<PAGE>
Securities Act Registration No. 2-73468
Investment Company Act Registration No. 811-03235
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. 19 |X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 20 |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
------------------------------------- --------------------------
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective.
It is proposed that this filing become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
|X| on November 30, 1998 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 Expense Information
3. Condensed Financial Financial Highlights; Performance
Information Information
4. General Description of Introduction; Investment Objective and
Registrant Policies
5. Management of the Fund Management of the Fund; Financial
Highlights; Capital Structure; Brokerage
Transactions
5A. Management's Discussion Management's Discussion of Fund
of Fund Performance Performance
6. Capital Stock and Other Dividends, Distributions and Taxes;
Securities Capital Structure; Shareholder Reports
7. Purchase of Securities Determination of Net Asset Value;
Being Offered Purchase of Shares; Dividend
Reinvestment; Automatic Investment Plan;
Retirement Plans; Exchange Privilege
8. Redemption or Repurchase Redemption of Shares; Systematic
Withdrawal Plan
9. Legal Proceedings *
<PAGE>
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 the Fund
Registrant
15. Control Persons and Directors and Officers of the Fund;
Principal Holders of Principal Shareholders
Securities
16. Investment Advisory and Investment Adviser and Administrator;
Other Services Custodian; Independent Accountants
17. Brokerage Allocation and Allocation of Portfolio Brokerage
Other Practices
18. Capital Stock and Other Included in Prospectus under "Capital
Securities Structure" and Shareholder Meetings
19. Purchase, Redemption Included in Prospectus under "Purchase
and Pricing of Securities of Shares"; "Redemption of Shares";
"Determination of Net Asset Value";
"Dividend Reinvestment"; "Automatic
Investment Plan"; "Systematic Withdrawal
Plan"; "Exchange Privilege"; "Retirement
Plans" 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 and
Performance Data 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 NOVEMBER 30, 1998
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 November 30, 1998,
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 7
Dividend Reinvestment 8
Automatic Investment Plan 9
Systematic Withdrawal Plan 9
Exchange Privilege 10
Retirement Plans 10
Dividends, Distributions and Taxes 12
Brokerage Transactions 12
Capital Structure 13
Shareholder Reports 13
Year 2000 13
Performance Information 14
Management's Discussion of Fund Performance 14
Share Purchase Application 16
----------------------
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 0.90%
12b-1 Fees NONE
Other Expenses 0.29%
------
TOTAL FUND OPERATING EXPENSES 1.19%
------
------
*<F1>A fee of $12.00 is charged for each wire redemption.
EXAMPLE:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
An investor would pay the following
expenses on a $10,000 investment,
assuming (1) 5% annual return and
(2) redemption at the end of each time period: $121 $378 $654 $1,443
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. The
Annual Fund Operating Expenses are based on actual expenses incurred for the
year ended September 30, 1998. 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 audited financial statements and notes thereto, included in the Fund's
Annual Report to Shareholders. The Fund's audited financial statements, notes
thereto and auditor's report thereon contained in the Fund's Annual Report to
Shareholders are incorporated by reference into the Statement of Additional
Information. The Financial Highlights of the Fund set forth below have been
audited. 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> YEARS ENDED SEPTEMBER 30,
------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of year $26.53 $21.76 $21.58 $19.52 $20.08 $ 18.65 $ 17.55 $ 14.16 $ 18.79 $ 15.19
Income from investment
operations:
Net investment
(loss) income (0.02) 0.03 0.13 0.11 0.06 0.07 0.10 0.19 0.23 0.14
Net realized and unrealized
(losses) gains on
investments (4.15) 7.39 2.24 3.87 0.72 3.33 2.39 4.35 (4.66) 3.49
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations (4.17) 7.42 2.37 3.98 0.78 3.40 2.49 4.54 (4.43) 3.63
Less distributions:
Dividends from net
investment income (0.01) (0.15) (0.12) (0.04) (0.05) (0.11) (0.16) (0.23) (0.20) (0.03)
Distributions from
net realized gains (3.86) (2.50) (2.07) (1.88) (1.29) (1.86) (1.23) (0.92) -- --
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from distributions (3.87) (2.65) (2.19) (1.92) (1.34) (1.97) (1.39) (1.15) (0.20) (0.03)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of year $18.49 $26.53 $21.76 $21.58 $19.52 $ 20.08 $ 18.65 $ 17.55 $ 14.16 $ 18.79
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN (17.6%) 38.4% 12.7% 22.7% 4.1% 20.1% 15.3% 34.9% (23.8%) 24.0%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year
(in 000's $) 39,047 52,678 45,835 42,197 38,871 47,420 38,476 30,684 19,460 40,387
Ratio of expenses to average
net assets 1.2% 1.2% 1.2% 1.2% 1.2% 1.2% 1.3% 1.5% 1.4% 1.3%
Ratio of net investment
(loss) income to
average net assets (0.1%) 0.1% 0.6% 0.5% 0.3% 0.4% 0.6% 1.2% 1.1% 0.8%
Portfolio turnover rate 54.3% 60.7% 43.7% 28.6% 20.9% 32.5% 58.9% 62.7% 55.1% 42.2%
</TABLE>
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-1 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 with substantial investment portfolios.
The Adviser was organized in 1980 and is controlled by Ted D. Kellner and Donald
S. Wilson. Since that time, Mr. Kellner has served as Chairman of the Board and
Chief Executive Officer and Mr. Wilson has served as President and Treasurer of
the Adviser. Messrs. Kellner, Wilson and Patrick J. English are primarily
responsible for the day to day management of the Fund's portfolio. Messrs.
Kellner and Wilson have held this responsibility since the Fund commenced
operations on December 18, 1981 and Mr. English has held this responsibility
since October 1, 1997. Mr. English has been employed by the Adviser since 1986.
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 since the
Fund commenced operations.
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 1/12 of 1% (1% per annum) on the first $30,000,000 of
the daily net assets of the Fund and 1/12 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, 1998 were equal to .90% 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 1/12 of .1% (.1% per annum) on
the first $30,000,000 of the daily net assets of the Fund and 1/12 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, 1998 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) 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
Stock Market 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 Mutual Fund Services, LLC, 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 Mutual
Fund Services, LLC 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 Mutual Fund Services, LLC, 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 Mutual Fund Services, LLC will
charge a $25 fee against a shareholder's account for any payment check returned
for insufficient funds. 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 for further credit to:
777 East Wisconsin Avenue Fiduciary Capital Growth Fund, Inc.
Milwaukee, Wisconsin 53202 "name of shareholder"
ABA #075000022 "existing account number" (if any).
