File No. 2-36565
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. 52 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 17
JEFFERSON-PILOT CAPITAL APPRECIATION FUND, INC.
(Exact Name of Registrant as Specified in Charter)
100 North Greene Street
Greensboro, North Carolina 27401
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code 1-800-458-4498
J. Gregory Poole
Jefferson-Pilot Life Insurance Company
100 North Greene Street
Greensboro, North Carolina 27401
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[x ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) 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>
JEFFERSON-PILOT CAPITAL APPRECIATION FUND, INC.
Registration Statement on Form N1-A
CROSS REFERENCE SHEET
Pursuant to Rule 481 (a)
N-1A
Item No. Caption
PART A INFORMATION REQUIRED IN A PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Shareholder Transaction
Expenses
3. Condensed Financial Information Condensed Financial
Information
4. General Description of Registrant General Description;
Investment
Objectives and Policies
5. Management of the Fund Who Manages The Funds
5A. Management's Discussion of Performance Performance
6. Capital Stock and Other Securites Additional Information
7. Purchase of Securities Being Offered How to Purchase Shares
8. Redemption or Repurchase How to Redeem Shares
9. Pending Legal Proceedings Not Applicable
PART B INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History General Information
<PAGE>
CROSS REFERENCE SHEET -- CONTINUED
N1-A
Item No. Caption
13. Investment Objectives and Policies Investment Objectives and
Policies
14. Management of the Registrant The Fund's Directors and
Officers
15. Control Persons and Principal
Holders of Securities General Information
16. Investment Advisory and Other Services The Investment Adviser
17. Brokerage Allocation and Other Practices Brokerage
18. Capital Stock and Other Securities Not Applicable
19. Purchase, Redemption and Pricing of
Securities Being Offered Purchase and Redemption of
Shares
20. Tax Status Not Applicable
21. Underwriters The Fund's Distributor
22. Calculation of Performance Data Not Applicable
23. Financial Statements Financial Statements
PART C OTHER INFORMATION
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Registration Statement.
<PAGE>
JEFFERSON-PILOT
FAMILY OF FUNDS
_____________________________________
PROSPECTUS
______________________________________
May 1, 1996
Jefferson-Pilot Capital Appreciation Fund
Jefferson-Pilot Investment Grade Bond Fund
Jefferson-Pilot Capital Appreciation Fund, Inc. has as its primary objective
long term capital appreciation. A secondary objective is current income
through the receipt of interest or dividends.
Jefferson-Pilot Investment Grade Bond Fund, Inc. has as its primary objective
the maximum level of current income as is consistent with prudent risk. A
secondary objective is growth of income and capital.
This Prospectus sets forth concisely information about the above mentioned
companies that a prospective investor ought to know before investing.
Investors are advised to read and retain this Prospectus for future reference.
A Statement of Additional Information dated May 1, 1996 for each of the
above mentioned companies on file with the Securities and Exchange Commission
is, in its entirety, incorporated by reference in and made a part of this
Prospectus and is available without charge upon request to Jefferson-Pilot
Investor Services, Inc., PO Box 22086, Greensboro, NC 27420.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
Table of Contents
Shareholder Transaction Expenses . . . . . . . . . . . . . . . . . . . . .3
Condensed Financial Information. . . . . . . . . . . . . . . . . . . . . .4
Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
General Description. . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Investment Objectives and Policies . . . . . . . . . . . . . . . . . . . .7
Portfolio Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
How To Purchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . 9
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Who Manages The Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 12
Dividends, Distributions and Taxes . . . . . . . . . . . . . . . . . . . 13
How To Redeem Shares . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . 15
<PAGE>
Jefferson-Pilot Capital Appreciation Fund, Inc.
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases 4.50%
(as a percentage of the Offering Price)
Maximum Sales Load Imposed on Reinvested .0%
Dividends (as a percentage of Offering Price)
Exchange Fee None
Annual Fund Operating Expenses
(as percentage of average net assets)
Management Fees .50%
Other Expenses .37%
Total Fund Operating Expenses .87%
Example
You would pay the following expenses 1 year 3 years 5 years 10 years
on a $1,000 investment assuming (1) a 5%
annual return and (2) redemption at the
end of each time period:
$33 $72 $91 $147
Jefferson-Pilot Investment Grade Bond Fund, Inc.
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases 4.50%
(as a percentage of the Offering Price)
Maximum Sales Load Imposed on Reinvested .0%
Dividends (as a percentage of Offering Price)
Exchange Fee None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees .50%
Other Expenses .46%
Total Fund Operating Expenses .96%
<PAGE>
Example
1 year 3 years 5 years 10 years
You would pay the following expenses
on a $1,000 investment assuming (1) a
5% annual return and (2) redemption
at the end of each time period: $54 $74 $96 $158
The purpose of the preceding tables is to assist the prospective investor with
a more detailed understanding of the various cost and expenses that will be
charged, directly or indirectly, against the investment to be made in the Funds.
