company
Act of 1940.
3.03. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw immediately
before or after the annual meeting of shareholders and each adjourned
session thereof. The place of such regular meeting shall be the same as
the place of the meeting of shareholders which precedes or follows it, as
the case may be, or such other suitable place as may be announced at such
meeting of shareholders. The Board of Directors shall provide, by
resolution, the date, time and place, either within or without the State
of Wisconsin, for the holding of additional regular meetings of the Board
of Directors without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the President, Secretary
or any two directors. The President or Secretary may fix any place,
either within or without the State of Wisconsin, as the place for holding
any special meeting of the Board of Directors, and if no other place is
fixed the place of the meeting shall be the principal business office of
the corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each special meeting of the
Board of Directors shall be given orally in person or by telephone or by
written notice delivered in person, by telegraph, teletype, facsimile or
other form of wire or wireless communication, or by mail or private
carrier, to each director at his business address or at such other address
as such director shall have designated in writing filed with the
Secretary, in each case not less than forty-eight hours prior to the
meeting. The notice need not prescribe the purpose of the special meeting
of the Board of Directors or the business to be transacted at such
meeting. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice is given by telegram, such notice shall be deemed to
be effective when the telegram is delivered to the telegraph company. If
notice is given by private carrier, such notice shall be deemed to be
effective when delivered to the private carrier. Whenever any notice
whatever is required to be given to any director of the corporation under
the articles of incorporation or these bylaws or any provision of the
Wisconsin Business Corporation Law or other applicable law or regulation,
a waiver thereof in writing, signed at any time, whether before or after
the date and time of meeting, by the director entitled to such notice
shall be deemed equivalent to the giving of such notice. The corporation
shall retain any such waiver as part of the permanent corporate records.
A director's attendance at or participation in a meeting waives any
required notice to him or her of the meeting unless the director at the
beginning of the meeting or promptly upon his or her arrival objects to
holding the meeting or transacting business at the meeting and does not
thereafter vote for or assent to action taken at the meeting.
3.06. Quorum. Except as otherwise provided by the Wisconsin
Business Corporation Law or by the articles of incorporation or these
bylaws, a majority of the number of directors specified in Section 3.01 of
these bylaws shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors. Except as otherwise provided by
the Wisconsin Business Corporation Law or by the articles of incorporation
or these bylaws, a quorum of any committee of the Board of Directors
created pursuant to Section 3.12 hereof shall consist of a majority of the
number of directors appointed to serve on the committee. A majority of
the directors present (though less than such quorum) may adjourn any
meeting of the Board of Directors or any committee thereof, as the case
may be, from time to time without further notice.
3.07. Manner of Acting. The affirmative vote of a majority of
the directors present at a meeting of the Board of Directors at which a
quorum is present shall be the act of the Board of Directors, unless the
Wisconsin Business Corporation Law, the Investment Company Act of 1940 or
other applicable law or regulation, the articles of incorporation or these
bylaws require the vote of a greater number of directors.
3.08. Conduct of Meetings. The President, and in his or her
absence, a Vice President in the order provided under Section 4.07, and in
their absence, any director chosen by the directors present, shall call
meetings of the Board of Directors to order and shall act as chairman of
the meeting. The Secretary of the corporation shall act as secretary of
all meetings of the Board of Directors unless the presiding officer
appoints another person present to act as secretary of the meeting.
Minutes of any regular or special meeting of the Board of Directors shall
be prepared and distributed to each director.
3.09. Vacancies. Except as provided below, any vacancy
occurring in the Board of Directors, including a vacancy resulting from an
increase in the number of directors, may be filled by any of the
following: (a) the shareholders; or (b) the Board of Directors, if
immediately after filling any such vacancy at least two-thirds of the
directors then holding office shall have been elected to such office at an
annual or special meeting of shareholders. A vacancy that will occur at a
specific later date, because of a resignation effective at a later date or
otherwise, may be filled before the vacancy occurs, but the new director
may not take office until the vacancy occurs. If by reason of the death,
disqualification or bona fide resignation of any director or directors,
there is no member of the Board of Directors who is not an affiliated
person of the investment adviser of the corporation, as defined in the
Investment Company Act of 1940, such vacancy shall be filled within thirty
days if it may be filled by the Board of Directors, or within sixty days
if a vote of shareholders is required to fill such a vacancy; provided
that such vacancy may be filled within such longer period as the
Securities and Exchange Commission may prescribe by rules and regulations,
upon its own motion or by order upon application. In the event that at
any time less than a majority of the directors were elected by the
shareholders, the Board of Directors or the President shall forthwith
cause to be held as promptly as possible, and in any event within sixty
days, a meeting of the shareholders for the purpose of electing directors
to fill any existing vacancies in the Board of Directors, unless the
Securities and Exchange Commission shall by order extend such period.
3.10. Compensation. No director shall receive any stated
salary or fees from the corporation for his services as such if such
director is, otherwise than by reason of being such director, an
interested person (as such term is defined by the Investment Company Act
of 1940) of the corporation's investment adviser. Except as provided in
the preceding sentence, the Board of Directors, irrespective of any
personal interest of its members, may establish reasonable compensation of
all directors for service to the corporation as directors, officers or
otherwise, or may delegate such authority to an appropriate committee.
3.11. Presumption of Assent. A director who is present and is
announced as present at a meeting of the Board of Directors, when
corporate action is taken, assents to the action taken unless any of the
following occurs: (a) the director objects at the beginning of the
meeting or promptly upon his or her arrival to holding the meeting or
transacting business at the meeting; (b) the director's dissent or
abstention from the action taken is entered in the minutes of the meeting;
or (c) the director delivers written notice that complies with the
Wisconsin Business Corporation Law of his or her dissent or abstention to
the presiding officer of the meeting before its adjournment or to the
corporation immediately after adjournment of the meeting. Such right of
dissent or abstention shall not apply to a director who votes in favor of
the action taken.