Credit to: Firstar Mutual Fund Services, LLC
Account #112-952-137
A WIRE TRANSFER SHOULD BE PRECEDED BY A PHONE CALL TO FIRSTAR MUTUAL FUND
SERVICES, LLC 1-800-811-5311, IN ORDER TO OBTAIN A CONFIRMATION NUMBER AND TO
ENSURE PROMPT AND ACCURATE HANDLING OF FUNDS. THE FUND AND ITS TRANSFER AGENT
ARE NOT RESPONSIBLE FOR THE CONSEQUENCES OF DELAYS RESULTING FROM THE BANKING OR
FEDERAL RESERVE WIRE SYSTEM, OR FROM INCOMPLETE WIRING INSTRUCTIONS. 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. Shares of the
Fund may be purchased without regard to the foregoing minimum initial investment
by employees, officers and directors of the Fund or the Adviser and by members
of their "immediate families" (i.e., spouses, siblings, parents, children,
grandchildren and grandparents) and by retirement plans and trusts for their
benefit. The officers of the Fund in their discretion may waive the minimum
initial investment for charitable organizations, employee benefit plans whose
investment in the aggregate exceed the Fund's minimum initial investment, and
others with whom the Fund or Adviser has an established relationship.
A shareholder may also invest in the Fund by purchasing shares through a
registered broker-dealer who may charge a fee either at time of purchase or
redemption. The fee, if charged, is retained by the broker-dealer and not
remitted to the Fund or Adviser.
Shareholders may purchase shares of the Fund through programs or services
offered or administered by broker-dealers, financial institutions or other
service providers ("Processing Intermediaries") that have entered into
agreements with the Fund. Such Processing Intermediaries may become shareholders
of record and may use procedures and impose restrictions in addition to or
different from those applicable to shareholders who invest directly in the Fund.
Certain services of the Fund may not be available or may be modified in
connection with the programs provided by Processing Intermediaries. The Fund may
accept requests to purchase additional shares into an account in which the
Processing Intermediary is the shareholder of record only from the Processing
Intermediary.
The Fund may authorize one or more Processing Intermediaries (and other
Processing Intermediaries properly designated thereby) to accept purchase orders
on the Fund's behalf. In such event, the Fund will be deemed to have received a
purchase order when the Processing Intermediary accepts the customer order, and
the order will be priced at the Fund's net asset value next computed after it is
accepted by the Processing Intermediary.
Processing Intermediaries may charge fees or assess other charges for the
services they provide to their customers. Any such fee or charge paid directly
by shareholders is retained by the Processing Intermediary and is not remitted
to the Fund or the Adviser. Additionally, the Adviser and/or the Fund may pay
fees to Processing Intermediaries to compensate them for the services they
provide. Program materials provided by the Processing Intermediary should be
read in conjunction with the Prospectus before investing in this manner. Shares
of the Fund may be purchased through Processing Intermediaries without regard to
the Fund's minimum purchase requirement.
Certain Processing Intermediaries that have entered into agreements with the
Fund may enter purchase orders by telephone, with payment to follow the next
business day as specified in the agreement. The Fund may effect such purchase
orders at the net asset value next determined after receipt of the telephone
purchase order. It is the responsibility of the Processing Intermediary to place
the order with the Fund on a timely basis. If payment is not received within the
time period specified in the agreement, the Processing Intermediary could be
held liable for any resulting fees or losses.
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
Mutual Fund Services, LLC, 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 Mutual Fund Services, LLC 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 Mutual Fund Services,
LLC, 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 Mutual Fund Services, LLC, but the effective date of redemption will be
delayed until the request is received by Firstar Mutual Fund Services, LLC.
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 person(s)
Sole Proprietor, Custodial required to sign for the account, exactly as
(Uniform Gift to Minors Act), it is registered.
General Partners
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 Mutual Fund Services, LLC at 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 Mutual Fund Services,
LLC in its capacity as transfer agent, have been satisfied.
The redemption price is the net asset value next determined after receipt by
Firstar Mutual Fund Services, LLC 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 Mutual Fund
Services, LLC currently charges a $12 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.
Shares of the Fund purchased through programs of services offered or
administered by Processing Intermediaries that have entered into agreements with
the Fund may be required to be redeemed through such programs. Such Processing
Intermediaries may become shareholders of record and may use procedures and
impose restrictions in addition to or different from those applicable to
shareholders who redeem shares directly through the Fund. The Fund may accept
redemption requests for an account in which the Processing Intermediary is the
shareholder of record only from the Processing Intermediary. The Fund may
authorize one or more Processing Intermediaries (and other Processing
Intermediaries properly designated thereby) to accept redemption requests on the
Fund's behalf. In such event, the Fund will be deemed to have received a
redemption request when the Processing Intermediary accepts the shareholder's
request, and the redemption price will be the Fund's net asset value next
computed after the shareholder's redemption request is accepted by the
Processing Intermediary.
Processing Intermediaries that instruct Firstar Mutual Fund Services, LLC in
writing may make redemption requests by telephone by calling Firstar Mutual Fund
Services, LLC at 1-800-811-5311 or (414) 765-4124 provided the redemption
proceeds are to be mailed or wired to the Processing Intermediary's address or
bank of record as shown on the records of the transfer agent. The Fund reserves
the right to refuse a telephone redemption request if it believes it advisable
to do so. PROCEDURES FOR TELEPHONE REDEMPTIONS MAY BE MODIFIED OR TERMINATED AT
ANY TIME BY THE FUND OR FIRSTAR MUTUAL FUND SERVICES, LLC. Neither the Fund nor
Firstar Mutual Fund Services, LLC will be liable for following instructions for
telephone redemption transactions that they reasonably believe to be genuine,
provided reasonable procedures are used to confirm the genuineness of the
telephone instructions, but may be liable for unauthorized transactions if they
fail to follow such procedures. These procedures include requiring some form of
personal identification prior to acting upon the telephone instructions and
recording all telephone calls. During periods of substantial economic or market
change, telephone redemptions may be difficult to implement. In the event a
Processing Intermediary cannot contact Firstar Mutual Fund Services, LLC by
telephone, the Processing Intermediary should make a redemption request in
writing in the manner set forth above.
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 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 Mutual Fund Services, LLC 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. A $25 fee will be charged by Firstar Mutual Fund
Services, LLC if sufficient funds are not available in the shareholder's account
at the time of the automatic transaction. To use this service, the shareholder
must authorize the transfer of funds from his checking, NOW account 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. The Automatic Investment Plan must
be implemented with a financial institution that is a member of the Automatic
Clearing House. Shareholders may change the date or amount of investments at any
time by writing to or calling Firstar Mutual Fund Services, LLC 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 Mutual Fund Services, LLC
currently charges a $12 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 Mutual Fund Services, LLC in
writing or by telephone at 1-800-811-5311. To change the designated payee or
payee's address, you must notify Firstar Mutual Fund Services, LLC 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 Firstar 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 Firstar 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 Firstar 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 Firstar 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
Firstar 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. The Fund will not notify any
shareholder in advance of terminating its Exchange Privilege.
RETIREMENT PLANS
INDIVIDUAL RETIREMENT ACCOUNTS
Individual shareholders may establish their own tax-sheltered Individual
Retirement Accounts ("IRA"). The Fund offers three types of IRAs that can be
adopted by executing the appropriate Internal Revenue Service ("IRS") Form.