These costs and expenses are more fully described in Sections entitled "How to
Purchase Shares", "Shareholder Services" and "Who Manages The Funds" found
elsewhere in this Prospectus. THE EXPENSES SET FORTH IN THE TABLE ABOVE SHOULD
NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE COST, AND ACTUAL EXPENSES
MAY BE GREATER OR LESSER THAN THOSE SHOWN ABOVE.
Condensed Financial Information
The following selected per share data and ratios of Jefferson-Pilot Capital
Appeciation Fund, Inc. and Jefferson-Pilot Investment Grade Bond Fund, Inc.
(the "Funds") have been audited by McGladrey & Pullen, LLP, Independent
Certified Public Accountants, as set forth in their opinion appearing in the
Statement of Additional Information for each of the Funds.
Jefferson-Pilot Investment Grade Bond Fund, Inc.
<TABLE>
<CAPTION>
Year Ended December 31
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance (for a
share outstanding throughout the year)
Net asset value, beginning of year $8.70 $9.89 $9.57 $9.65 $ 9.23 $ 9.48 $ 9.21 $ 9.32 $ 9.96 $ 9.34
Income from investment operations
Net investment income .60 0.62 0.64 0.66 0.76 0.82 0.83 0.82 0.83 0.84
Net realized and unrealized gain (loss)
on investments .96 (1.21) 0.32 (0.06) 0.44 (0.25) 0.28 (0.11) (0.63) 0.63
Total from investment operations 1.56 ( .59) .96 0.60 1.20 0.57 1.11 0.71 0.20 1.47
Less distributions
Dividends from net investment income (0.60) (0.60) (0.64) (0.68) ( 0.78) (0.82) (0.84) (0.82) (0.84) (0.85)
Distributions from net realized gains - - - - - - - - - -
Total distributions (0.60) (0.60) (0.64) (0.68) ( 0.78) (0.82) (0.84) (0.82) (0.84) (0.85)
Net asset value, end of year $9.66 $8.70 $9.89 $9.57 $ 9.65 $ 9.23 $ 9.48 $ 9.21 $ 9.32 $ 9.96
Total return (without deduction of
sales load) 18.39% (5.97)% 10.24% 6.53% 13.76% 6.54% 12.60% 7.94% 2.31% 16.49%
Ratios/supplemental data:
Net assets, end of year (000 omitted) $22,290 $21,032 $23,632 $21,359 $19,313 $18,083 $18,209 $17,665 $17,850 $19,602
Ratios to average net assets:
Expenses 0.96% 0.85% 0.86% 0.93% 0.93% 0.91% 0.85% 0.85% 0.82% 0.91%
Net investment income 6.40% 8.32% 6.46% 6.99% 8.18% 8.96% 8.90% 8.87% 8.77% 8.63%
Portfolio turnover rate 33.91% 41.01% 21.34% 25.53% 23.65% - 7.60% 6.45% 6.34% 6.05%
</TABLE>
<PAGE>
Jefferson-Pilot Capital Appreciation Fund, Inc.
<TABLE>
<CAPTION>
Year Ended December 31
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
(for a share outstanding throughout
the year)
Net asset value, beginning of year $ 12.56 $ 17.05 $ 17.44 $ 18.02 $ 14.09 $ 14.81 $ 12.31 $ 11.79 $ 13.62 $ 15.94
Income from investment operations
Net investment income 0.25 0.29 0.23 0.23 0.32 0.36 0.39 0.30 0.33 0.42
Net realized and unrealized gain
(loss) on investments 4.03 (1.12) 1.04 0.75 4.13 (0.57) 3.38 0.55 (0.26) 1.53
Total from investment operations 4.28 (0.83) 1.27 0.98 4.45 (0.21) 3.77 0.85 0.07 1.95
Less distributions
Dividends from net investment income (0.24) (0.28) (0.22) (0.27) (0.33) (0.35) (0.40) (0.30) (0.36) (0.50)
Distributions from net realized gains (0.64) (3.38) (1.44) (1.29) (0.19) (0.16) (0.87) (0.03) (1.54) (3.77)
Total distributions (0.88) (3.66) (1.66) (1.56) (0.52) (0.51) (1.27) (0.33) (1.90) (4.27)
Net asset value, end of year $ 15.96 $ 12.56 $ 17.05 $ 17.44 $ 18.02 $ 14.00 $ 14.81 $ 12.31 $ 11.79 $ 13.62
Total return (without deduction
of sales load) 34.47% (4.63) 7.68% 5.60% 32.22% (1.42%) 31.28% 7.29% 0.88% 13.80%
Ratios/supplemental data:
Net assets, end of year (000 omitted) $37,831 $32,383 $38,045 $34,898 $33,836 $25,840 $26,705 $23,649 $23,147 $23,625
Ratios to average net assets:
Expenses 0.87% 0.83% 0.84% 0.87% 0.87% 0.88% 0.89% 0.88% 0.79% 0.89%
Net investment income 1.66% 1.74% 1.30% 1.30% 1.98% 2.52% 2.75% 2.51% 2.16% 2.70%
Portfolio turnover rate 65.27% 143.81% 26.89% 53.38% 36.70% 30.55% 59.88% 73.63% 79.56% 63.99%
</TABLE>
<PAGE>
Performance
Capital Appreciation Fund
[Line Chart showing Comparison of Change in Value of $10,000
Investment In The Capital Appreciation Fund and S&P 500 for
the ten year period 1985 through 1995]
For the 12-month period ended December 31, 1995, Jefferson-Pilot Capital
Appreciation Fund had an annual total return of 34.47% (35.34% before expenses)
versus a total return for the S&P 500 of 37.53%. The Capital Appreciation Fund
continues to purchase stocks of those companies considered industry leaders,
that are attractively valued in relation to their earnings growth rate.