3.12. Committees. The Board of Directors by resolution adopted
by the affirmative vote of a majority of all of the directors then in
office may create one or more committees, appoint members of the Board of
Directors to serve on the committees and designate other members of the
Board of Directors to serve as alternates. Each committee shall have two
or more members who shall, unless otherwise provided by the Board of
Directors, serve at the pleasure of the Board of Directors. A committee
may be authorized to exercise the authority of the Board of Directors,
except that a committee may not do any of the following: (a) authorize
distributions; (b) approve or propose to shareholders action that the
Wisconsin Business Corporation Law requires to be approved by
shareholders; (c) fill vacancies on the Board of Directors or, unless the
Board of Directors provides by resolution that vacancies on a committee
shall be filled by the affirmative vote of the remaining committee
members, on any Board committee; (d) amend the corporation's articles of
incorporation; (e) adopt, amend or repeal bylaws; (f) approve a plan of
merger not requiring shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method
prescribed by the Board of Directors; (h) authorize or approve the
issuance or sale or contract for sale of shares, or determine the
designation and relative rights, preferences and limitations of a class or
series of shares, except that the Board of Directors may authorize a
committee to do so within limits prescribed by the Board of Directors; or
(i) take any action required by the Investment Company Act of 1940 to be
taken by the independent directors of the corporation or by the full Board
of Directors. Unless otherwise provided by the Board of Directors in
creating the committee, a committee may employ counsel, accountants and
other consultants to assist it in the exercise of its authority.
3.13. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or these
bylaws, members of the Board of Directors may participate in regular or
special meetings by, or through the use of, any means of communication by
which all participants may simultaneously hear each other, such as by
conference telephone. If a meeting is conducted by such means, then at
the commencement of such meeting the presiding officer shall inform the
participating directors that a meeting is taking place at which official
business may be transacted. Any participant in a meeting by such means
shall be deemed present in person at such meeting. If action is to be
taken at any meeting held by such means on any of the following: (a) a
plan of merger or share exchange; (b) a sale, lease, exchange or other
disposition of substantial property or assets of the corporation; (c) a
voluntary dissolution or the revocation of voluntary dissolution
proceedings; or (d) a filing for bankruptcy, then the identity of each
director participating in such meeting must be verified by the disclosure
at such meeting by each such director of each such director's social
security number to the secretary of the meeting before a vote may be taken
on any of the foregoing matters. For purposes of the preceding clause
(b), the phrase "sale, lease, exchange or other disposition of substantial
property or assets" shall mean any sale, lease, exchange or other
disposition of property or assets of the corporation having a net book
value equal to 10% or more of the net book value of the total assets of
the corporation on and as of the close of the fiscal year last ended prior
to the date of such meeting and as to which financial statements of the
corporation have been prepared. Notwithstanding the foregoing, no action
may be taken at any meeting held by such means (i) on any particular
matter which the presiding officer determines, in his or her sole
discretion, to be inappropriate under the circumstances for action at a
meeting held by such means (such determination shall be made and announced
in advance of such meeting), or (ii) if the purpose of the meeting is to
approve the corporation's investment advisory agreement and/or to approve
the selection of the corporation's auditors, or if participation in such a
manner would otherwise violate or not be consistent with the requirements
of the Investment Company Act of 1940 or other applicable laws.
3.14. Action Without Meeting. Any action required or permitted
by the Wisconsin Business Corporation Law to be taken at a meeting of the
Board of Directors may be taken without a meeting if the action is taken
by all members of the Board. The action shall be evidenced by one or more
written consents describing the action taken, signed by each director or
committee member and retained by the corporation. Such action shall be
effective when the last director signs the consent, unless the consent
specifies a different effective date. Notwithstanding this Section 3.14,
no action may be taken by the Board of Directors pursuant to a written
consent with respect to the approval of the corporation's investment
advisory agreement, the approval of the selection of the corporation's
auditors, or any action required by the Investment Company Act of 1940 or
other applicable law to be taken at a meeting of the Board of Directors to
be held in person.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall
be a President, the number of Vice Presidents as authorized from time to
time by the Board of Directors, a Secretary, and a Treasurer, each of whom
shall be elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or appointed
by the Board of Directors. The Board of Directors may also authorize any
duly authorized officer to appoint one or more officers or assistant
officers. Any two or more offices may be held by the same person.
4.02. Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as is practicable. Each officer shall
hold office until his or her successor shall have been duly elected or
until his or her prior death, resignation or removal.
4.03. Removal. The Board of Directors may remove any officer
and, unless restricted by the Board of Directors or these bylaws, an
officer may remove any officer or assistant officer appointed by that
officer, at any time, with or without cause and notwithstanding the
contract rights, if any, of the officer removed. The appointment of an
officer does not of itself create contract rights.
4.04. Resignation. An officer may resign at any time by
delivering notice to the corporation that complies with the Wisconsin
Business Corporation Law. The resignation shall be effective when the
notice is delivered, unless the notice specifies a later effective date
and the corporation accepts the later effective date.
4.05. Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be
filled by the Board of Directors for the unexpired portion of the term.
If a resignation of an officer is effective at a later date as
contemplated by Section 4.04 hereof, the Board of Directors may fill the
pending vacancy before the effective date if the Board provides that the
successor may not take office until the effective date.
4.06. President. The President shall be the principal
executive officer of the corporation and, subject to the direction of the
Board of Directors, shall in general supervise and control all of the
business and affairs of the corporation. The President shall, when
present, preside at all meetings of the shareholders and of the Board of
Directors. He or she shall have authority, subject to such rules as may
be prescribed by the Board of Directors, to appoint such agents and
employees of the corporation as he or she shall deem necessary, to
prescribe their powers, duties and compensation, and to delegate authority
to them. Such agents and employees shall hold office at the discretion of
the President. He or she shall have authority to sign, execute and
acknowledge, on behalf of the corporation, all deeds, mortgages, bonds,
stock certificates, contracts, leases, reports and all other documents or
instruments necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by resolution
of the Board of Directors; and, except as otherwise provided by law or the
Board of Directors, he or she may authorize any Vice President or other
officer or agent of the corporation to sign, execute and acknowledge such
documents or instruments in his or her place and stead. In general he or
she shall perform all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors from time to
time.
4.07. The Vice Presidents. In the absence of the President or
in the event of the President's death, inability or refusal to act, or in
the event for any reason it shall be impracticable for the President to
act personally, the Vice President (or in the event there be more than one
Vice President, the Vice Presidents in the order designated by the Board
of Directors, or in the absence of any designation, then in the order of
their election) shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the
restrictions upon the President. Any Vice President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties and have such authority
as from time to time may be delegated or assigned to him or her by the
President or by the Board of Directors. The execution of any instrument
of the corporation by any Vice President shall be conclusive evidence, as
to third parties, of his or her authority to act in the stead of the
President.