Traditional IRA. In a Traditional IRA, amounts contributed to the IRA may be
tax deductible at the time of contribution depending on whether the shareholder
is an "active participant" in an employer-sponsored retirement plan and the
shareholder's income. Distributions from a Traditional IRA will be taxed at
distribution except to the extent that the distribution represents a return of
the shareholder's own contributions for which the shareholder did not claim (or
was not eligible to claim) a deduction. Distributions prior to age 59-1/2 may be
subject to an additional 10% tax applicable to certain premature distributions.
Distributions must commence by April 1 following the calendar year in which the
shareholder attains age 70-1/2. Failure to begin distributions by this date (or
distributions that do not equal certain minimum thresholds) may result in
adverse tax consequences.
Roth IRA. In a Roth IRA, amounts contributed to the IRA are taxed at the time
of contribution, but distributions from the IRA are not subject to tax if the
shareholder has held the IRA for certain minimum periods of time (generally,
until age 59-1/2). Shareholders whose incomes exceed certain limits are
ineligible to contribute to a Roth IRA. Distributions that do not satisfy the
requirements for tax-free withdrawal are subject to income taxes (and possibly
penalty taxes) to the extent that the distribution exceeds the shareholder's
contributions to the IRA. The minimum distribution rules applicable to
Traditional IRAs do not apply during the lifetime of the shareholder. Following
the death of the shareholder, certain minimum distribution rules apply.
For Traditional and Roth IRAs, the maximum annual contribution generally is
equal to the lesser of $2,000 or 100% of the shareholder's compensation (earned
income). An individual may also contribute to a Traditional IRA or Roth IRA on
behalf of his or her spouse provided that the individual has sufficient
compensation (earned income). Contributions to a Traditional IRA reduce the
allowable contribution under a Roth IRA, and contributions to a Roth IRA reduce
the allowable contribution to a Traditional IRA.
Education IRA. In an Education IRA, contributions are made to an IRA
maintained on behalf of a beneficiary under age 18. The maximum annual
contribution is $500 per beneficiary. The contributions are not tax deductible
when made. However, if amounts are used for certain educational purposes,
neither the contributor nor the beneficiary of the IRA are taxed upon
distribution. The beneficiary is subject to income (and possibly penalty taxes)
on amounts withdrawn from an Education IRA that are not used for qualified
educational purposes. Shareholders whose income exceeds certain limits are
ineligible to contribute to an Education IRA.
Under current IRS regulations, an IRA applicant must be furnished a
disclosure statement containing information specified by the IRS. The applicant
generally has the right to revoke his account within seven days after receiving
the disclosure statement and obtain a full refund of his contributions. The
custodian may, in its discretion, hold the initial contribution uninvested until
the expiration of the seven-day revocation period. The custodian does not
anticipate that it will exercise its discretion but reserves the right to do so.
SIMPLIFIED EMPLOYEE PENSION PLAN
A Traditional IRA may also be used in conjunction with a Simplified Employee
Pension Plan ("SEP-IRA"). A SEP-IRA is established through execution of Form
5305-SEP together with a Traditional IRA established for each eligible employee.
Generally, a SEP-IRA allows an employer (including a self-employed individual)
to purchase shares with tax deductible contributions not exceeding annually for
any one participant 15% of compensation (disregarding for this purpose
compensation in excess of $160,000 per year). The $160,000 compensation limit
applies for 1998 and is adjusted periodically for cost of living increases. A
number of special rules apply to SEP Plans, including a requirement that
contributions generally be made on behalf of all employees of the employer
(including for this purpose a sole proprietorship or partnership) who satisfy
certain minimum participation requirements.
SIMPLE IRA
An IRA may also be used in connection with a SIMPLE Plan established by the
shareholder's employer (or by a self-employed individual). When this is done,
the IRA is known as a SIMPLE IRA, although it is similar to a Traditional IRA
with the exceptions described below. Under a SIMPLE Plan, the shareholder may
elect to have his or her employer make salary reduction contributions of up to
$6,000 per year to the SIMPLE IRA. The $6,000 limit applies for 1998 and is
adjusted periodically for cost of living increases. In addition, the employer
will contribute certain amounts to the shareholder's SIMPLE IRA, either as a
matching contribution to those participants who make salary reduction
contributions or as a non-elective contribution to all eligible participants
whether or not making salary reduction contributions. A number of special rules
apply to SIMPLE Plans, including (1) a SIMPLE Plan generally is available only
to employers with fewer than 100 employees; (2) contributions must be made on
behalf of all employees of the employer (other than bargaining unit employees)
who satisfy certain minimum participation requirements; (3) contributions are
made to a special SIMPLE IRA that is separate and apart from the other IRAs of
employees; (4) the distribution excise tax (if otherwise applicable) is
increased to 25% on withdrawals during the first two years of participation in a
SIMPLE IRA; and (5) amounts withdrawn during the first two years of
participation may be rolled over tax-free only into another SIMPLE IRA (and not
to a Traditional IRA or to a Roth IRA). A SIMPLE IRA is established by executing
Form 5304-SIMPLE together with an IRA established for each eligible employee.
403(B)(7) CUSTODIAL ACCOUNT
A 403(b)(7) Custodial Account is available for use in conjunction with the
403(b)(7) program established by certain educational organizations and other
organizations that are exempt from tax under 501(c)(3) of the Internal Revenue
Code as amended (the "Code"). Amounts contributed to the custodial account in
accordance with the employer's 403(b)(7) program will be invested on a tax-
deductible basis in shares of the Fund. Various contribution limits apply with
respect to 403(b)(7) arrangements.
DEFINED CONTRIBUTION RETIREMENT PLAN (401(K))
A prototype defined contribution plan is available for employers who wish to
purchase shares of the Fund with tax deductible contributions. The plan consists
of both profit sharing and money purchase pension components. The profit sharing
component includes a Section 401(k) cash or deferred arrangement for employers
who wish to allow eligible employees to elect to reduce their compensation and
have such amounts contributed to the plan. The limit on employee salary
reduction contributions is $10,000 annually (as adjusted for cost-of-living
increases) although lower limits may apply as a result of non-discrimination
requirements incorporated into the plan. The Fund has received an opinion letter
from the IRS holding that the form of the prototype defined contribution
retirement plan is acceptable under Section 401 of the Code. The maximum annual
contribution that may be allocated to the account of any participant is
generally the lesser of $30,000 or 25% of compensation (earned income).
Compensation in excess of $160,000 (as periodically indexed for cost-of-living
increases) is disregarded for this purpose. The maximum amount that is
deductible by the employer depends upon whether the employer adopts both the
profit sharing and money purchase components of the plan, or only one component.
RETIREMENT PLAN FEES
Firstar Bank Milwaukee, Milwaukee,Wisconsin, serves as trustee or custodian
of the retirement plans. Firstar Bank Milwaukee 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 participants;
$12.50 annual maintenance fee per participant account; $15 for transferring to a
successor trustee or custodian; $15 for distribution(s) to a participant; and
$15 for refunding any contribution in excess of the deductible limit. Firstar
Bank Milwaukee's fee schedule may be changed upon written notice.
