<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Fortis Growth Fund, Inc.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
(specify)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] $125 per Exchange Act Rules O-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and O-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
[Fortis Letterhead]
Fortis Growth Fund, Inc.
July 19, 2000
Dear Fortis Growth Fund shareholder:
As a shareholder of Fortis Growth Fund (the "Fund"), we are requesting
your participation in a special meeting of shareholders that will be held on
Thursday, August 24, 2000 at 10:00 a.m. The meeting will be held at the offices
of the Fund, 500 Bielenberg Drive, Woodbury, Minnesota. Please read the enclosed
materials carefully and return your completed proxy card in the envelope that
has been provided, or use the phone or Internet voting alternatives described in
the enclosed insert, as promptly as possible. You may also receive a telephone
call from Shareholder Communication Corporation, a proxy solicitation firm,
asking for your support on the voting items. Please remember that the costs of
solicitation are being paid by the Fund. Therefore, your prompt action will
reduce the time and expense of further solicitation.
Besides electing the Fund's directors and approving the Fund's
independent public accountant, you are being asked to approve the elimination or
modification of certain investment policies. Some of the Fund's policies were
adopted in response to state laws that no longer apply to mutual funds. Because
these policies, in the opinion of Fund management, are unnecessarily restrictive
in light of modern investment practices, Fund management proposes that the
Fund's investment policies be modernized, and that some policies be eliminated.
There is no present intention to significantly change the investment operations
of the Fund as a result of the proposed policy revisions. However, the Fund
intends to lend its portfolio securities and invest in options if the policies
currently prohibiting these practices are revised. You should note that any
material changes in the investment strategies of the Fund will be disclosed in
the Fund's prospectus and statement of additional information, or in supplements
to these documents. Beginning on page 5 of the Proxy Statement, the proposed
changes are explained in great detail. Unfortunately, the descriptions are
lengthy and technical in their language. However, we have attempted to summarize
the history behind, and reasons for, these changes as well as their potential
risks. Although there is some risk in all forms of investment, we believe that
these risks are reasonable in light of the overall benefits that will be derived
from the modernization of the Fund's policies. You should also note that many
other funds, including the other Fortis Funds, have made similar changes to
their investment policies and restrictions. In order to remain competitive in
the marketplace we believe that the Fund must also make these changes.
The Fund's Board of Directors has reviewed and approved each of the
above proposals and recommends that you vote FOR each proposal. Because these
items require the approval of a majority of the Fund's shares, it is important
that we receive your vote. If you have any questions in connection with these
materials please call us at 1-800-800-2000, extension 3012.
Very truly yours,
/s/ Dean C. Kopperud
Dean C. Kopperud
President
<PAGE>
FORTIS GROWTH FUND, INC.
500 Bielenberg Drive, Woodbury, Minnesota 55125
Mailing Address: P.O. Box 64284, St. Paul, Minnesota 55164
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 24, 2000
Fortis Growth Fund, Inc. (the "Fund") will hold a Special Meeting of
Shareholders at the offices of Fortis Advisers, Inc. ("Advisers"), 500
Bielenberg Drive, Woodbury, Minnesota, on Thursday, August 24, 2000, at 10:00
a.m. for the following purposes:
1. To set the number of directors at eleven and to elect a Board of
Directors.
2. To approve the elimination or modification of certain investment
policies.
3. To ratify the selection by the Board of Directors of the Fund of KPMG
LLP as independent public accountants for the Fund for the fiscal
years ending August 31, 2000 and 2001.
4. To transact any other business properly brought before the meeting.
The Fund's Board of Directors unanimously recommends approval of each item
listed on this Notice of Special Meeting of Shareholders.
Only shareholders of record as of the close of business on July 5, 2000 may
vote at the meeting or any adjournment(s) of the meeting.
YOU CAN VOTE EASILY AND QUICKLY BY TOLL-FREE TELEPHONE CALL, INTERNET OR BY
MAIL. JUST FOLLOW THE INSTRUCTIONS THAT APPEAR ON YOUR ENCLOSED PROXY CARD.
PLEASE HELP THE FUND AVOID THE COST OF A FOLLOW-UP MAILING BY VOTING TODAY.
/s/ Michael J. Radmer
Michael J. Radmer
Secretary
Dated: July 19, 2000
<PAGE>
FORTIS GROWTH FUND, INC.
500 Bielenberg Drive, Woodbury, Minnesota 55125
Mailing Address: P.O. Box 64284, St. Paul, Minnesota 55164
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS -- AUGUST 24, 2000
The Board of Directors of Fortis Growth Fund, Inc. (the "Fund") is
soliciting the enclosed proxy in connection with a special meeting of
shareholders to be held August 24, 2000, and any adjournment of the
meeting.
The Fund's investment adviser and manager is Fortis Advisers, Inc.
("Advisers"). Fortis Investors, Inc. ("Investors") is the Fund's principal
underwriter. Both Advisers and Investors are located at 500 Bielenberg Drive,
Woodbury, Minnesota 55125.
The Fund will pay all costs of solicitation, including the cost of
preparing and mailing the Notice of Special Shareholders Meeting and this Proxy
Statement. Representatives of Advisers, without cost to the Fund, may solicit
proxies by means of mail, telephone, or personal calls. Advisers may also
arrange for an outside firm, Shareholder Communication Corporation ("SCC"), to
solicit shareholder votes by telephone on the Fund's behalf. The services
provided by SCC are expected to cost the Fund approximately $68,500.
In order for the shareholder meeting to go forward, there must be a quorum.
This means that at least 10% of the Fund's shares must be represented at the
meeting -- either in person or by proxy. All returned proxies count toward a
quorum, regardless of how they are voted. An abstention or a vote withheld will
be counted as shares present at the meeting in determining whether a proposal
has been approved, and will have the same effect as a vote "against" the
proposal. Broker non-votes will not be counted as present in calculating the
vote on any proposal. (Broker non-votes are shares for which (i) the underlying
owner has not voted and (ii) the broker holding the shares does not have
discretionary authority to vote on the particular matter.) If a quorum is not
obtained or if sufficient votes to approve any of the proposals are not
received, the persons named as proxies may propose one or more adjournments of
the meeting to permit further solicitation of proxies. In determining whether to
adjourn the meeting, the following factors may be considered: the nature of the
proposal; the percentage of votes actually cast; the percentage of negative
votes actually cast; the nature of any further solicitation; and the information
to be provided to shareholders with respect to the reasons for the solicitation.
Any adjournment will require a vote in favor of the adjournment by the holders
of a majority of the shares present in person or by proxy at the meeting (or any
adjournment of the meeting).