4.08. The Secretary. The Secretary shall: (a) keep minutes of
the meetings of the shareholders and of the Board of Directors (and of
committees thereof) in one or more books provided for that purpose
(including records of actions taken by the shareholders or the Board of
Directors (or committees thereof) without a meeting); (b) see that all
notices are duly given in accordance with the provisions of these bylaws
or as required by the Wisconsin Business Corporation Law; (c) be custodian
of the corporate records and of the seal of the corporation and see that
the seal of the corporation is affixed to all documents the execution of
which on behalf of the corporation under its seal is duly authorized; (d)
maintain a record of the shareholders of the corporation, in a form that
permits preparation of a list of the names and addresses of all
shareholders, by class or series of shares and showing the number and
class or series of shares held by each shareholder; (e) sign with the
President, or a Vice President, certificates for shares of the
corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general perform all duties
incident to the office of Secretary and have such other duties and
exercise such authority as from time to time may be delegated or assigned
by the President or by the Board of Directors.
4.09. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) maintain appropriate accounting records; (c) receive and
give receipts for moneys due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the
corporation in such banks, trust companies or other depositaries as shall
be selected in accordance with the provisions of Sections 9.08 and 9.09;
and (d) in general perform all of the duties incident to the office of
Treasurer and have such other duties and exercise such other authority as
from time to time may be delegated or assigned by the President or by the
Board of Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his or her duties in such
sum and with such surety or sureties as the Board of Directors shall
determine.
4.10. Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as
the Board of Directors may from time to time authorize. The Assistant
Secretaries may sign with the President or a Vice President certificates
for shares of the corporation the issuance of which shall have been
authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such
duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
4.11. Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint, or to authorize any duly
appointed officer of the corporation to appoint, any person to act as
assistant to any officer, or as agent for the corporation in his or her
stead, or to perform the duties of such officer whenever for any reason it
is impracticable for such officer to act personally, and such assistant or
acting officer or other agent so appointed by the Board of Directors or an
authorized officer shall have the power to perform all the duties of the
office to which he or she is so appointed to be an assistant, or as to
which he or she is so appointed to act, except as such power may be
otherwise defined or restricted by the Board of Directors or the
appointing officer.
ARTICLE V. CERTIFICATES FOR SHARES; TRANSFER OF SHARES
5.01. Certificates for Shares. Unless and to the extent that
the Board of Directors requires the issuance of shares without
certificates, each shareholder shall be entitled upon request to have a
certificate or certificates which shall represent and certify the number
and kind of shares owned by him or her in the corporation. Certificates
representing shares of the corporation shall be in such form, consistent
with the Wisconsin Business Corporation Law, as shall be determined by the
Board of Directors. Such certificates shall be signed by the President or
a Vice President and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the corporation.
All certificates surrendered to the corporation for transfer shall be
cancelled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled, except as provided in Section 5.05. The corporation shall
deliver to shareholders not requesting certificates statements containing
the information required by Section 408.408 of the Wisconsin Statutes.
Such statements confer no rights on shareholders and are neither
negotiable instruments nor securities.
5.02. Facsimile Signatures and Seal. The seal of the
corporation, if any, on any certificates for shares may be a facsimile.
The signature of the President or Vice President and the Secretary or
Assistant Secretary upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent, or a
registrar, other than the corporation itself.
5.03. Signature by Former Officers. The validity of a share
certificate is not affected if a person who signed the certificate (either
manually or in facsimile) no longer holds office when the certificate is
issued.
5.04. Transfer of Shares. Prior to due presentment of a
certificate for shares for redemption or registration of transfer the
corporation may treat the registered owner of such shares as the person
exclusively entitled to vote, to receive notifications and otherwise to
have and exercise all the rights and power of an owner. Except as
provided in Section 408.207(3)(4) and (6) of the Wisconsin Statutes
relating to registered pledges, the corporation may treat the registered
owner of uncertificated shares as the person exclusively entitled to vote,
to receive notifications, and otherwise to exercise all the rights and
powers of an owner. Where a certificate for shares is presented to the
corporation with a request for redemption or to register for transfer, the
corporation shall not be liable to the owner or any other person suffering
loss as a result of such registration of transfer or redemption if (a)
there were on or with the certificate the necessary endorsements, and (b)
the corporation had no duty to inquire into adverse claims or has
discharged any such duty. The corporation may require reasonable
assurance that such endorsements are genuine and effective and compliance
with such other regulations as may be prescribed by or under the authority
of the Board of Directors. The corporation shall not be liable to the
owner, pledgee or any other person suffering loss as a result of the
registration of a transfer, pledge or release of uncertificated shares if
the corporation had no duty to inquire into adverse claims or has
discharged any such duty. Transfer or redemption of shares of stock of
the corporation shall be made only on the stock transfer books of the
corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto duly authorized by power of
attorney duly executed and filed with the transfer agent or the Secretary
of the corporation, and on surrender for cancellation of the certificate
for such shares, if any.
5.05. Lost, Destroyed or Stolen Certificates. Where the owner
claims that certificates for shares have been lost, destroyed or
wrongfully taken, a new certificate shall be issued in place thereof if
the owner (a) so requests before the corporation has notice that such
shares have been acquired by a bona fide purchaser, (b) files with the
corporation a sufficient indemnity bond if required by the Board of
Directors or any principal officer, and (c) satisfies such other
reasonable requirements as may be prescribed by or under the authority of
the Board of Directors.
5.06. Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with law as it may deem expedient concerning the issue,
transfer and registration of shares of the corporation.
ARTICLE VI. SEAL
6.01. The Board of Directors may provide for a corporate seal
for the corporation.
ARTICLE VII. INDEMNIFICATION
7.01. Provision of Indemnification. The corporation shall
indemnify all of its corporate representatives against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually
and reasonably incurred by them in connection with the defense of any
action, suit or proceeding, or threat or claim of such action, suit or
proceeding, whether civil, criminal, administrative, or legislative, no
matter by whom brought, or in any appeal in which they or any of them are
made parties or a party by reason of being or having been a corporate
representative, if the corporate representative acted in good faith and in
a manner reasonably believed to be in or not opposed to the best interests
of the corporation and with respect to any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful provided that the
corporation shall not indemnify corporate representatives in relation to
matters as to which any such corporate representative shall be adjudged in
such action, suit or proceeding to be liable for gross negligence, willful
misfeasance, bad faith, reckless disregard of the duties and obligations
involved in the conduct of his office, or when indemnification is
otherwise not permitted by the Wisconsin Business Corporation Law.
7.02. Determination of Right to Indemnification. In the
absence of an adjudication which expressly absolves the corporate
representative, or in the event of a settlement, each corporate
representative shall be indemnified hereunder only if a determination that
indemnification of the corporate representative is proper because he has
met the applicable standard of conduct set forth in Section 7.01. Such
determination shall be made: (i) by the Board of Directors, by a majority
vote of a quorum which consists of directors who were not parties to the
action, suit or proceeding; or (ii) if the required quorum is not
obtainable or if a quorum of disinterested directors so direct, by
independent legal counsel in a written opinion. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person was guilty of willful misfeasance,
bad faith, gross negligence or reckless disregard to the duties and
obligations involved in the conduct of his or her office, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his or her conduct was unlawful.