Requests for information and forms concerning the retirement plans should be
directed to the Fund. Because a retirement program may involve commitments
covering future years, it is important that the investment objective of the Fund
be consistent with the participant's retirement objectives. Premature withdrawal
from a retirement plan will result in adverse tax consequences. Consultation
with a competent financial and tax adviser regarding the retirement plans is
recommended.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will endeavor to qualify as a "regulated investment company" under
Subchapter M of the Code. Pursuant to the qualification requirements of
Subchapter M, the Fund intends to distribute substantially all of its net
investment income to its shareholders annually.
The Fund also intends to distribute substantially all of its net capital
gains less available capital loss carryovers annually and other income to reduce
or avoid federal income and excise taxes. 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 unless exempt
from federal taxation. Shareholders will be notified annually as to the federal
tax status of dividends and distributions.
Distributions and redemptions may also be taxed under state and local tax
laws. Shareholders are advised to consult their tax adviser concerning the
application of state and local taxes.
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. 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 Mutual Fund Services, LLC, 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
Mutual Fund Services, LLC and direct that his account be credited with the
shares. A shareholder may direct Firstar Mutual Fund Services, LLC 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 Mutual Fund Services, LLC, 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.
YEAR 2000
The Fund is aware of the "Year 2000" issue. The "Year 2000" issue stems from
the use of a two-digit format to define the year in certain date-sensitive
computer application systems rather than the use of a four-digit format. As a
result, date-sensitive software programs could recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in major systems or
process failures or the generation of erroneous data, which would lead to
disruptions in the Fund's business operations.
The Fund has no application systems of its own and is entirely dependent on
its service providers' systems and software. The Fund is working with its
service providers (including the adviser, its transfer agent and its custodian)
to identify and remedy any Year 2000 issues. However, the Fund cannot
guarantee that all Year 2000 issues will be identified and remedied, and the
failure to successfully identify and remedy all Year 2000 issues could result
in an adverse impact on the Fund.
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, 1997, 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% 1990 $26,297 +163.0%
1982 14,532 +45.3 1991 35,831 +258.3
1983 18,731 +87.3 1992 41,008 +310.1
1984 17,942 +79.4 1993 47,032 +370.3
1985 23,312 +133.1 1994 47,213 +372.1
1986 23,325 +133.3 1995 59,726 +497.3
1987 21,261 +112.6 1996 69,948 +599.5
1988 25,254 +152.5 1997 90,377 +803.8
1989 29,777 +197.8
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, Russell 2000 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, 1998, corporate earnings were
generally weaker-than-expected. Economic growth slowed and inflation remained
very low. Asian economies were weak and were a drag on international
businesses. Interest rates declined and investors moved heavily into government
bonds in a flight to "quality" as some large hedge funds announced significant
losses relating to currency and derivative transactions. This economic backdrop
proved very troublesome for the stock market generally, and for the Fund's
portfolio. The Fund, which invests primarily in medium-sized and smaller
companies, showed a decline for the fiscal year which was slightly less than
smaller company stocks represented by the Russell 2000 Index. Large blue chip
growth companies, however, continued to do somewhat better than the indexes
comprised more of the medium-sized and smaller companies.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN
FIDUCIARY CAPITAL GROWTH FUND, NASDAQ COMPOSITE INDEX(1)<F2> AND RUSSELL 2000
INDEX(2)<F3>
FIDUCIARY CAPITAL NASDAQ RUSSELL
DATE GROWTH FUND COMPOSITE INDEX 2000 INDEX
9/30/88 $10,000 $10,000 $10,000
9/30/89 $12,400 $12,190 $12,150
9/30/90 $9,449 $8,874 $8,857
9/30/91 $12,746 $13,569 $12,834
9/30/92 $14,697 $15,034 $13,989
9/30/93 $17,651 $19,680 $18,620
9/30/94 $18,374 $19,719 $18,899
9/30/95 $22,545 $26,917 $23,322
9/30/96 $25,409 $31,654 $26,377
9/30/97 $35,165 $43,493 $35,134
9/30/98 $28,969 $43,701 $28,451
(1)<F2> NASDAQ Composite Index covers 4,500 stocks traded over the counter. It
represents many small company stocks but is heavily influenced by
about 100 of the largest NASDAQ stocks. It is a value-weighted index
calculated on price change only and does not include income.
(2)<F3> The Russell 2000 Index is an index comprised of 2,000 publicly traded
small capitalization common stocks that are ranked in terms of
capitalization below the large and mid-range capitalization sectors of
the United States equity market. The Russell 2000 Index is a
trademark/service mark of the Frank Russell Company.
FIDUCIARY CAPITAL GROWTH FUND, INC.
- --- This is a follow-up application
(Investment by wire transfer. See page 5 of the Prospectus.)
SHARE PURCHASE APPLICATION
Minimum Initial Investment $1,000
Minimum Subsequent Investment $100
Mail Completed Application to:
Fiduciary Capital Growth Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Overnight Express Mail to:
Fiduciary Capital Growth Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
3rd Floor
615 E. Michigan Street
Milwaukee, Wisconsin 53202
Use this form for individual, custodial, trust, profit-sharing or pension plan
accounts, including self-directed IRA, SEP/IRA and 401(k) plans. DO NOT USE
THIS FORM FOR FIDUCIARY CAPITAL GROWTH FUND, INC.-SPONSORED 401(K), 403(B)(7),
SEP/IRA, SIMPLE IRA, IRAs OR DEFINED CONTRIBUTION PLANS (KEOGH OR CORPORATE
PROFIT-SHARING AND MONEY-PURCHASE) WHICH REQUIRE FORMS AVAILABLE FROM THE FUND.
For information please call 1-800-811-5311 or 1-414-765-4124.
- ------------------------------------------------------------------------------
o ACCOUNT REGISTRATION
Individual ---
Name
----------------------------------------------------------------------------
Social Security Number Citizen of --- U.S. --- Other
-----------------------------------------------------------------------------
Joint Owner*<F4> ---
Name
-----------------------------------------------------------------------------
Social Security Number Citizen of --- U.S. --- Other
-----------------------------------------------------------------------------
Gift to Minor ---
Custodian
-----------------------------------------------------------------------------
Minor Minor's Birthdate
-----------------------------------------------------------------------------
Minor's Social Security Number Citizen of --- U.S. --- Other
----------------------------------------------------------------------------
Corporation, Partnership or Other Entity ---
Name of Entity
-----------------------------------------------------------------------------
Taxpayer Identification Number
-----------------------------------------------------------------------------
o A corporate resolution form or certificate is required for corporate
accounts.
-----------------------------------------------------------------------------
Trust, Estate or Guardianship ---
*<F4>(Registration will be Joint Tenants with Rights of Survivorship
(JTWROS) unless otherwise specified)
Name
-----------------------------------------------------------------------------
Name of Fiduciary(s)
-----------------------------------------------------------------------------
Taxpayer Identification Number Date of Trust
-----------------------------------------------------------------------------
o Additional documentation and certification may be requested.
- ------------------------------------------------------------------------------
o MAILING ADDRESS
--- Send Duplicate Confirmations To:
- ------------------------------------------------------------------------------
Street, Apt. Name
- ------------------------------------------------------------------------------
City, State, Zip Code Street, Apt.