You may revoke your proxy at any time up until voting results are announced
at the shareholder meeting. You can do this by writing to the Fund's Secretary,
or by voting in person at the meeting and notifying the election judge that you
are revoking your proxy. In addition, you can revoke a prior proxy simply by
voting again -- the proxy last received by the Fund at the time of the meeting
will effectively revoke any previous proxy received. For those initially voting
by either telephone or Internet, follow the same instructions found on your
original proxy card to vote again. If you originally voted by mail, or otherwise
need a new proxy, please call the Fund at 1-800-800-2000, extension 3012, and a
new proxy will be sent to you. If you return an executed proxy card without
instructions, your shares will be voted "for" each proposal.
Only shareholders of record on July 5, 2000 may vote at the meeting or any
adjournment of the meeting. On that date the Fund had 35,087,972 shares of
common stock issued and outstanding. Each shareholder is entitled to one vote
for each share owned on the record date. None of the matters to be presented at
the meeting will entitle any shareholder to cumulative voting or appraisal
rights.
At this point, we know of no other business to be brought before the
shareholder meeting. However, if any other matters arise, the persons named
as proxies will vote upon these matters according to their best judgment.
The Fund's most recent annual and semiannual reports are available at no
cost. To request a report, please contact the Fund at P.O. Box 64284, St. Paul,
Minnesota 55164 or call 1-800-800-2000, extension 4579 and one will be sent by
first class mail within three business days of your request.
Please be sure to read the entire proxy statement before casting your
vote. This proxy statement and the proxy cards were first mailed to shareholders
on or about July 19, 2000.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
At the meeting, you will be asked to elect the nominees listed below to the
Fund's Board of Directors, and to thereby set the number of Directors at eleven.
The Bylaws of the Fund provide that the shareholders have the power to set the
number of Directors (subject to the authority of the Board of Directors to
increase or decrease the number as permitted by law).
Each person elected will serve until the next meeting of the shareholders
or until his or her successor is elected. Information regarding each nominee's
principal occupation and business experience during the past five years is set
forth below. Unless otherwise indicated, all positions have been held more than
five years. Except where noted, each nominee also serves as a Director of each
of the other open-end investment companies managed by Advisers and as a Director
of Fortis Securities, Inc., a closed-end investment company managed by Advisers.
<TABLE>
<CAPTION>
Principal Occupation/Business
Name, Term of Office Age Experience During Past 5 Years
-------------------- --- ------------------------------
<S> <C> <C>
Richard W. Cutting 69 Certified public accountant and financial consultant.
Director since 1993
Allen R. Freedman* 59 Chairman of Fortis, Inc.; a Managing Director of Fortis
Director since 1987 International, N. V.
Dr. Robert M. Gavin 59 President, Cranbrook Education Community; prior to July 1996,
Director since 1986 President, Macalester College, St. Paul, MN.
Jean L. King 55 President, Communi-King, a communications consulting firm, St.
Director since 1984 Paul, MN.
Dean C. Kopperud * 47 Chief Executive Officer and a Director of Advisers, President
Director since 1995 and a Director of Investors, President of Fortis Financial
Group, a Director of Fortis Benefits Insurance Company and a
Senior Vice President of Time Insurance Company.
Phillip O. Peterson 55 Mutual fund industry consultant; Partner of KPMG LLP, through
Director since 2000 June 1999.
Robb L. Prince 58 Financial and Employee Benefit Consultant; prior to July 1995,
Director since 1982 Vice President and Treasurer, Jostens, Inc., a producer of
products and services for the youth, education, sports award, and
recognition markets, Minneapolis, MN.
Leonard J. Santow 63 Principal, Griggs & Santow, Incorporated, economic and financial
Director since 1972 consultants, New York, NY.
Noel F. Schenker 45 Marketing consultant; prior to 1996, Senior Vice President,
Director since 1996 Marketing and Strategic Planning, Rollerblade, Inc.
Dr. Lemma W. Senbet** 53 Consultant, international financial institutions, The William E.
New nominee Mayer Professor of Finance and Chair, Finance Department,
University of Maryland, College Park, MD.
Joseph M. Wikler 58 Investment consultant and private investor.
Director since 1994
</TABLE>
-------------------
* Denotes directors who are considered to be "interested persons" (as defined
under the 1940 Act) of the Fund. Mr. Kopperud is an interested person
because he holds certain positions including serving as Chief Executive
Officer and a director of Advisers. Mr. Freedman is an interested person
because he holds certain positions including serving as Chairman of Fortis,
Inc., the parent company of Advisers, and a Managing Director of Fortis
International, N.V.
** Dr. Lemma W. Senbet is a director of Fortis Series Fund, Inc. and Fortis
Securities, Inc. and is an "advisory" director of other open-end investment
companies managed by Advisers.
-2-
<PAGE>
The Fund has an Audit Committee of the Board of Directors whose members are
selected annually by the full Board of Directors. The Audit Committee currently
consists of Ms. King, Mr. Peterson, Mr. Wikler and Mr. Cutting, who serves as
its chairperson. The Audit Committee met two times during the fiscal year ended
August 31, 1999. The Fund does not have a standing compensation committee or a
standing nominating committee of the Board of Directors.
The functions performed by the Audit Committee are to recommend annually to
the Board a firm of independent certified public accountants to audit the books
and records of the Fund for the ensuing year; to monitor that firm's
performance; to review with the firm the scope and results of each audit and
determine the need, if any, to extend audit procedures; to confer with the firm
and representatives of the Fund on matters concerning the Fund's financial
statements and reports, including the appropriateness of its accounting
practices and of its financial controls and procedures; to evaluate the
independence of the firm; to review procedures to safeguard portfolio
securities; to review the purchase by the Fund from the firm of nonaudit
services; to review all fees paid to the firm; and to facilitate communications
between the firm and the Fund's officers and directors.
During the Fund's fiscal year ended August 31, 1999, there were four
meetings of the Board of Directors. No director attended fewer than 75% of the
aggregate of the number of meetings of the Board of Directors and the number of
meetings held by all committees of the Board on which such director served.
No compensation is paid by the Fund to any Director or officer who is an
officer or employee of Advisers or Investors or any affiliated company. The Fund
pays each Director who is not affiliated with Advisers or Investors a quarterly
fee of $850 and a fee of $100 for each Directors' meeting and each committee
meeting attended. Each Director also receives a quarterly fee, a meeting fee and
a committee meeting fee from each fund in the Fund Complex for which they are a
Director. The following table sets forth the compensation received by each
director from the Fund during the fiscal year ended August 31, 1999, as well as
the total compensation received by each director from the Fund Complex during
the calendar year ended December 31, 1999. Messrs. Freedman, Kopperud, Peterson
and Senbet did not receive any such compensation and they are not included in
the table.