7.03. Allowance of Expenses. Expenses, including attorneys'
fees, incurred in the preparation of and/or presentation of the defense of
a civil or criminal action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in Sections 180.0853 or
180.0856 of the Wisconsin Business Corporation Law upon receipt of an
undertaking by or on behalf of the corporate representative, secured by a
surety bond or other similar insurance paid for by such corporate
representative, to repay such amount unless it shall ultimately be
determined that he or she is entitled to be indemnified by the corporation
as authorized in this bylaw.
7.04. Additional Rights to Indemnification. The
indemnification provided by this bylaw shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under these
bylaws, any agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to
action in another capacity while holding such office, and shall continue
as to a person who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and administrators
of such a person subject to the limitations imposed from time to time by
the Investment Company Act of 1940, as amended.
7.05. Insurance. This corporation shall have power to purchase
and maintain insurance on behalf of any corporate representative against
any liability asserted against him or her and incurred by him or her in
such capacity or arising out of his or her status as such, whether or not
the corporation would have the power to indemnify him or her against such
liability under this bylaw provided that no insurance may be purchased or
maintained to protect any corporate representative against liability for
gross negligence, willful misfeasance, bad faith or reckless disregard of
the duties and obligations involved in the conduct of his or her office.
7.06. Definitions. "Corporate Representative" means an
individual who is or was a director, officer, agent or employee of the
corporation or who serves or served another corporation, partnership,
joint venture, trust or other enterprise in one of these capacities at the
request of the corporation and who, by reason of his or her position, is,
was or is threatened to be made a party to a proceeding described herein.
ARTICLE VIII. AMENDMENTS
8.01. Amendments by Shareholders and Directors. The Board of
Directors shall have the power to alter or repeal any bylaws of the
corporation and to make new bylaws, except that the Board of Directors
shall not alter or repeal any bylaw made by the shareholders and, after
capital stock of the corporation is issued, shall not alter or repeal
Sections 7.01 through 7.06 of Article VII, Section 8.01 of Article VIII
and Sections 9.01 through 9.12 of Article IX. The shareholders shall have
the power at any meeting, if notice thereof be included in the notice of
such meeting, to alter or repeal any bylaws of the corporation and to make
new bylaws by vote of a majority of the shares entitled to vote at such
meeting, as the term "majority" is defined in the Investment Company Act
of 1940, as amended from time to time.
8.02. Implied Amendments. Any action taken or authorized by
the shareholders or by the Board of Directors which would be inconsistent
with the bylaws then in effect but which is taken or authorized by
affirmative vote of not less than the number of shares or the number of
directors required to amend the bylaws so that the bylaws would be
consistent with such action shall be given the same effect as though the
bylaws had been temporarily amended or suspended so far, but only so far,
as is necessary to permit the specific action so taken or authorized.
ARTICLE IX. MISCELLANEOUS
9.01. Bonding. Each officer and employee of the corporation
who singly or jointly with others has access to securities or funds of the
corporation, either directly or through authority to draw upon such funds
or to direct generally the disposition of such securities shall be bonded
against larceny and embezzlement by a reputable fidelity insurance company
authorized to do business in Wisconsin. Each such bond, which may be in
the form of an individual bond, a schedule or blanket bond covering the
corporation's officers and employees and the officers and employees of the
investment adviser to the corporation and other corporations to which said
investment adviser also acts as investment adviser, shall be in such form
and for such amount (determined at least annually) as the Board of
Directors shall determine in compliance with the requirements of Section
17(g) of the Investment Company Act of 1940, as amended from time to time,
and the rules, regulations or orders of the Securities and Exchange
Commission thereunder.
9.02. Compensation and Profit from Purchase and Sales. No
affiliated person of the corporation, as defined in the Investment Company
Act of 1940, or affiliated person of such person, shall, except as
permitted by Section 17(e) of the Investment Company Act of 1940, or the
rules, regulations or orders of the Securities and Exchange Commission
thereunder, (i) acting as agent, accept from any source any compensation
for the purchase or sale of any property or securities to or for the
corporation or any controlled company of the corporation, as defined in
the Investment Company Act of 1940, or (ii) acting as a broker, in
connection with the sale of securities to or by the corporation or any
controlled company of the corporation, receive from any source a
commission, fee or other remuneration for effecting such transaction. The
investment adviser to the corporation shall not profit directly or
indirectly from sales of securities to or from the corporation.
9.03. Transactions with Affiliated Person. No affiliated
person of the corporation, as defined in the Investment Company Act of
1940, or affiliated person of such person shall knowingly (i) sell any
security or other property to the corporation or to any company controlled
by the corporation, as defined in the Investment Company Act of 1940,
except shares of stock of the corporation or securities of which such
person is the issuer and which are part of a general offering to the
holders of a class of its securities, (ii) purchase from the corporation
or any such controlled company any security or property except shares of
stock of the corporation or securities of which such person is the issuer,
(iii) borrow money or other property from the corporation or any such
controlled company, or (iv) acting as a principal effect any transaction
in which the corporation or controlled company is a joint or joint and
several participant with such person; provided, however, that this section
shall not apply to any transaction permitted by Sections 17(a), (b), (c),
(d) or 21(b) of the Investment Company Act of 1940 or the rules,
regulations or orders of the Securities and Exchange Commission
thereunder.
9.04. Portfolio Transactions. The corporation shall not
purchase, acquire or retain:
(a) any security of an issuer, any of whose officers or
directors is an officer, director, or investment adviser of the
corporation or an affiliated person, as defined in the
Investment Company Act of 1940, of such investment adviser;
(b) any security issued by or any interest in the business
of an investment company, insurance company, broker, dealer,
underwriter or investment adviser, except as permitted under
Sections 12(d), (e) and (g) of the Investment Company Act of
1940, as amended from time to time, or the rules, regulations or
orders of the Securities and Exchange Commission thereunder;
(c) voting securities of another issuer, the acquisition or
retention of which would result in circular or cross ownership,
as defined in Section 20(c) of the Investment Company Act of
1940; or
(d) during the existence of any underwriting or selling
syndicate, any security, except stock of the corporation, a
principal underwriter of which is an officer, director,
investment adviser or employee of the corporation, or is a
person (other than a company of the character described in
Section 12(d)(3) (A) and (B) of the Investment Company Act of
1940, as amended from time to time) of which any such officer,
director, investment adviser or employee is an affiliated
person, as defined in the Investment Company Act of 1940, unless
in acquiring such security the corporation is itself acting as a
principal underwriter for the issue, except as the Securities
and Exchange Commission, by rules, regulations, or order shall
permit.