- ------------------------------------------------------------------------------
Daytime Phone Number City, State, Zip Code
- ------------------------------------------------------------------------------
o INVESTMENT, PAYMENT FOR INITIAL PURCHASE AND DISTRIBUTIONS
By --- check
or --- wire**<F5>
The minimum initial Investment is $1,000 for shares of Fiduciary Capital Growth
Fund, Inc. Minimum additions to the Fund are $100.
DISTRIBUTION OPTIONS
Capital Gains Capital Gains
Capital Gains Reinvested in Cash Capital Gains
& Dividends & Dividends & Dividends & Dividends
Amount Reinvested in Cash Reinvested In Cash
$ ---- ---- ---- ----
- ------------------------------------------------------------------------------
(If no dividend option is checked, dividends and capital gains will be
reinvested.)
- ---- If you would like your cash payments automatically deposited to your
checking or savings account, please check the box at left and attach
a voided check.
**<F5>Indicate date and total amount of wire:
Date------------------------------ Amount $--------------------------
WIRING INSTRUCTIONS: The wire transfer should be preceded by a telephone call
to Firstar Trust Company at 1-800-811-5311 or 1-414-765-4124 in order to obtain
a confirmation number and to ensure prompt and accurate handling of funds. The
Fund and its transfer agent are not responsible for the consequences of delays
resulting from the banking or Federal Reserve Wire System, or from incomplete
wiring instructions. A completed share purchase application also must be sent to
FMI Focus Fund at the above address immediately following the investment to
establish a NEW account by wire transfer. A purchase request for the Fund should
be wired through the Federal Reserve System as follows:
Firstar Bank of Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA Number 0750-00022
For credit to: Firstar Mutual Fund Services, LLC
Account Number 112-952-137
For further credit to: FMI Focus Fund
Shareholder name:-------------------------------------------
Shareholder account number (if known): ---------------------
- ------------------------------------------------------------------------------
o EXCHANGE PRIVILEGE
If investment is by exchange, such exchange should be made from:
- --- FMI Focus Fund --- Firstar Money Market Fund
Account# ------------------------ Account# ----------------------
(I understand that exchanges between the Funds are taxable transactions.)
Amount of Exchange $ --------------or Number of Shares --------------------
- ------------------------------------------------------------------------------
o AUTOMATIC INVESTMENT PLAN
Important: Attach an unsigned, voided check (for checking accounts) or a savings
account deposit slip here, and complete this form.
I would like to establish an Automatic Investment Plan for Fiduciary Capital
Growth Fund, Inc. as described in the Prospectus. Based on these instructions,
Firstar Mutual Fund Services, LLC, the Transfer Agent for Fiduciary Capital
Growth Fund, Inc., will automatically transfer money directly from my checking,
NOW account or savings account on the --- day of the month, or the first
business day thereafter, to purchase shares in Fiduciary Capital Growth Fund,
Inc. If the automatic purchase cannot be made due to insufficient funds or
stop payment, a $25 fee will be assessed.
Please start the Automatic Investment Plan on this month, day and year: --------
- -----------------------
Please debit my bank account $------------- ($50 minimum) on a --- monthly ---
quarterly basis, to be invested in my Fiduciary Capital Growth Fund, Inc.
account (account number, if known----------------------------------).
I (we) authorize you via the ACH Network to honor all debit entries initiated
- --- monthly OR --- quarterly through Firstar Bank of Milwaukee, N.A. on behalf
of the Firstar Trust Company. All such debits are subject to sufficient
collected funds in my account to pay the debit when presented.
- -------------------------------------------------------------------------------
Name(s) on your Bank Account Signature of Bank Account Owner
- -------------------------------------------------------------------------------
Signature of Joint Owner (if
any)
- -----------------------------------------
Account Number
- ------------------------------------------------------------------------------
o SYSTEMATIC WITHDRAWALS
A balance of at least $10,000 is required for this option.
I would like to withdraw from Fiduciary Capital Growth Fund, Inc.
$------------- (exact dollars per payment - $100 minimum)
- --- 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 these
months:
- --- Jan. --- Feb. --- Mar. --- Apr. --- May --- June
- --- July --- Aug. --- Sept. --- Oct. --- Nov. --- Dec.
- --- I would like my payments automatically deposited to my checking or savings
account. I have attached a voided check.
- ------------------------------------------------------------------------------
o SIGNATURES AND CERTIFICATION
Under the penalty of perjury, I certify that (1) the Social Security Number or
Taxpayer Identification Number shown on this form is my correct Taxpayer
Identification Number, and (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (IRS) that I
am subject to backup withholding 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.
- ------------------------------------------------------------------------------
Signature*<F6> Signature of Co-Owner, if any
- ------------------------------------
Date
*<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.
- --- This is a follow-up application
(Investment by wire transfer. See page 5 of the Prospectus.)
SHARE PURCHASE APPLICATION
Minimum Initial Investment $1,000
Minimum Subsequent Investment $100
Mail Completed Application to:
Fiduciary Capital Growth Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
Overnight Express Mail to:
Fiduciary Capital Growth Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
3rd Floor
615 E. Michigan Street
Milwaukee, Wisconsin 53202
Use this form for individual, custodial, trust, profit-sharing or pension plan
accounts, including self-directed IRA, SEP/IRA and 401(k) plans. DO NOT USE
THIS FORM FOR FIDUCIARY CAPITAL GROWTH FUND, INC.-SPONSORED 401(K), 403(B)(7),
SEP/IRA, SIMPLE IRA, IRAs OR DEFINED CONTRIBUTION PLANS (KEOGH OR CORPORATE
PROFIT-SHARING AND MONEY-PURCHASE) WHICH REQUIRE FORMS AVAILABLE FROM THE FUND.
For information please call 1-800-811-5311 or 1-414-765-4124.
- ------------------------------------------------------------------------------
o ACCOUNT REGISTRATION
Individual ---
Name
----------------------------------------------------------------------------
Social Security Number Citizen of --- U.S. --- Other
-----------------------------------------------------------------------------
Joint Owner*<F4> ---
Name
-----------------------------------------------------------------------------
Social Security Number Citizen of --- U.S. --- Other
-----------------------------------------------------------------------------
Gift to Minor ---
Custodian
-----------------------------------------------------------------------------
Minor Minor's Birthdate
-----------------------------------------------------------------------------
Minor's Social Security Number Citizen of --- U.S. --- Other
----------------------------------------------------------------------------
Corporation, Partnership or Other Entity ---
Name of Entity
-----------------------------------------------------------------------------
Taxpayer Identification Number
-----------------------------------------------------------------------------
o A corporate resolution form or certificate is required for corporate
accounts.
-----------------------------------------------------------------------------
Trust, Estate or Guardianship ---
*<F4>(Registration will be Joint Tenants with Rights of Survivorship
(JTWROS) unless otherwise specified)
Name
-----------------------------------------------------------------------------
Name of Fiduciary(s)
-----------------------------------------------------------------------------
Taxpayer Identification Number Date of Trust
-----------------------------------------------------------------------------
o Additional documentation and certification may be requested.