Aggregate Compensation Total Compensation
Director from the Fund from Fund Complex *
-------------------- ---------------------- -------------------
Richard W. Cutting $4,600 $31,250
Dr. Robert M. Gavin $4,600 $31,250
Jean L. King $4,400 $29,250
Robb L. Prince $4,600 $31,250
Leonard J. Santow $4,478 $33,850
Noel F. Schenker $4,600 $26,150
Joseph M. Wikler $4,600 $34,750
* The Fund Complex consists of one closed-end and eight open-end
investment companies managed by Advisers.
Vote Required
The Board of Directors recommends that shareholders set the number of
directors at eleven and vote in favor of the above nominees to serve as
Directors of the Fund. The vote of a majority of the shares of the Fund
represented at the meeting, provided at least a quorum is represented in person
or by proxy, is sufficient for the election of the above nominees. Unless
otherwise instructed, the proxies will vote for the above eleven nominees. All
of the nominees listed above have consented to being named in the proxy
statement and to serve as Directors if elected. In the event any of the above
nominees are not candidates for election at the meeting, the proxies may vote
for such other persons as management may designate. Nothing currently indicates
that such a situation will arise.
-3-
<PAGE>
PROPOSAL TWO
THE ELIMINATION OR MODIFICATION
OF FUNDAMENTAL INVESTMENT POLICIES
The Fund has a number of investment policies that are "fundamental," which
means that they may be changed only with the approval of shareholders. Since the
Fund began operations in 1958, there have been substantial changes in the
securities markets and in the Federal and state securities laws applicable to
investment companies. The Fund currently has certain fundamental investment
policies that are not required under current law and others that are more
restrictive than required. Because these policies preclude the Fund from taking
full advantage of the investment opportunities available to it, the Board of
Directors is proposing that they be revised or eliminated.
The 1940 Act requires all mutual funds to have fundamental policies
regarding certain activities, such as borrowing money or issuing senior
securities. The Board of Directors has proposed that these required policies be
revised to provide the Board with the maximum flexibility permitted under the
1940 Act. The Board of Directors has also recommended that shareholders approve
the elimination of all fundamental policies that are not required by the 1940
Act.
There is no present intention to significantly change the investment
operations of the Fund as a result of the proposed fundamental policy revisions,
except the Fund intends to lend its portfolio securities and invest in options
if the policies currently prohibiting these practices are revised. The Board
believes, however, that it would be in the best interests of the Fund and its
shareholders for the Fund to have the flexibility to modify certain investment
activities without first having to obtain shareholder approval. As explained
below, the proposed revisions to and eliminations of fundamental policies will
provide the Fund with this flexibility. You should note that any changes in the
investment strategies of the Fund would be disclosed in the Fund"s prospectus
and statement of additional information, or in supplements to those
documents.
A. Modify the Policy Regarding Borrowing
It is proposed that the Fund replace its current policy regarding
borrowing, listed below on the left, with the proposed policy listed on the
right.
Current Policy Proposed Policy
-------------- ---------------
The Fund will not borrow money The Fund will not borrow money or issue
or issue debt securities. senior securities, except as permitted
under the Investment Company Act of 1940,
as amended, and as interpreted or
modified from time to time by any
regulatory authority having jurisdiction.
The Board believes that the Fund's current policy regarding borrowing is
unnecessarily restrictive and could be disadvantageous to shareholders. The
addition of borrowing power will provide the Fund with greater flexibility to
respond to sudden needs for cash that may arise and that cannot be anticipated.
Ordinarily, the Fund would expect to be able to meet needs for cash to
facilitate redemptions by using current cash flow arising from new investments,
investment income, and liquidations of securities in the ordinary course of
business. However, there may be instances when these sources of cash flow are
not sufficient to meet current cash needs, in which case the ability to borrow
money may be advantageous to the Fund.
The proposed policy would permit the Fund to engage in borrowing in a
manner and to the full extent permitted by applicable law. The 1940 Act requires
borrowings, including any borrowing through reverse repurchase agreements, to
have 300% asset coverage, which means, in effect, that the Fund would be
permitted to borrow up to an amount equal to one-third of the value of its total
assets under the proposed borrowing policy. This asset coverage requirement
applies at all times, and not just at the time of borrowing.
-4-
<PAGE>
All borrowing involves risks. Interest paid by the Fund on borrowed funds
would decrease the net earnings of the Fund. In addition, if the Fund were to
incur debt to purchase additional securities, a practice known as "leveraging,"
the Fund would incur a loss unless the income or gain on such investment
exceeded the interest payable with respect to the borrowing. Borrowing for
leverage would increase the Fund's volatility and the risk of loss in a
declining market. However, the Board has no current intention of authorizing the
Fund to borrow for leverage purposes. As a nonfundamental investment
restriction, the Fund will not acquire any new securities while borrowings
exceed 5% of total assets.
The proposed policy also prohibits the Fund from issuing senior securities,
except as permitted by applicable law. The current policy prohibits only the
issuance of debt securities, which constitute a type of senior security. In
addition to debt securities, however, senior securities include any obligation
of a fund that takes priority over the claims of the fund's shareholders. The
1940 Act prohibits open-end funds from issuing most types of senior securities,
but permits them, if specified conditions are met, to enter into certain
transactions that might be considered to involve the issuance of senior
securities. For example, a fund may enter into a transaction that obligates it
to pay money at a future date, such as purchasing securities on a when-issued
basis or entering into a reverse repurchase agreement, if cash or liquid
securities are set aside to cover the obligation. These types of transactions
are permitted under the Fund's current policy and would continue to be permitted
under the proposed policy.
B. Modify the Policy Regarding Concentration in a Particular Industry
It is proposed that the Fund replace its current policy regarding
concentration in a particular industry, listed below on the left, with the
proposed policy listed on the right.
Current Policy Proposed Policy
-------------- ---------------
The Fund will not concentrate its The Fund will not concentrate its
investments, that is, invest more investments in a particular industry, as
than 25% of the value of its assets that term is used in the Investment
in any particular industry. Company Act of 1940, as amended, and as
interpreted or modified from time to
time by any regulatory authority having
jurisdiction. For purposes of this
limitation, the U.S. Government, and
state or municipal governments and
their political subdivisions are not
considered members of any industry.