9.05. General Business and Investment Activities. The
corporation shall not:
(a) purchase any security on margin, except such short-term
credits as are necessary for the clearance of transactions;
(b) participate on a joint or joint and several basis in
any trading account in securities;
(c) effect a short sale of any security;
(d) act as an underwriter in the distribution of any
security other than stock of the corporation;
(e) make loans to other persons except through the purchase
of debt obligations permissible under Article III of the
articles of incorporation of this corporation and through
repurchase agreements provided that repurchase agreements
maturing in more than seven days will not exceed 10% of the
total net assets of this corporation;
(f) borrow money or issue senior securities except to the
extent permitted under Sections 18(f), (g) and (h) of the
Investment Company Act of 1940, as amended from time to time,
provided that the amount of money that may be borrowed shall not
exceed that which would be permitted under the margin
requirements of the Board of Governors of the Federal Reserve
System, in force at the time of borrowing, as specified in
Regulation T, or any amendment thereto;
(g) purchase or sell real estate or interests in real
estate or commodities;
(h) issue any warrant or right to subscribe to or purchase
stock of the corporation, except in the form of warrants or
rights to subscribe expiring not later than one hundred twenty
days after their issuance and issued exclusively and ratably to
its shareholders, or any voting trust certificate relating to
stock of the corporation;
(i) deviate from its policy in respect to concentration of
investments in any particular industry or group of industries as
reported in its registration statement under the Investment
Company Act of 1940, or deviate from any fundamental policy
recited in such registration statement pursuant to Section
8(b)(2) of the Investment Company Act of 1940;
(j) change the nature of its business so as to cease to be
an investment company;
(k) charge any sales load or commission in connection with
the sale or redemption of any stock of the corporation; provided
that the Board of Directors may impose a redemption charge in
such amount, with such limitations and at such times as the
Board of Directors in its discretion shall determine.
9.06. Preparation and Maintenance of Accounts, Records and
Statements. The President, a Vice President or the Treasurer shall
prepare or cause to be prepared annually, a full and correct statement of
the affairs of the corporation, including a balance sheet or statement of
financial condition and a financial statement of operations for the
preceding fiscal year, which shall be submitted at the annual meeting of
the shareholders and filed within twenty days thereafter at the principal
office of the corporation in the State of Wisconsin. The proper officers
of the corporation shall also prepare, maintain and preserve or cause to
be prepared, maintained and preserved the accounts, books and other
documents required by Section 31 of the Investment Company Act of 1940 and
shall prepare and file or cause to be prepared and filed the reports
required by Section 30 of such Act. No financial statement shall be filed
with the Securities and Exchange Commission unless the officers or
employees who prepared or participated in the preparation of such
financial statement have been specifically designated for such purpose by
the Board of Directors.
9.07. Auditors. No independent public accountant shall be
retained or employed by the corporation to examine, certify or report on
its financial statements for any fiscal year unless such selection: (i)
shall have been approved by a majority of the entire Board of Directors
within thirty days before or after the beginning of such fiscal year or
before the annual meeting of shareholders for such fiscal year; (ii) shall
have been ratified at the next succeeding annual meeting of shareholders,
provided that any vacancy occurring between annual meetings due to the
death or resignation of such accountant may be filled by the Board of
Directors; and (iii) shall otherwise meet the requirements of Section 32
of the Investment Company Act of 1940.
9.08. Custodian. All securities, evidences of indebtedness and
funds of the corporation shall be entrusted to the custody of one or more
custodians or depositaries, each of which shall be a bank or trust company
which is a member of the Federal Reserve System having capital, surplus
and undivided profits of not less than Two Million Dollars ($2,000,000),
as set forth in its most recently published report of condition, and the
qualifications prescribed by and pursuant to Section 17(f) and 26 of the
Investment Company Act of 1940 and which shall be employed as agent or
agents of the corporation by the Board of Directors.
9.09. Agreement with Custodian. Each such custodian shall be
employed pursuant to a written agreement which shall conform to the
requirements prescribed by any applicable rules and regulations of the
Securities and Exchange Commission under the Investment Company Act of
1940, and, except as otherwise provided by such rules and regulations,
shall provide substantially as follows:
(a) The custodian shall keep (i) all cash on deposit with
such other banks in the name of the custodian as the corporation
shall direct, and (ii) all securities in a separate account, not
commingled with other assets, in the name of the custodian, its
nominee or the corporation in care of the custodian, or in the
custody of the custodian or agents in street certificate or
bearer form. The custodian shall receive and collect the income
or funds due with respect to such securities.
(b) Securities and cash held by the custodian may be
withdrawn only upon written order signed on behalf of the
corporation by two employees at least one of whom shall be an
officer included within a list of five officers and employees
certified for such purpose by resolution of the Board of
Directors.
(c) Securities held by the custodian may be withdrawn only
for the following purposes:
(i) The sale of such securities for the
account of the corporation with delivery and payment
therefore in accord with procedures and customs used
by the custodian in the sale of securities for the
trust estates for which it is trustee;
(ii) The delivery of securities in exchange
for or conversion into other securities alone, cash or
cash and other securities pursuant to the provisions
of such securities or a plan of merger, consolidation,
reorganization, recapitalization or readjustment of
the securities of the issuer thereof;
(iii) The surrender of warrants, rights
or similar securities in the exercise of such
warrants, rights or similar securities or the
surrender of interim receipts or temporary securities
for definitive securities;
(iv) The delivery of securities to a lender
as collateral on borrowing effected by the corporation
or to a broker selling any such securities in
accordance with "street delivery" customs;
(v) The delivery of securities as a
redemption in kind of or distribution of stock of the
corporation or in connection with a retirement of such
securities;
(vi) The delivery of securities for other
proper corporate purposes;
provided that in each case specified in clauses (i), (iii) and
(iv) the payment, collateral or securities to be received are
delivered to the custodian simultaneously or as promptly
thereafter as possible.