- ------------------------------------------------------------------------------
o MAILING ADDRESS
--- Send Duplicate Confirmations To:
- ------------------------------------------------------------------------------
Street, Apt. Name
- ------------------------------------------------------------------------------
City, State, Zip Code Street, Apt.
- ------------------------------------------------------------------------------
Daytime Phone Number City, State, Zip Code
- ------------------------------------------------------------------------------
o INVESTMENT, PAYMENT FOR INITIAL PURCHASE AND DISTRIBUTIONS
By --- check
or --- wire**<F5>
The minimum initial Investment is $1,000 for shares of Fiduciary Capital Growth
Fund, Inc. Minimum additions to the Fund are $100.
DISTRIBUTION OPTIONS
Capital Gains Capital Gains
Capital Gains Reinvested in Cash Capital Gains
& Dividends & Dividends & Dividends & Dividends
Amount Reinvested in Cash Reinvested In Cash
$ ---- ---- ---- ----
- ------------------------------------------------------------------------------
(If no dividend option is checked, dividends and capital gains will be
reinvested.)
- ---- If you would like your cash payments automatically deposited to your
checking or savings account, please check the box at left and attach
a voided check.
**<F5>Indicate date and total amount of wire:
Date------------------------------ Amount $--------------------------
WIRING INSTRUCTIONS: The wire transfer should be preceded by a telephone call
to Firstar Trust Company at 1-800-811-5311 or 1-414-765-4124 in order to obtain
a confirmation number and to ensure prompt and accurate handling of funds. The
Fund and its transfer agent are not responsible for the consequences of delays
resulting from the banking or Federal Reserve Wire System, or from incomplete
wiring instructions. A completed share purchase application also must be sent to
FMI Focus Fund at the above address immediately following the investment to
establish a NEW account by wire transfer. A purchase request for the Fund should
be wired through the Federal Reserve System as follows:
Firstar Bank of Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA Number 0750-00022
For credit to: Firstar Mutual Fund Services, LLC
Account Number 112-952-137
For further credit to: FMI Focus Fund
Shareholder name:-------------------------------------------
Shareholder account number (if known): ---------------------
- ------------------------------------------------------------------------------
o EXCHANGE PRIVILEGE
If investment is by exchange, such exchange should be made from:
- --- FMI Focus Fund --- Firstar Money Market Fund
Account# ------------------------ Account# ----------------------
(I understand that exchanges between the Funds are taxable transactions.)
Amount of Exchange $ --------------or Number of Shares --------------------
- ------------------------------------------------------------------------------
o AUTOMATIC INVESTMENT PLAN
Important: Attach an unsigned, voided check (for checking accounts) or a savings
account deposit slip here, and complete this form.
I would like to establish an Automatic Investment Plan for Fiduciary Capital
Growth Fund, Inc. as described in the Prospectus. Based on these instructions,
Firstar Mutual Fund Services, LLC, the Transfer Agent for Fiduciary Capital
Growth Fund, Inc., will automatically transfer money directly from my checking,
NOW account or savings account on the --- day of the month, or the first
business day thereafter, to purchase shares in Fiduciary Capital Growth Fund,
Inc. If the automatic purchase cannot be made due to insufficient funds or
stop payment, a $25 fee will be assessed.
Please start the Automatic Investment Plan on this month, day and year: --------
- -----------------------
Please debit my bank account $------------- ($50 minimum) on a --- monthly ---
quarterly basis, to be invested in my Fiduciary Capital Growth Fund, Inc.
account (account number, if known----------------------------------).
I (we) authorize you via the ACH Network to honor all debit entries initiated
- --- monthly OR --- quarterly through Firstar Bank of Milwaukee, N.A. on behalf
of the Firstar Trust Company. All such debits are subject to sufficient
collected funds in my account to pay the debit when presented.
- -------------------------------------------------------------------------------
Name(s) on your Bank Account Signature of Bank Account Owner
- -------------------------------------------------------------------------------
Signature of Joint Owner (if
any)
- -----------------------------------------
Account Number
- ------------------------------------------------------------------------------
o SYSTEMATIC WITHDRAWALS
A balance of at least $10,000 is required for this option.
I would like to withdraw from Fiduciary Capital Growth Fund, Inc.
$------------- (exact dollars per payment - $100 minimum)
- --- 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 these
months:
- --- Jan. --- Feb. --- Mar. --- Apr. --- May --- June
- --- July --- Aug. --- Sept. --- Oct. --- Nov. --- Dec.
- --- I would like my payments automatically deposited to my checking or savings
account. I have attached a voided check.
- ------------------------------------------------------------------------------
o SIGNATURES AND CERTIFICATION
Under the penalty of perjury, I certify that (1) the Social Security Number or
Taxpayer Identification Number shown on this form is my correct Taxpayer
Identification Number, and (2) I am not subject to backup withholding either
because I have not been notified by the Internal Revenue Service (IRS) that I
am subject to backup withholding 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.
- ------------------------------------------------------------------------------
Signature*<F6> Signature of Co-Owner, if any
- ------------------------------------
Date
*<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
GEORGE D. DALTON
PATRICK J. ENGLISH
TED D. KELLNER
THOMAS W. MOUNT
DONALD S. WILSON
INVESTMENT ADVISER
AND ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
FIRSTAR MUTUAL FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-811-5311
or
414-765-4124
CUSTODIAN
FIRSTAR BANK MILWAUKEE
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS 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 November 30, 1998
- -----------------------------------
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 November 30, 1998. 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.
<PAGE>
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 ........................................................................10
SHAREHOLDER MEETINGS..........................................................11
INDEPENDENT ACCOUNTANTS.......................................................12
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 November 30, 1998 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.
-i-
<PAGE>
INVESTMENT RESTRICTIONS
As set forth in the prospectus dated November 30, 1998 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 total
assets, taken at current value, would be invested in securities of such issuer,
except that up to 25% of the Fund's total assets may be invested without regard
to these limitations.
<PAGE>
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, 50
30 South Wacker Drive Suite 3800 Chicago, Illinois 60606 (A DIRECTOR OF THE
FUND)
Mr. Allen is Executive Vice President, Consumer & Business Services,
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. 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.
2
<PAGE>
GEORGE D. DALTON, 70
255 Fiserv Drive
Brookfield, WI 53045
(A DIRECTOR OF THE FUND)
Mr. Dalton is Chairman of the Board, Chief Executive Officer
and a director of Fiserv, Inc., a provider of financial data processing services
to financial institutions, and has served in that capacity since 1984. Mr.
Dalton is also a member of the Board of Directors of ARI Network Services, Inc.,
a provider of standard-based Internet-enabled electronic commerce services, APAC
TeleServices, Inc., a provider of out-sourced telephone-based marketing, sales
and customer management solutions as well as Clark/Bardes Inc., a distributor of
life insurance/compensation programs. Mr. Dalton is also a director of FMI
Funds, Inc.