The 1940 Act requires that the Fund state its position regarding
concentration in an industry. While the 1940 Act does not define what
constitutes "concentration," the staff of the Securities and Exchange Commission
(the "Commission") takes the position that investment of 25% or more of a fund's
assets in an industry constitutes concentration. If a fund concentrates in an
industry, it must at all times have 25% or more of its assets invested in that
industry, and if its policy is not to concentrate, as is the case with the Fund,
it must invest less than 25% of its assets in the applicable industry, unless,
in either case, the fund discloses the specific conditions under which it will
change from concentrating to not concentrating or vice versa.
The Fund's current policy provides that the Fund will not "concentrate its
investments, that is, invest more than 25% of the value of its assets in any
particular industry." The proposed policy does not materially change the Fund's
current policy. However, rather than defining concentration, as the current
policy does, the proposed policy states that the Fund will not concentrate in
any industry, as the term "concentration" is interpreted from time to time. This
will provide the Fund with more flexibility should the staff of the Commission
reinterpret the term "concentration." The proposed policy also clarifies that
U.S., state and local governments are not considered members of any industry.
-5-
<PAGE>
C. Modify the Policy Regarding the Underwriting of Securities
It is proposed that the Fund replace its current policy regarding the
underwriting of securities, listed below on the left, with the proposed policy
listed on the right.
Current Policy Proposed Policy
-------------- ---------------
The Fund will not act as an The Fund will not act as an underwriter
underwriter of securities of other of securities of other issuers, except to
issuers, except that the Fund may the extent that, in connection with the
invest up to 5% of the value of its disposition of portfolio securities, it
assets (at the time of investment) may be deemed an underwriter under
in portfolio securities which the applicable laws.
Fund might not be free to sell to
the public without registration of
such securities under the
Securities Act of 1933.
An underwriter of securities is defined under the Securities Act of 1933 as
a person who purchases securities from an issuer with a view to, or offers or
sells for an issuer in connection with, distributing the securities. Sales of
securities by persons deemed to be underwriters require registration under the
Securities Act. In addition, underwriters may be subject to certain liabilities
under the Securities Act in connection with sales of securities.
The Fund's current policy was designed to clarify that the Fund will not be
deemed to be an underwriter of securities merely because it purchases
unregistered securities in a private placement ("restricted securities") and
then later resells these securities. Historically, the issue of whether a
purchaser should be considered an underwriter frequently arose in instances
where persons bought restricted securities and later wished to resell them.
Therefore, when the Fund was initially registered, the investment restriction
was drafted to clarify that the Fund would not be deemed an underwriter merely
because it bought and later resold restricted securities. The Board does not
believe that this proviso is necessary, however, since Rule 144 under the
Securities Act of 1933 provides a safe harbor pursuant to which restricted
securities can be resold without raising the statutory underwriter issue. In
addition, the purchase and later resale of restricted securities will be
encompassed by the more general language in the proposed policy stating that the
Fund will not underwrite securities except to the extent that it may be
considered an underwriter when selling portfolio securities.
The current policy also was designed to limit the Fund's investments in
illiquid securities, since restricted securities historically were considered
illiquid. However, a fairly liquid and efficient institutional resale market for
restricted securities has developed in recent years, and restricted securities
are no longer necessarily illiquid. Therefore, the Board has determined that
there should be no limitation imposed upon the total value of restricted
securities purchased by the Fund. As discussed below in Section I, the Board
believes that the Fund and its shareholders are adequately protected by the
Commission's current policy that restricts the Fund's investments in illiquid
securities to 15% of its net assets.
D. Modify the Policy Regarding Investments in Real Estate
It is proposed that the Fund replace its current policy regarding
investment in real estate, listed below on the left, with the proposed policy
listed on the right.
Current Policy Proposed Policy
-------------- ---------------
The Fund will not purchase or sell The Fund will not purchase or sell real
real estate or other interests in estate unless acquired as a result of
real estate, or interests in real ownership of securities or other
estate investment trusts. instruments, but this shall not prevent
the Fund from investing in securities or
other instruments backed by real estate
or interests therein or in securities of
companies that deal in real estate or
mortgages.
-6-
<PAGE>
Both the current and proposed policy prohibit direct investments in real
estate. The proposed policy clarifies, however, that investments in securities
backed by real estate or issued by companies that deal in real estate are
permissible. In addition, investments in real estate investment trusts, which
are expressly prohibited under the current policy, would be permissible under
the proposed policy. The Fund has no current intention, however, of investing
in real estate investment trusts. To the extent that the Fund buys securities
and instruments of companies in the real estate business, the Fund's performance
will be affected by the condition of the real estate market. This industry is
sensitive to factors such as changes in real estate values and property taxes,
overbuilding, variations in rental income, and interest rates. Performance could
also be affected by the structure, cash flow, and management skill of real
estate companies.
E. Modify the Policy Regarding the Purchase of Commodities
It is proposed that the Fund replace its current policy regarding the
purchase of commodities, listed below on the left, with the proposed policy
listed on the right.
Current Policy Proposed Policy
-------------- ---------------
The Fund will not buy or sell The Fund will not purchase physical
commodities or commodity contracts. commodities or contracts relating to
physical commodities.
The 1940 Act requires a mutual fund to state as a fundamental investment
policy the extent to which it may engage in the purchase and sale of
commodities. At the time the 1940 Act was enacted, the term "commodities" was
understood to refer principally to physical commodities such as agricultural
products, precious and base metals, oil and gas, and the like. In recent years,
however, a variety of new financial contracts and instruments, such as interest
rate, currency and stock index futures contracts, have been created which may be
considered to be "commodities" for regulatory purposes. Because the Fund's
current policy could be interpreted by regulatory authorities as prohibiting the
Fund from investing in these instruments, the Fund has considered itself
precluded from making such investments. The purpose of the proposed change is to
clarify that while the Fund is not permitted to invest in physical commodities
or contracts relating to physical commodities, it may invest in financial
contracts and instruments that might be categorized as commodities. With
shareholder approval of the proposed change, the Fund intends to invest in
futures contracts, options on futures contracts or similar instruments. The
Fund's investment in these instruments will be limited to the extent that the
amount of premiums paid for all options, initial margin deposits on all futures
contracts and/or options on futures contracts, and collateral deposited with
respect to forward contracts held by or entered into by the Fund will not exceed
5% of the value of the total assets of the Fund; or that the Fund's assets
covering, subject to, or committed to all options, futures and forward contracts
will not exceed 20% of the value of the total assets of the Fund. These
limitations could be modified in the future by the Fund's Board of Directors
without shareholder approval.