(d) Cash held by the custodian may be withdrawn only for the
following purposes:
(i) The purchase of securities to be retained by the
custodian with delivery and payment therefor in accord with
procedures and customs used by the custodian in the purchase of
securities for the trust estates for which it is trustee;
(ii) The redemption or purchase of stock in the
corporation;
(iii) The payment of interest, dividends or other
distributions on stock of the corporation;
(iv) The payment of taxes, interest, the investment
adviser's fees incurred in connection with the operation of the
corporation and operating expenses (including, without limitation
thereto, fees for legal, accounting and auditing services);
(v) The payment in connection with the conversion,
exchange or surrender of securities owned by the corporation;
(vi) The deposit of funds in the name of the custodian in
or with any other bank or trust company designated by the
corporation;
(vii) Other proper corporate purposes as certified by
resolution of the Board of Directors.
9.10. Termination of Custodian Agreement. Any employment
agreement with a custodian shall be terminable on not more than sixty
days' notice in writing by the Board of Directors or the custodian and
upon any such termination the custodian shall turn over only to the
succeeding custodian designated by the Board of Directors all funds,
securities and property and documents of the corporation in its
possession.
9.11. Checks and Requisitions. Except as otherwise authorized
by the Board of Directors, all checks and drafts for the payment of money
shall be signed in the name of the corporation by a custodian, and all
requisitions or orders for the payment of money by a custodian or for the
issue of checks and drafts therefor, all promissory notes, all assignments
of stock or securities standing in the name of the corporation, and all
requisitions or orders for the assignment of stock or securities standing
in the name of a custodian or its nominee, or for the execution of powers
to transfer the same, shall be signed in the name of the corporation by
not less than two persons (who shall be among those persons, not in excess
of five, designated for this purpose by the Board of Directors) at least
one of which shall be an officer. Promissory notes, checks or drafts
payable to the corporation may be endorsed only to the order of a
custodian or its nominee by the Treasurer or President or by such other
person or persons as shall be thereto authorized by the Board of
Directors.
9.12. Dividends. Dividends upon the stock of the corporation,
subject to the provisions of the charter, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law.
The source of each dividend payment shall be disclosed to the shareholders
receiving such dividend, to the extent required by the laws of the State
of Wisconsin and by Section 19 of the Investment Company Act of 1940 and
the rules and regulations of the Securities and Exchange Commission
thereunder. The total of each dividend payment made to shareholders in
respect of any one fiscal year shall be approximately equal to the sum of
(a) the net income for such fiscal year exclusive of profits or losses
realized upon the sale of securities or other property, and (b) the excess
of profits over losses on sales of securities or other property for such
fiscal year; provided the above provision shall be interpreted to give the
Board of Directors the power in its discretion to distribute for any
fiscal year as ordinary dividends and as capital gains distributions,
respectively, amounts sufficient to enable the corporation to avoid or
reduce its tax liability.
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-
Effective Amendment No. 17 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated October 25, 1996, relating
to the financial statements and financial highlights appearing in the
September 30, 1996 Annual Report to Shareholders of Fiduciary Capital
Growth Fund, Inc., portions of which are incorporated by reference into
the Registration Statement. We also consent to the reference to us under
the heading "Independent Accountants" in such Statement of Additional
Information.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
January 29, 1997
Exhibit 14.3
FIDUCIARY FUNDS
SIMPLIFIED EMPLOYEE PENSION
INDIVIDUAL RETIREMENT ACCOUNTS CONTRIBUTION AGREEMENT
(Under Section 408(k) of the Internal Revenue Code)
____________________ makes the following agreement under the
(Business name -- employer)
terms of Section 408(k) of the Internal Revenue Code and the instructions
to this form.
The employer agrees to provide for discretionary contributions
in each calendar year to the Individual Retirement Accounts or Individual
Retirement Annuities (IRAs) of all eligible employees who are at least
______ years old (not over 21 years old) [see instruction "Who May
Participate"] and worked in at least ______ years (not over 1, 2 or 3
years) of the immediately preceding 5 years [see instruction "Who May
Participate"]. This [_] includes [_] does not include (check one)
employees covered under a collective bargaining agreement and [_] includes
[_] does not include (check one) employees whose total compensation during
the year is less than $363*.
_______
* This amount reflects the cost-of-living increase under Section
408(k)(8) effective 1-1-91. This amount is adjusted annually. Each
January, the IRS announces the increase, if any, in the Internal Revenue
Bulletin.
The employer agrees that contributions made on behalf of each
eligible employee will:
- Be made only on the first $222,220* of compensation.
- Be made in an amount that is the same percentage of
total compensation for every employee.
- Be limited to the smaller of $30,000 or 15% of
compensation.
- Be paid to the employee's IRA trustee, custodian, or
insurance company (for an annuity contract).
Signature of employer Date
By
<PAGE>
INSTRUCTIONS FOR EMPLOYER
Purpose of Form. Form 5305-SEP (Model SEP) is used by an
employer to make an agreement to provide benefits to all employees under a
Simplified Employee Pension Plan (SEP) described in Section 408(k) of the
Internal Revenue Code. This form is NOT to be filed with the IRS.
What is SEP? A SEP provides an employer with a simplified way
to make contributions toward an employee's retirement income. Under a
SEP, the employer is permitted to contribute a certain amount (see below)
to an employee's Individual Retirement Account or Individual Retirement
Annuity (IRAs). The employer makes contributions directly to an IRA set
up by an employee with a bank, insurance company, or other qualified
financial institution. When using this form to establish a SEP, the IRA
must be a Model IRA established on IRS form or a master or prototype IRA
for which the IRS has issued a favorable opinion letter. Making the
agreement on this Form 5305-SEP does not establish an employer IRA as
described under Section 408(c).
This form may not be used by an employer who:
1. Currently maintains any other qualified
retirement plan.
2. Has maintained in the past a defined benefit
plan, even if now terminated.
3. Has any eligible employees for whom IRA's
have not been established.
4. Uses the services of leased employees (as
described in Section 414(n)).
5. Is a member of an affiliated service group
(as described in Section 414(m)), a
controlled group of corporations (as
described in Section 414(b)), or trades or
businesses under common control (as
described in Section 414(c)), UNLESS all
eligible employees of all the members of
such groups, trades, or businesses,
participate under the SEP.
This form should only be used if the employer will pay the cost
of the SEP contributions. This form is not suitable for a SEP that
provides for contributions at the election of the employee whether or not
made pursuant to a salary reduction agreement.
Who May Participate. Any employee who is at least 21 years old
and has performed "service" for the employer in at least 3 years of the
immediately preceding 5 years must be permitted to participate in the SEP.