PATRICK J. ENGLISH*, 38
225 East Mason Street
Milwaukee, Wisconsin
(VICE PRESIDENT AND A DIRECTOR 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 is also Vice President and a director of FMI
Funds, Inc.
TED D. KELLNER*, 52
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 is also a director of FMI Funds,
Inc.
- --------------------
* Messrs. English, Kellner and Wilson are directors who are "interested persons"
of the Fund as that term is defined in the Investment Company Act of 1940
3
<PAGE>
THOMAS W. MOUNT, 67
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*, 55
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 is also a director of FMI Funds, Inc.
GARY G. WAGNER, 55
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.
- --------------------
* Messrs. English, Kellner and Wilson are directors who are "interested persons"
of the Fund as that term is defined in the Investment Company Act of 1940
4
<PAGE>
During the fiscal year ended September 30, 1998 the Fund paid $3,600
in director's fees. For the fiscal year ending September 30, 1999 the Fund's
standard method of compensating directors is to pay each director who is not an
officer of the Fund a fee of $400 for each meeting of the Board of Directors
attended. During the fiscal year ended September 30, 1998 the Fund paid each
director who was not an officer of the Fund a fee of $600 for each meeting of
the Board of Directors attended.
<TABLE>
COMPENSATION TABLE
<CAPTION>
Total
Pension or Compen-
Retirement sation
Benefits Estimated from Fund and
Aggregate Accrued as Annual Complex
Compen- Part of Benefits Paid to
sation from Fund Upon Director(1)
Name of Person Fund Expenses Retirement
-------------- ---- -------- ----------
<S> <C> <C> <C> <C>
Barry K. Allen $1,800 $0 $0 $2,250
George D. Datton 600 0 0 750
Patricia J. English 0 0 0 0
Ted D. Kellner 0 0 0 0
Thomas W. Mount 1,200 0 0 1,500
Donald S. Wilson 0 0 0 0
- ---------------
</TABLE>
(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 October 31, 1998 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.
<TABLE>
Percent
Name and Address Amount and Nature of of
of Beneficial Owner Beneficial Ownership Class
Sole Power Shared Power Aggregate
<S> <C> <C> <C> <C> <C>
Ted D. Kellner 98,985(1) 579,115(2)(3)(4) 678,100 24.97%
225 E. Mason Street
Milwaukee, WI 53202
</TABLE>
5
<PAGE>
<TABLE>
Percent
Name and Address Amount and Nature of of
of Beneficial Owner Beneficial Ownership Class
Sole Power Shared Power Aggregate
<S> <C> <C> <C> <C> <C>
Donald S. Wilson 977 537,775(3)(4) 538,752 19.84%
225 E. Mason Street
Milwaukee, WI 53202
Resource Bank & -0- 174,861 174,861 6.44%
Trust Company
900 Second Avenue South
Minneapolis, MN 55402
Officers & Directors 698.874(1)(2)(3)(4) 25.74%
as a group (7 persons)
</TABLE>
- ----------------------
(1) Includes 16,156 shares held under several custodial accounts
for Mr. Kellner's children and 13,169 shares held by an
investment partnership over which Mr. Kellner has voting and
investment authority.
(2) Includes 41,340 shares held in a trust for which Mr. Kellner
is a co-trustee and co-beneficiary.
(3) Includes 537,775 shares owned by the Adviser, retirement
plans of the Adviser and clients of the Adviser for whom the
Adviser exercises investment discretion.
(4) Messrs. Kellner and Wilson share the power to vote and
dispose of the same 537,775 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 controlled 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 , Ms. Jody Reckard, Vice President and Richard E. Lane, 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, 1998,
1997 and 1996, respectively, the Fund paid the Adviser fees of $447,738,
$416,417 and $407,413 .
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
6
<PAGE>
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, 1998,
1997 and 1996.
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, 1998, 1997 and 1996 the Fund paid the
Adviser fees of $39,849, $42,531 and $37,161 , respectively, pursuant to the
Administration Agreement.
7
<PAGE>
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, Dr. Martin Luther King, Jr. Day,
President's Day, 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 $10,000 at the beginning of the period by 10,000. The net
change in the value of a shareholder account is determined by subtracting
$10,000 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 $10,000. A root equal to the period,
measured in
8
<PAGE>
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:
P(1+T)n = ERV
P = a hypothetical initial payment of $10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $10,000 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
9
<PAGE>
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, 1998, 1997 and 1996 totaled $86,020 on total transactions of $37,386,002,
$87,353 on total transactions of $38,072,430, and $47,786 on total transactions
of $34,328,697 , respectively. All of the brokers to whom commissions were paid
provided research services to the Adviser.
CUSTODIAN
Firstar Bank Milwaukee, 615 East Michigan Street, Milwaukee, Wisconsin
53202, acts as custodian for the Fund. As such, Firstar Bank Milwaukee 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 Bank Milwaukee 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 Mutual Fund Services, LLC, an affiliate
of Firstar Bank Milwaukee, 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, (the "Code"). The
Fund has so qualified in each of the fiscal years. If the fund fails to qualify
as a regulated investment company under Subchapter M in any fiscal year, it will
be treated as a corporation for federal income tax purposes. As such the Fund
would be required to pay income taxes on its net investment income and net
realized capital gains, if any, at the rates generally applicable to
corporations. Shareholders of the Fund would not be liable for income tax on the
Fund's net investment income or net realized capital gains in their individual
capacities. Distributions to shareholders, whether from the Fund's net
investment income or net realized capital gains, would be treated as taxable
dividends to the extent of current or accumulated earnings and profits of the
Fund.
The Fund intends to distribute substantially all of its net investment
income and net capital gain each fiscal year. Dividends from net investment
income, including short-term capital gains, are taxable to investors as ordinary
income, while distributions of net long-term capital gains are taxable as
long-term capital gain regardless of the shareholder's holding period for the
shares. Distributions from the Fund are taxable to investors, whether received
in cash or in additional
10
<PAGE>
shares of the Fund. A portion of the Fund's income distributions may be eligible
for the 70% dividends-received deduction for domestic corporate shareholders.
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 Fund 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.
This section is not intended to be a full discussion of present or
proposed federal income tax laws and the effects of such laws on an investor.
Investors are urged to consult their own tax advisers for a complete review of
the tax ramifications of an investment in the Fund.
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
11
<PAGE>
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
PricewaterhouseCoopers 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.
12
<PAGE>
FINANCIAL STATEMENTS
The following financial statements are herein incorporated by
reference from the Fiduciary Capital Growth Fund, Inc. Annual Report dated
September 30, 1998 (File No. 811-3235), as filed with the Securities and
Exchange Commission through the EDGAR System on November 9, 1998:
Report of Independent Accountants
Statement of Net Assets as of September 30, 1998
Statement of Operations for the year ended
September 30, 1998
Statements of Changes in Net Assets for the years
ended September 30, 1998 and 1997
Financial Highlights
Notes to Financial Statements
13
<PAGE>
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, 1998 (File No. 811-3235) as
filed with the Securities and Exchange Commission on November 9,
1998 in Part B).
Report of Independent Accountants.