Futures contracts are standardized, exchange-traded contracts that require
delivery of the underlying financial instrument (such as a bond, currency or
stock index) at a specified price, on a specified future date. The buyer of the
futures contract agrees to buy the underlying financial instruments from the
seller at a fixed purchase price upon the expiration of the contract. The seller
of the futures contract agrees to sell the underlying financial instrument to
the buyer at expiration at the fixed sales price. In most cases, delivery never
takes place. Instead, both the buyer and the seller, acting independently of
each other, usually liquidate their long and short positions before the contract
expires; the buyer sells futures and the seller buys futures.
Futures may be used for hedging (i.e., to protect against adverse future
price movements in portfolio securities, or in securities a fund intends to
purchase). For example, a portfolio manager who thinks that the stock market
might decline could sell stock index futures to safeguard a fund"s portfolio. If
the market declines as anticipated, the value of stocks in the portfolio would
decrease, but the value of the futures contracts would increase. Futures
-7-
<PAGE>
contracts may also be used to speculate on the market. For example, a portfolio
manager might buy stock index futures on the expectation that the value of the
particular index will rise, even though the stocks comprising the index are
unrelated to stocks held in the portfolio or that the portfolio manager intends
to purchase. Using futures for speculation, however, involves significant risk
since futures contracts are highly leveraged instruments. When a portfolio
manager enters into a futures contract, the manager needs to put up only a small
fraction of the value of the underlying contract as collateral, yet gains or
losses will be based on the full value of the contract.
The use of futures contracts, options on futures contracts and similar
instruments would expose the Fund to additional investment risks and transaction
costs. Risks include: the risk that interest rates, securities prices or
currency markets will not move in the direction that the investment adviser
anticipates; an imperfect correlation between the price of the instrument and
movements in the prices of any securities or currencies being hedged; the
possible absence of a liquid secondary market for any particular instrument and
possible exchange-imposed price fluctuation limits; leverage risk, which is the
risk that adverse price movements in an instrument can result in a loss
substantially greater than the Fund's initial investment in that instrument; and
the risk that the counterparty to an instrument will fail to perform its
obligations.
F. Modify the Policy Regarding Lending
It is proposed that the Fund replace its current policy regarding lending,
listed below on the left, with the proposed policy listed on the right.
Current Policy Proposed Policy
-------------- ---------------
The Fund will not make loans to The Fund may not make loans except as
other persons, except that it may permitted under the Investment Company
purchase bonds, debentures, or Act of 1940, as amended, and as
other debt securities that are not interpreted or modified from time to
publicly distributed in an amount time by any regulatory authority having
not to exceed 5% of the value of jurisdiction.
its total assets. The purchase of
a portion of an issue of publicly
distributed bonds, debentures, or
other debt securities does not
constitute the making of a loan.
The proposed policy permits the Fund to lend in a manner and to the extent
permitted by applicable law. The proposed policy does not contain any
restriction on the Fund's investments in bonds, debentures or other debt
securities that are not publicly distributed. The current policy limiting such
investments was designed to limit the Fund's investments in illiquid securities.
The Board believes, however, that Fund shareholders are adequately protected in
that regard by the Commission's current restriction on investments in illiquid
securities discussed below in Section I.
The proposed policy would permit the Fund, subject to Board oversight, to
lend its securities. Currently, the maximum amount that the Fund could lend
under the 1940 Act would be portfolio securities equal to one-third of the value
of the Fund's total assets. Lending of portfolio securities would involve risks,
including risks of delay in recovery of the loaned securities or even loss of
rights in collateral received in the loan transaction should the borrower of the
securities fail financially. The proposed policy would also permit the Fund,
subject to the receipt of any necessary regulatory approval (which cannot be
guaranteed) and Board authorization, to enter into other lending arrangements,
including lending agreements under which the Fund could for temporary purposes
lend money directly to and borrow money directly from other funds advised by
Advisers through a credit facility.
Although the Fund does not intend to use lending as a principal investment
strategy, the Board believes that it would be in shareholders' best interests
for the Fund to have the maximum flexibility regarding the use of lending. The
practice of lending securities could generate income for the Fund that would be
utilized to offset expenses. In addition, inter-fund lending arrangements could
possibly reduce the Fund's borrowing costs and enhance its ability to earn
higher rates of interest on available cash.
-8-
<PAGE>
G. Eliminate the Policy Prohibiting the Pledging of Assets
It is proposed that the following fundamental policy of the Fund be
eliminated:
The Fund will not mortgage, pledge, hypothecate, or in any manner transfer,
as security for indebtedness, any securities owned or held by the Fund.
Funds are not required to adopt fundamental policies regarding the pledging
of assets. However, the Fund adopted this fundamental investment policy as a
counterpart to its fundamental policy prohibiting borrowing. As discussed above
in the proposal regarding borrowing, the Board believes that it is in the Fund's
best interests to have the ability to borrow. Similarly, the Board believes that
it is in the Fund's best interest to be able to pledge assets to the extent
necessary to secure such borrowing. The Board further believes that limitations
on the Fund's ability to pledge its assets are unnecessary since, even if the
Fund is not restricted in its ability to pledge assets, it is limited in its
ability to borrow by the 1940 Act. Therefore, the Board is recommending that the
above policy be eliminated.
Pledging assets does entail certain risks. To the extent that the Fund
pledges its assets, the Fund may have less flexibility in liquidating its
assets. If a large portion of the Fund's assets are involved, its ability to
meet redemption requests or other obligations could be delayed. The Board
intends to adopt a nonfundamental policy providing that the Fund may mortgage,
pledge or hypothecate its assets only to secure permitted borrowings. Collateral
arrangements with respect to futures contracts and certain options transactions
will not be considered pledges by the Fund and will not be restricted. This
policy could be amended or eliminated in the future without shareholder
approval.
H. Eliminate the Policy Prohibiting Margin Purchases and Short Sales of
Securities
It is proposed that the following fundamental policy of the Fund be
eliminated:
The Fund may not purchase or sell securities on margin or sell short.
The Fund adopted this policy in order to comply with state securities laws
that no longer apply. The Board believes that the portion of the policy
prohibiting the purchase of securities on margin is not necessary since the
Fund's ability to engage in margin transactions is limited by the 1940 Act.