However, you may establish less restrictive eligibility requirements if
you choose. "Service" is any work performed for you for any period of
time, however short. If you are a member of an affiliated service group,
a controlled group of corporations, or trades or businesses under common
control, "service" includes any work performed for any period of time for
any other member of such group, trades, or businesses. Generally, to make
the agreement, all eligible employees (including all eligible employees,
if any, of other members of an affiliated service group, a controlled
group of corporations, or trades or businesses under common control) must
participate in the plan. However, employees covered under a collective
bargaining agreement and certain nonresident aliens may be excluded if
Section 410(b)(3)(A) or 410(b)(3)(C) applies to them. Employees whose
total compensation for the year is less than $363* may be excluded.
______
* This amount reflects the cost-of-living increase under Section
408(k)(8) effective 1-1-91. This amount is adjusted annually. Each
January, the IRS announces the increase, if any, in the Internal Revenue
Bulletin.
Amount of Contributions. You are not required to make any
contributions to an employee's SEP-IRA in a given year. However, if you
do make contributions, you must make them to the IRAs of all eligible
employees, whether or not they are still employed at the time
contributions are made. The contributions made must be the same
percentage of each employee's total compensation (up to a maximum
compensation base of $222,220*). The contributions you make in a year for
any one employee may not be more than the smaller of $30,000 or 15% of
that employee's total compensation (figured without considering the
SEP-IRA contributions).
For this purpose, compensation includes:
- Amounts received for personal services actually
performed (see Regulation Section 1.219-1(c); and
- Earned income defined under Section 401(c)(2).
You may no discriminate in favor of any employee who is highly
compensated if you use this Form 5305-SEP.
Under this form you may not integrate your SEP contributions
with, or offset them by, contributions made under the Federal Insurance
Contributions Act (FICA).
<PAGE>
Currently, employers who have established a SEP using this
agreement and have provided each participant with a copy of this form,
including the questions and answers below, are not required to file the
annual information returns, Forms 5500, 5500-E/R, or 5500EZ for the SEP.
Deducting Contributions. You may deduct all contributions to a
SEP subject to the limitations of Section 404(h). This SEP is maintained
on a calendar year basis and contributions to the SEP are deductible for
your taxable year with or within which the calendar year ends.
Contributions made for a particular taxable year and contributed by the
due date of your income tax return (including extensions) shall be deemed
made in that taxable year.
Making the Agreement. This agreement is considered made when
(1) IRAs have been established for all of your eligible employees, (2) you
have completed all blanks on the agreement form without modification, and
(3) you have given all eligible employees copies of the agreement form,
instructions, and questions and answers.
Keep the agreement form with your records; do not file it with
the IRS.
<PAGE>
INFORMATION FOR THE EMPLOYEE
The information provided below explains what a Simplified
Employee Pension Plan (SEP) is, how contributions are made, and how to
treat your employer's contributions for tax purposes.
Please read the questions and answers carefully. For more
specific information, also see the agreement form and instructions to your
employer on this form.
Questions and Answers
1. Q. What is a Simplified Employee Pension, or SEP?
A. A SEP is a retirement income arrangement under which
your employer may contribute any amount each year up to the smaller of
$30,000 or 15% of your compensation into your own Individual Retirement
Account/Annuity (IRA).
Your employer will provide you with a copy of the agreement
containing participation requirements and a description of the basis upon
which employer contributions may be made to your IRA.
All amounts contributed to your IRA by your employer belong to
you, even after you separate from service with that employer.
2. Q. Must my employer contribute to my IRA under the SEP?
A. Whether or not your employer makes a contribution to
the SEP is entirely within the employer's discretion. If a contribution
is made under the SEP, it must be allocated to all the eligible employees
according to the SEP agreement. The SEP specifies that the contribution
on behalf of each eligible employee will be the same percentage of
compensation (excluding compensation higher than $222,220*) for all
employees.
______
* This amount reflects the cost-of-living increase under Section
408(k)(8) effective 1-1-91. This amount is adjusted annually. Each
January, the IRS announces the increase, if any, in the Internal Revenue
Bulletin.
3. Q. How much may my employer contribute to my SEP-IRA in
any year?
A. Under the Model SEP (Form 5305-SEP) that your employer
has adopted, your employer will determine the amount of contribution to be
made to your IRA each year. However, the contribution for any year is
limited to the smaller of $30,000 or 15% of your compensation for that
year. The compensation used to determine this limit does not include any
amount which is contributed by your employer to your IRA under the SEP.
The agreement does not require an employer to maintain a particular level
of contributions. It is possible that for a given year no employer
contribution will be made on an employee's behalf.
Also see Question 5.
4. Q. How do I treat my employer's SEP contributions for my
taxes?
A. The amount your employer contributes for years
beginning after 1986 is excludable from your gross income subject to
certain limitations including the lesser of $30,000 or 15% of compensation
mentioned in 1A above and is not includible as taxable wages on your Form
W-2.
5. Q. May I also contribute to my IRA if I am a participant
in a SEP?
A. Yes. You may still contribute the lesser of $2,000 or
100% of your compensation to an IRA. However, the amount which is
deductible is subject to various limitations.
See also Question 11.
6. Q. Are there any restrictions on the IRA I select to
deposit my SEP contributions in?
A. Under the SEP that is approved by IRS, contributions
must be made to either a Model IRA which is executed on an IRS form or a
master or prototype IRA for which IRS has issued a favorable opinion
letter.
7. Q. What if I don't want a SEP-IRA?
A. Your employer may require that you become a
participant in such an arrangement as a condition of employment. However,
if the employer does not require all eligible employees to become
participants and an eligible employee elects not to participate, all other
employees of the same employer may be prohibited from entering into a
SEP-IRA arrangement with that employer. If one or more eligible employees
do not participate and the employer attempts to establish a SEP-IRA
agreement with the remaining employees, the resulting arrangement may
result in adverse tax consequences to the participating employees.
8. Q. Can I move funds from my SEP-IRA to another
tax-sheltered IRA?
A. Yes, it is permissible for you to withdraw, or
receive, funds from your SEP-IRA, and no more than 60 days later, place
such funds in another IRA, or SEP-IRA. This is called a "rollover" and may
not be done without penalty more frequently than at one-year intervals.
However, there are no restrictions on the number of times you may make
"transfers" if you arrange to have such funds transferred between the
trustees, so that you never have possession.
9. Q. What happens if I withdraw my employer's contribution
from my IRA?
A. If you don't want to leave the employer's contribution
in your IRA, you may withdraw it at any time, but any amount withdrawn is
includible in your income. Also, if withdrawals occur before attainment
of age 59-1/2 and not on account of death or disability, you may be subject
to a penalty tax.
10. Q. May I participate in a SEP even though I'm covered by
another plan?