Statement of Net Assets as of September 30, 1998.
Statement of Operations for the year ended September 30, 1998.
Statements of Changes in Net Assets for the years ended
September 30, 1998 and 1997 .
Financial Highlights.
Notes to Financial Statements.
(b.) Exhibits
(1) Registrant's Articles of Incorporation, as amended. (3)
(2) Registrant's By-Laws, as amended. (2)
(3) None.
(4) None.
(5) Investment Advisory Agreement. (3)
(6) None.
(7) None.
(8) Custodian Agreement with Firstar Trust Company (predecessor to
Firstar Bank Milwaukee). (3)
(9) Administration Agreement. (3)
(10) Opinion of Foley & Lardner, counsel for Registrant.
S-1
<PAGE>
(11) Consent of PricewaterhouseCoopers LLP.
(12) None.
(13) Subscription Agreement. (3)
(14.1) Individual Retirement Custodial Accounts. (3)
(14.2) Model 403(b) (7) plan. (3)
(14.3) Prototype Defined Contribution Retirement Plan. (3)
(15) None.
(16) Schedule for Computation of Performance Quotations. (1).
(17) Financial Data Schedule.
(18) None.
- --------------------
(1) Previously filed as an exhibit to Post-Effective Amendment No. 16 to
Registrant's Registration Statement on Form N-1A and incorporated by
reference thereto. Amendment No. 16 was filed on January 30, 1996 and
its accession number is 0000897069-96-000014.
(2) Previously filed as an exhibit to Post-Effective Amendment No. 18 to
Registrant's Registration Statement on Form N-1A and incorporated by
reference thereto. Amendment No. 18 was filed on January 28, 1998 and
its accession number is 0000897069-98-000016.
(3) Previously filed as an exhibit to Post-Effective Amendment No. 19 to
Registrant's Registration Statement on Form N-1A and incorporated by
reference thereto. Amendment No. 19 was filed on January 28, 1998 and
its accession number is 0000897069-98-000016.
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 October 31, 1998
-------------- ------------------------
Common Stock, $.01 par value 864
S-2
<PAGE>
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,
S-3
<PAGE>
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.
S-4
<PAGE>
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.
S-5
<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 30th day of November, 1998.
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, November 30, 1998
- ------------------------ Financial and Accounting
Ted D. Kellner Officer and Director
/s/ Barry K. Allen
- ------------------------
Barry K. Allen Director November 30, 1998
- ------------------------
George D. Dalton Director November 30, 1998
/s/ Patrick J. English
- ------------------------
Patrick J. English Director November 30, 1998
- ------------------------
Thomas W. Mount Director November 30, 1998
/s/ Donald S. Wilson
- ------------------------
Donald S. Wilson Director November 30, 1998
S-6
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(1) Registrant's Articles of Incorporation, as amended*
(2) Registrant's By-Laws, as amended*
(3) None
(4) None
(5) Investment Advisory Agreement*
(6) None
(7) None
(8) Custodian Agreement with Firstar Trust Company
(predecessor to Firstar Bank Milwaukee)*
(9) Administration Agreement*
(10) Opinion of Foley & Lardner, counsel for Registrant
(11) Consent of PricewaterhouseCoopers LLP
(12) None
(13) Subscription Agreement*
(14.1) Individual Retirement Custodial Accounts*
(14.2) Model 403(b)(7) plan*
(14.3) Prototype Defined Contribution Retirement Plan*
(15) None
(16) Schedule for Computation of Performance Quotations*
(17) Financial Data Schedule
(18) None
- ---------------
* Incorporated by reference.
EXHIBIT 10
CHICAGO FIRSTAR CENTER SACRAMENTO
DENVER 777 EAST WISCONSIN AVENUE SAN DIEGO
JACKSONVILLE MILWAUKEE, WISCONSIN 53202-5367 SAN FRANCISCO
LOS ANGELES TELEPHONE (414) 271-2400 TALLAHASSEE
MADISON FACSIMILE (414) 297-4900 TAMPA
MILWAUKEE WASHINGTON, D.C.
ORLANDO WEST PALM BEACH
WRITER'S DIRECT LINE
EMAIL ADDRESS CLIENT/MATTER NUMBER
030825/0101
November 30, 1998
Fiduciary Capital Growth Fund, Inc.
225 East Mason Street
Milwaukee, Wisconsin 53202
Gentlemen:
We have acted as counsel for you in connection with the preparation of
an Amended Registration Statement on Form N-1A relating to the sale by you of an
indefinite amount of Fiduciary Capital Growth Fund, Inc. Common Stock, $.01 par
value (such Common Stock being hereinafter referred to as the "Stock") in the
manner set forth in the Registration Statement to which reference is made. In
this connection we have examined: (a) the Amended Registration Statement on Form
N-1A; (b) your Articles of Incorporation and By-Laws, as amended to date; (c)
corporate proceedings relative to the authorization for issuance of the Stock;
and (d) such other proceedings, documents and records as we have deemed
necessary to enable us to render this opinion.
Based upon the foregoing, we are of the opinion that the shares of
Stock when sold as contemplated in the Amended Registration Statement will be
legally issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an Exhibit to the
Amended Registration Statement on Form N-1A. In giving this consent, we do not
admit that we are experts within the meaning of Section 11 of the Securities Act
of 1933, as amended, or within the category of persons whose consent is required
by Section 7 of said Act.
Very truly yours,
/s/ Foley & Lardner
FOLEY & LARDNER
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. 20 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated October 27, 1998, relating to the
financial statements and financial highlights appearing in the September 30,
1998 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/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
November 24, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 41,423
<INVESTMENTS-AT-VALUE> 39,065
<RECEIVABLES> 30
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 39,095
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 48
<TOTAL-LIABILITIES> 48
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,426
<SHARES-COMMON-STOCK> 2,111
<SHARES-COMMON-PRIOR> 1,985
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,979
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,358)
<NET-ASSETS> 39,047
<DIVIDEND-INCOME> 420
<INTEREST-INCOME> 139
<OTHER-INCOME> 0
<EXPENSES-NET> 590
<NET-INVESTMENT-INCOME> (31)
<REALIZED-GAINS-CURRENT> 10,326
<APPREC-INCREASE-CURRENT> (18,869)
<NET-CHANGE-FROM-OPS> (8,573)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 25
<DISTRIBUTIONS-OF-GAINS> 7,692
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 107
<NUMBER-OF-SHARES-REDEEMED> 314
<SHARES-REINVESTED> 333
<NET-CHANGE-IN-ASSETS> (13,631)
<ACCUMULATED-NII-PRIOR> 25
<ACCUMULATED-GAINS-PRIOR> 7,376
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 448
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 590
<AVERAGE-NET-ASSETS> 49,701
<PER-SHARE-NAV-BEGIN> 26.53
<PER-SHARE-NII> (.02)
<PER-SHARE-GAIN-APPREC> (4.15)
<PER-SHARE-DIVIDEND> .01
<PER-SHARE-DISTRIBUTIONS> 3.86
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 18.49
<EXPENSE-RATIO> 1.2
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