Margin transactions involve the purchase of securities with money borrowed from
a broker, with cash or eligible securities being used as collateral against the
loan. The Fund's potential use of margin transactions beyond transactions in
futures and options and for the clearance of purchases and sales of securities,
including the use of margin in ordinary securities transactions, will generally
be limited by the current position taken by the staff of the Commission that
margin transactions with respect to securities are prohibited under the 1940 Act
because they create senior securities. The Fund's ability to engage in margin
transactions is also limited by the restrictions on borrowing imposed by the
1940 Act.
The Board believes that the portion of the policy prohibiting short sales
of securities is not necessary because the Fund will be limited in its ability
to sell securities short by the restrictions on the issuance of senior
securities imposed by the 1940 Act. A short sale is made by selling a security
the Fund does not own. A short sale is "against the box" if the Fund
contemporaneously owns, or has the right to obtain at no added cost, securities
identical to those sold short. The Commission staff has taken the position that
a short sale, other than a short sale against the box, involves the creation of
a senior security, and violates the 1940 Act prohibition on the issuance of
senior securities unless a fund sets aside cash or liquid securities in an
amount equal to the current value of the securities sold short.
-9-
<PAGE>
Should shareholders vote to eliminate the current fundamental policy, the
Board intends to adopt nonfundamental policies providing that (a) the Fund may
not make short sales of securities, other than short sales "against the box,"
and (b) the Fund may not purchase securities on margin, but it may obtain such
short-term credits as it needs for the clearance of securities transactions and
it may make margin deposits in connection with futures contracts and options on
futures contracts. These policies could be amended or eliminated in the future
without shareholder approval.
I. Eliminate the Policy Limiting Investments in Restricted Securities
It is proposed that the following fundamental policy of the Fund be
eliminated:
The Fund will not invest more than 5% of its net assets in each of (i)
restricted securities and (ii) bonds, debentures or other debt securities
that are not publicly distributed.
The Fund's policy regarding investments in restricted securities and debt
securities which are not publicly distributed was designed to assure that the
Fund's portfolio would consist primarily of securities that are readily
marketable, and that the Fund would therefore be able to make timely payment for
redeemed shares. However, the policy is more restrictive than the Commission's
current policy, which permits mutual funds to invest up to 15% of their net
assets in illiquid securities (10% for money market funds). The Commission
determined that these standards should satisfactorily assure that mutual funds
will be able to make timely payment for redeemed shares. In addition, some
restricted securities are no longer necessarily illiquid, and may in fact be
readily marketable. Rule 144A under the Securities Act of 1933 provides a safe
harbor exemption from the registration requirements of the Securities Act for
resales of restricted securities to "qualified institutional buyers," as defined
in the Rule. The result of this rule has been the development of a more liquid
and efficient institutional resale market for restricted securities. Therefore,
the Board of Directors has determined that there should be no limitation imposed
upon the total value of restricted securities purchased by the Fund. Rather, the
Fund should be limited only with respect to the percentage of its net assets
invested in securities deemed to be illiquid, regardless of whether such
securities are restricted.
The sale of illiquid securities often requires more time and results in
higher brokerage charges or dealer discounts and other selling expenses than
does the sale of securities eligible for trading on national securities
exchanges or in the over-the-counter markets. The Fund may be restricted in its
ability to sell such securities at a time when Advisers deems it advisable to do
so. In addition, in order to meet redemption requests, the Fund may have to sell
other assets, rather than such illiquid securities, at a time that is not
advantageous. If the proposal is approved by shareholders, the Fund will be able
to invest to an unlimited extent in Rule 144A securities that are determined to
be liquid under guidelines adopted by the Fund's Board of Directors. However,
investing in Rule 144A securities could have the effect of increasing the level
of illiquidity in the Fund to the extent that qualified institutional buyers
become, for a time, uninterested in purchasing these securities.
The Fund currently has in place a non-fundamental policy providing that it
may invest up to 15% of its net assets in illiquid securities. This policy could
be amended or eliminated in the future without shareholder approval. However,
the Board of Directors would not be able to increase the percentage of the
Fund's assets that could be invested in illiquid securities absent a change in
the Commission's position regarding these investments.
J. Eliminate the Policy Prohibiting Options Transactions
It is proposed that the following fundamental policy of the Fund be
eliminated:
The Fund will not write, purchase or sell puts, calls or combinations
thereof.
-10-
<PAGE>
Assuming shareholder approval of this proposal, the Fund has a current
intention of writing, purchasing and selling put and call options, subject to
the limitations discussed above in Section E. These limitations could be
modified in the future by the Fund's Board of Directors without shareholder
approval.
A put option gives the purchaser the right to sell a security or other
instrument to the writer of the option at a stated price during the term of the
option. A call option gives the purchaser the right to purchase a security or
other instrument from the writer of the option at a stated price during the term
of the option. Thus, if a fund writes a call option on a security, it becomes
obligated during the term of the option to deliver the security underlying the
option upon payment of the exercise price. If a fund writes a put option, it
becomes obligated during the term of the option to purchase the security
underlying the option at the exercise price if the option is exercised.
Funds may use put and call options for a variety of purposes. For example,
if a portfolio manager wishes to hedge a security a fund owns against a decline
in price, the manager may purchase a put option on the underlying security;
i.e., purchase the right to sell the security to a third party at a stated
price. If the underlying security then declines in price, the manager can
exercise the put option, thus limiting the amount of loss resulting from the
decline in price. Similarly, if the manager intends to purchase a security at
some date in the future, the manager may purchase a call option on the security
today in order to hedge against an increase in its price before the intended
purchase date. Put and call options also can be used for speculative purposes.
For example, if a portfolio manager believes that the price of stocks generally
is going to rise, the manager may purchase a call option on a stock index, the
components of which are unrelated to the stocks held or intended to be
purchased. Finally, a portfolio manager may write options on securities owned in
order to realize additional income. Funds receive premiums from writing call or
put options, which they retain whether or not the options are exercised. By
writing a call option, a fund might lose the potential for gain on the
underlying security while the option is open, and by writing a put option a fund
might become obligated to purchase the underlying security for more than its
current market price upon exercise. If a fund purchases a put or call option,
any loss to the fund is limited to the premium paid for, and transaction costs
paid in connection with, the option.
When a fund enters into options transactions, its risk is limited to a
certain extent by the provisions of the 1940 Act that prohibit mutual funds from
issuing senior securities. Certain options transactions could be deemed to
result in a prohibited issuance of senior securities, since they may obligate a
fund to pay money to a third party at some time in the future. However, the
Commission staff has taken the position that a fund may engage in these options
transactions if it takes certain steps designed to limit risk to the fund. These
steps typically involve either "covering" the transaction with an offsetting
transaction or segregating cash or liquid securities in an amount sufficient to
cover the fund's exposure under the option transaction. Although these steps
will not protect a fund from loss on these transactions, they assure that the
fund will have the securities or liquid assets required to meet its obligations
thereunder, and they prevent the fund from effectively "leveraging" its
portfolio.