A. An employer may not adopt this IRS Model SEP (Form
5305-SEP) if the employer maintains another qualified retirement plan or
has ever maintained a qualified defined benefit plan. However, if you
work for several employers you may be covered by a SEP of one employer and
a different SEP or pension or profit-sharing plan of another employer.
Also see Questions 11 and 12.
11. Q. What happens if too much is contributed to my SEP-IRA
in one year?
A. Any contribution that is more than the yearly
limitations may be withdrawn without penalty by the due date (plus
extensions) for filing your tax return (normally April 15th), but is
includible in your gross income. Excess contributions left in your
SEP-IRA account after that time are subject to a 6% excise tax.
Withdrawals of those contributions may be taxed as premature withdrawals.
Also see Question 10.
12. Q. Do I need to file any additional forms with the IRS
because I participate in a SEP?
A. No.
13. Q. Is my employer required to provide me with information
about SEP-IRA's and the SEP agreement?
A. Yes, your employer must provide you with a copy of the
executed SEP agreement (Form 5305-SEP), these Questions and Answers, and
provide a statement each year showing any contribution to your IRA.
Also see Question 4.
14. Q. Is the financial institution where I establish my IRA
also required to provide me with information?
A. Yes, it must provide you with a disclosure statement
which contains the following items of information in plain, nontechnical
language:
(1) the statutory requirements which relate to your
IRA;
(2) the tax consequences which follow the exercise of
various options and what those options are;
(3) participation eligibility rules and rules on the
deductibility and nondeductibility of retirement savings;
(4) the circumstances and procedures under which you
may revoke your IRA, including the name, address, and telephone
number of the person designated to receive notice of revocation
(this explanation must be prominently displayed at the beginning
of the disclosure statement);
(5) explanations of when penalties may be assessed
against you because of specified prohibited or penalized
activities concerning your IRA; and
(6) financial disclosure information which:
(a) either projects value growth of
your IRA under various contribution and
retirement schedules, or describes the
method of computing and allocating annual
earnings and charges which may be assessed;
(b) describes whether, and for what
period, the growth projections for the plan
are guaranteed, or a statement of the
earnings rate and terms on which the
projection is based;
(c) states the sales commission to be
charged in each year expressed as a
percentage of $1,000; and
(d) states the proportional amount of
any nondeductible life insurance which may
be a feature of your IRA.
See Publication 590, Individual Retirement Arrangements (IRA's)
available at most IRS offices, for a more complete explanation of the
disclosure requirements.
In addition to this disclosure statement, the financial
institution is required to provide you with a financial statement each
year. It may be necessary to retain and refer to statements for more than
one year in order to evaluate the investment performance of the IRA and in
order that you will know how to report IRA distributions for tax purposes.
Exhibit 14.4
AMENDMENTS TO THE
FIDUCIARY MANAGEMENT, INC.
PROTOTYPE DEFINED CONTRIBUTION RETIREMENT PLAN ("Plan")
The following amendments have been made to the Plan, effective
on the first day of the first plan year beginning on or after January 1,
1994.
1. Section 2.6 is amended by inserting at the conclusion of
the current provision the following:
In addition to other applicable limitations set forth
in the plan, and notwithstanding any other provision of the plan
to the contrary, for plan years beginning on or after January 1,
1994, the annual Compensation of each employee taken into
account under the plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the
cost of living in accordance with section 401(a)(17)(B) of the
Internal Revenue Code. The cost-of-living adjustment in effect
for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination
period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual
compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section
401(a)(17) of the Code shall mean the OBRA '93 annual
compensation limit set forth in this provision.
If Compensation for any prior determination period is taken
into account in determining an employee's benefits accruing in
the current plan year, the compensation for that prior
determination period is subject to OBRA '93 annual compensation
limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first
day of the first plan year beginning on or after January 1,
1994, the OBRA '93 annual compensation limit is $150,000
2. The first paragraph of Section 8.3(b) is amended to read as
follows:
(b) If the Participant's vested Account balance in the
Pension Plan or the Profit Sharing Plan exceeds (or at the time
of any prior distribution exceeded) three thousand five hundred
dollars ($3,500), no distribution of that interest shall be made
prior to the time the Participant's Account becomes immediately
distributable without the written consent of the Participant
and, in the case of the Pension Plan, the Participant's spouse
(or where either the Participant or the spouse has died, the
survivor). The consent of the Participant and the Participant's
spouse shall be obtained in writing within the ninety (90) day
period ending on the annuity starting date. The annuity
starting date is the first day of the first period for which an
amount is paid as an annuity or any other form. The
Administrator shall notify the Participant and the Participant's
spouse of the right to defer any distribution until the
Participant's Account balance is no longer immediately
distributable. Such notification shall include a general
description of the material features, and an explanation of the
relative values of the optional forms of benefit available under
the Plan in a manner that would satisfy the notice requirements
of Code Section 417(a)(3), and shall be provided no less than
thirty (30) days and no more than ninety (90) days prior to the
annuity starting date; provided that if a distribution is one to
which Sections 401(a)(11) and 417 of the Internal Revenue Code
do not apply, such distribution may commence less than 30 days
after the notice required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(1) the Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether
or not to elect a distribution (and, if applicable, a particular
distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 35,611
<INVESTMENTS-AT-VALUE> 45,251
<RECEIVABLES> 638
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 45,889
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 54
<TOTAL-LIABILITIES> 54
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,535
<SHARES-COMMON-STOCK> 2,107
<SHARES-COMMON-PRIOR> 1,955
<ACCUMULATED-NII-CURRENT> 280
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,379
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,641
<NET-ASSETS> 45,835
<DIVIDEND-INCOME> 484
<INTEREST-INCOME> 324
<OTHER-INCOME> 0
<EXPENSES-NET> 528
<NET-INVESTMENT-INCOME> 280
<REALIZED-GAINS-CURRENT> 4,399
<APPREC-INCREASE-CURRENT> 640
<NET-CHANGE-FROM-OPS> 5,319
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 222
<DISTRIBUTIONS-OF-GAINS> 4,055
<DISTRIBUTIONS-OTHER> 0
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<NUMBER-OF-SHARES-REDEEMED> 266
<SHARES-REINVESTED> 223
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<ACCUMULATED-NII-PRIOR> 222
<ACCUMULATED-GAINS-PRIOR> 4,035
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 407
<INTEREST-EXPENSE> 0
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<AVERAGE-NET-ASSETS> 44,323
<PER-SHARE-NAV-BEGIN> 21.58
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 2.24
<PER-SHARE-DIVIDEND> .12
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.76
<EXPENSE-RATIO> 1.19
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