Given these staff positions, the Board of Directors believes that it is
appropriate to eliminate the fundamental investment restriction discussed above.
The elimination of this restriction would provide the Board with the flexibility
to determine, without shareholder vote, whether and to what extent it would be
appropriate in the future for the Fund to enter into options transactions.
Vote Required
The Board of Directors recommends that Fund shareholders vote to approve
each of the proposed changes to the Fund's investment policies. Each change must
be approved by a majority of the outstanding shares of the Fund, as defined in
the 1940 Act, which means the lesser of the vote of (a) 67% of the shares of the
Fund present at a meeting where more than 50% of the outstanding shares are
present in person or by proxy, or (b) more than 50% of the outstanding shares of
the Fund. Unless otherwise instructed, the proxies will vote for the approval of
the proposed investment policy changes.
-11-
<PAGE>
PROPOSAL THREE
RATIFICATION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The 1940 Act provides that every registered investment company shall be
audited at least once each year by independent public accountants selected by a
majority of the directors of the investment company who are not interested
persons of the investment company or of its investment adviser. The 1940 Act
provides that the selection be submitted for ratification or rejection by the
shareholders.
The Fund's Board of Directors, including a majority of the Directors who
are not interested persons of Advisers or the Fund, upon the recommendation of
the Fund's Audit Committee, have selected KPMG LLP to be the Fund's independent
public accountants for the fiscal years ending August 31, 2000 and 2001. KPMG
LLP has no direct or material indirect financial interest in the Fund or in
Advisers, other than receipt of fees for services to the Fund. KPMG LLP has
served as the independent public accountants of the Fund since 1988. KPMG LLP
also serves as independent public accountants for each of the other investment
companies managed by Advisers.
Representatives of KPMG LLP are expected to be present at the meeting. Such
representatives will be given the opportunity to make a statement to the
shareholders if they desire to do so and are expected to be available to respond
to any questions that may be raised at the meeting.
Vote Required
The Board of Directors recommends that shareholders vote in favor of the
ratification of KPMG LLP as the independent public accountants for the Fund. The
affirmative vote of a majority of the shares of the Fund represented at the
meeting, provided at least a quorum is represented in person or by proxy, is
sufficient for the ratification of the selection of the independent public
accountants. Unless otherwise instructed, the proxies will vote for the
ratification of the selection of KPMG LLP as the Fund's independent public
accountants.
EXECUTIVE OFFICERS OF THE FUND
Information about each executive officer's position and term of office with
the Fund and business experience during the past five years is set forth below.
Unless otherwise indicated, all positions have been held more than five years.
No executive officer receives any compensation from the Fund.
<TABLE>
<CAPTION>
Name and (Age) Position/Term of Office Business Experience During Past Five Years
-------------- ----------------------- ------------------------------------------
<S> <C> <C>
Dean C. Kopperud (47) President since 1995 See biographical information in Proposal One.
Gary N. Yalen (57) Vice President since 1995 President and Chief Investment Officer of Advisers
(since 1995) and Senior Vice President, Investments,
of Fortis, Inc.; prior to 1995, President and Chief
Investment Officer, Fortis Asset Management, a
former division of Fortis, Inc.
Howard G. Hudson (62) Vice President since 1995 Executive Vice President and Head of Fixed Income
Investments of Advisers since 1995; prior to
1995, Senior Vice President, Fixed Income, Fortis
Asset Management.
Lucinda S. Mezey (52) Vice President since 1997 Executive Vice President and Head of Equity
Investments of Advisers since October 1997; from
1995 to October 1997, Chief Investment Officer, Alex
Brown Capital Advisory and Trust Co., Baltimore, MD;
prior to 1995, Senior Vice President and Head of
Equity Investments, PNC Bank, Philadelphia, PA.
James S. Byrd (48) Vice President since 1991 Executive Vice President of Advisers since 1995;
prior to 1995, Vice President of Advisers and of
Investors.
</TABLE>
-12-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Nicholas L.M. de Peyster (33) Vice President since 1995 Vice President of Advisers since 1995; prior
to 1995, Vice President, Equities, Fortis Asset
Management.
Diane M. Gotham (41) Vice President since 1998 Vice President of Advisers since 1998; from 1994 to
1998, securities analyst for Advisers.
Laura E. Granger (38) Vice President since 1998 Vice President of Advisers since 1998; from 1993 to
1998, portfolio manager, General Motors Investment
Management, New York, NY.
Maroun M. Hayek (51) Vice President since 1995 Vice President of Advisers since 1995; prior to
1995, Vice President, Fixed Income, Fortis Asset
Management.
Robert C. Lindberg (44) Vice President since 1993 Vice President of Advisers since 1993.
Charles L. Mehlhouse (57) Vice President since 1996 Vice President of Advisers since 1996; prior to 1996,
Portfolio Manager, Marshall & Ilsley Bank
Corporation, Milwaukee, WI.
Kevin J. Michels (48) Vice President since 1995 Vice President of Advisers since 1995; prior to
1995, Vice President, Administration, Fortis Asset
Management.
Christopher J. Pagano (36) Vice President since 1996 Senior Vice President of Advisers since January
2000; from March 1996 to 2000, Vice President of
Advisers; from 1995 to March 1996, government
strategist, Merrill Lynch, New York, NY.
Kendall C. Peterson (43) Vice President since 1999 Vice President of Advisers since August 1999; from
1985 to July 1999, Vice President and portfolio
manager at Prudential Insurance Company of America,
Newark, NJ.
Stephen M. Rickert (56) Vice President since 1995 Vice President of Advisers since 1995; from 1994 to
1995, Corporate Bond Analyst, Fortis Asset
Management.
Michael J. Romanowski (48) Vice President since 1998 Vice President of Advisers since 1998; from 1995 to
1998, portfolio manager, Value Line, New York, NY;
prior to 1995, securities analyst, Conning & Co.,
Hartford, CT.
Christopher J. Woods (39) Vice President since 1995 Vice President of Advisers since 1995; prior to 1995
Vice President, Fixed Income, Fortis Asset
Management.
Robert W. Beltz, Jr. (50) Vice President since 1993 Vice President, Securities Operations, of Advisers
and of Investors.
Peggy E. Ettestad (42) Vice President since 1997 Senior Vice President, Operations, of Advisers since
March 1997; prior to March 1997, Vice President,
G.E. Capital Fleet Services, Minneapolis, MN.
Tamara L. Fagely (41) Treasurer since 1993 and Vice President of Advisers and Investors since 1998;
Vice President since 1996 prior thereto, Second Vice President of Advisers and
of Investors from 1995 to 1998.
Dickson W. Lewis (50) Vice President since 1997 Senior Vice President, Marketing and Sales, of
Advisers since July 1997; from 1993 to July 1997,
President and Chief Executive Officer, Hedstrom/
Blessing, Inc., Minneapolis, MN.
David A. Peterson (57) Vice President since 1991 Vice President and Assistant General Counsel, Fortis
Benefits Insurance Company.
Scott R. Plummer (40) Vice President since 1996 Vice President and Associate General Counsel of and
Assistant Secretary of Advisers.
Rhonda J. Schwartz (41) Vice President since 1996 Senior Vice President and General Counsel of
Advisers, Senior Vice President and General Counsel,
Life and Investment Products, of Fortis Benefits
Insurance Company and Vice President and General
Counsel, Life and Investment Products, of Time
Insurance Company since 1996; from 1993 to 1996,
Vice President and General Counsel, Fortis, Inc.
Melinda S. Urion (46) Vice President since 1997 Senior Vice President and Chief Financial Officer of
Advisers since December 1997; from 1995 to 1997,
Senior Vice President of Finance and Chief Financial
Officer, American Express Financial Corporation;
prior to March 1995, Corporate Controller, American
Express Financial Corporation.
Michael J. Radmer (55) Secretary since 1978 Partner, Dorsey & Whitney LLP, the Fund's General
Counsel.
</TABLE>
-13-
<PAGE>
ADDITIONAL INFORMATION ABOUT THE FUND
As of June 30, 2000, all Fund Directors and officers as a group owned less
than 1% of the outstanding shares of the Fund and no person, to the knowledge of
Fund management, was the beneficial owner of more than 5% of any class of voting
shares of the Fund, except as follows:
Name and Address of Number of Fund Percent of
Beneficial Owner Shares Owned Fund Shares Owned
---------------- ------------ -----------------
Mitra & Co. 2,673,847 7%
1000 N Water Street
Milwaukee WI 53202
SHAREHOLDER PROPOSALS
The Fund is not required to hold annual shareholder meetings. Since the
Fund does not hold regular meetings of shareholders, the anticipated date of the
next shareholder meeting cannot be provided. Any shareholder proposal which may
properly be included in the proxy solicitation material for a shareholder
meeting must be received by the Fund no later than four months prior to the date
proxy statements are mailed to shareholders.
Dated: July 19, 2000
/s/ Michael J. Radmer
Michael J. Radmer, Secretary
[FORTIS LOGO]
Fortis Financial Group
Fund management offered through Advisers, Inc. since 1949
Securities offered through Fortis Investors, Inc., member NASD, SIPC
Insurance products issued by Fortis Benefits Insurance
Company & Fortis Insurance Company.
P.O. Box 64284 - St. Paul, MN 55164-0284 - (800)800-2000
http://www.ffg.us.fortis.com
100885 (c)Fortis, Inc. 7/00 The Fortis brandmark and Fortis(R) are
servicemarks of Fortis (B) and
Fortis (NL)
-14-
<PAGE>
FORTIS GROWTH FUND, INC.
500 BIELENBERG DRIVE
WOODBURY, MN 55125
Receipt of Notice of Special Shareholders Meeting and Proxy Statement is
acknowledged by your execution of this proxy. Mark, sign, date, and return this
proxy in the addressed envelope - no postage required. Please mail promptly to
save the Fund further solicitation expenses.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Call 1-800-690-6903
3) Enter the 12-digit control number set forth on the Proxy card and follow
the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy card below at hand.
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the Proxy card and follow
the simple instructions.
FORTIS GROWTH FUND
PROXY FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD AUGUST 24, 2000
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned appoints Scott R. Plummer and Tamara L. Fagely, or each of them
with power to act without the other and with the right of substitution in each,
the proxies of the undersigned to vote all shares of Fortis Growth Fund, Inc.
(the "Fund") held by the undersigned on July 5, 2000, at a Special Shareholders
Meeting of the Fund, to be held at the offices of Fortis Advisers, Inc.
("Advisers"), 500 Bielenberg Drive, Woodbury, Minnesota, on Thursday, August 24,
2000, at 10:00 a.m. and at any adjournment thereof, with all powers the
undersigned would possess if present in person. All previous proxies given with
respect to the meeting are revoked.
THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE MATTERS SET FORTH BELOW. IT IS
UNDERSTOOD THAT IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" ALL
ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST
INTERESTS OF THE FUND.
SHARES
CONTROL NUMBER
ACCOUNT NUMBER
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: X
FORTIS KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
================================================================================
FORTIS GROWTH FUND
Vote On Directors
1. TO SET THE NUMBER OF DIRECTORS AT ELEVEN AND TO ELECT THE FOLLOWING
NOMINEES:
01) R.W. CUTTING, 02) A.R. FREEDMAN, 03) R.M. GAVIN,
04) J.L. KING, 05) D.C. KOPPERUD, 06) P.O. PETERSON,
07) R.L. PRINCE, 08) L.J. SANTOW, 09) N.F. SCHENKER,
10) L.W. SENBET, 11) J.M. WIKLER
For Withhold For All To withhold authority to vote, mark "For All Except"
All All Except and write the nominee's number on the line below.
[ ] [ ] [ ] ----------------------------------------------------
Vote On Proposals
2. TO APPROVE THE ELIMINATION OR
MODIFICATION OF CERTAIN INVESTMENT
POLICIES. For Against Abstain
A. Modification of borrowing policy [ ] [ ] [ ]
B. Modification of industry concentration
policy [ ] [ ] [ ]
C. Modification of underwriting policy [ ] [ ] [ ]
D. Modification of real estate policy [ ] [ ] [ ]
E. Modification of commodities policy [ ] [ ] [ ]
F. Modification of lending policy [ ] [ ] [ ]
For Against Abstain
G. Elimination of policy prohibiting pledging
of assets [ ] [ ] [ ]
H. Elimination of policy prohibiting margin
purchases and short sales [ ] [ ] [ ]
I. Elimination of policy limiting investment
in restricted securities [ ] [ ] [ ]
J. Elimination of policy prohibiting options
transactions [ ] [ ] [ ]
3. PROPOSAL TO RATIFY THE SELECTION OF KPMG
LLP AS THE INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FUND. [ ] [ ] [ ]
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF.
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