Convertible bonds and preferred stocks are purchased when appropriate. The
fund will pursue a future strategy of being fully invested and seeking superior
performance through stock selection with a neutral economic sector tilt relative
to the S&P 500.
Investment Grade Bond Fund
[Line Chart showing Comparison of Change in Value of
$10,000 Investment in Investment Grade Bond Fund and
Lehman Brothers Government/Corporate Index for the
ten year period 1985 through 1995.]
During the 12-month period December 31, 1995, the Bond Funds performance
was generally less than the Lehman Government/Corporate Index before expenses.
After adjusting performance for expenses, the Bond Funds total return of 18.39%
compared to the Index's total return of 19.24%. During 1995, the Bond Funds
performance was hampered by a duration position that was generally longer than
the duration of Lehman Government/Corporate Index. In response to last year's
underperformance, the Bond Fund reduced the duration of the portfolio to more
closely correspond to that of the Index. From a credit standpoint, the Bond
Fund employs a conservative strategy designed to maximize performance with the
context of investing primarily in A - rated or higher corporate and government
securities. All of the Fund's holdings at December 31, 1995 were rated
"investment grade" Moody's Investor Service, Inc. and Standard & Poor's
Corporation.
<PAGE>
General Description
Jefferson-Pilot Capital Appreciation Fund, Inc., formerly JP Growth Fund, Inc.
("Capital Appreciation") and Jefferson-Pilot Investment Grade Bond Fund, Inc.,
formerly JP Income Fund, Inc. ("Bond Fund") are corporations organized under
the laws of North Carolina on January 13, 1970 and January 24, 1978,
respectively. Each is registered under the Investment Company Act of 1940 as
an open-end diversified investment company.
Investment Objectives and Policies.
Capital Appreciation Fund The Capital Appreciation Fund's primary investment
objective is long-term capital appreciation. Current income through the
receipt of interest or dividends from investments is only a secondary
objective. The Capital Appreciation Fund proposes to achieve these objectives
by investing substantially all its assets in common stocks of companies
recognized as leaders in their respective industries with proven and capable
management and that are providing significant products and services to their
customers. The Capital Appreciation Fund's investments will be made
predominantly in securities listed on registered securities exchanges, but it
may purchase securities traded in the over-the-counter market. Investments
may be made in other equity securities, including rights, warrants, preferred
stock and those debt securities convertible into or carrying rights, warrants,
or options to purchase common stock or to participate in earnings. Not more
than five percent of the Fund's net assets may be invested in warrants (valued
at the lower of cost or market value) and not more than two percent of its net
assets may be invested in warrants not listed on the New York Stock Exchange.
The Capital Appreciation Fund may also hold cash or invest in short-term
securities and may purchase U. S. government obligations with a simultaneous
agreement by the seller to repurchase the securities at the original price
plus accrued interest; provided that not more than 10% of the Capital
Appreciation Fund's net assets may be invested in such repurchase agreements
that mature in more than seven days. Repurchase agreements involve certain
risks in the event of a default by the other party.
The percentage of assets invested in different types of securities will vary
from time to time depending upon the judgment of the management as to general
market and economic conditions, fiscal and monetary policy and trends in
interest rates and yields.
The Capital Appreciation Fund's investments (other than cash and U. S.
Government securities) are diversified among the securities issued by
different companies and governments to the extent that no more than 5% of its
total assets may be invested in securities issued by any one issuer. In
addition, management generally selects investments for the Fund from among
many different industries and may invest up to 25% of the Fund's assets in a
single industry. The investment restrictions (page 1, Statement of Additional
Information) include: limitations on borrowing money; no more than 10% of
assets may be invested in securities with a limited trading market; and no
more than 5% of assets may be invested in companies having a record of less
than three years of continuous operation. These restrictions, and the
investment objectives and policies described above, as well as most of the
additional restrictions described in the Statement of Additional Information,
cannot be changed without the approval of a majority of the Fund's outstanding
voting stock. While the Capital Appreciation Fund invests for long term growth
of capital and does not intend to place emphasis upon short-term trading
profits, it will sell securities held short term to take advantage of special
opportunities which might arise. Accordingly, the Capital Appreciation Fund
has historically had a portfolio turnover rate of less than 100%. The Capital
Appreciation Fund's portfolio turnover rates are shown in its respective table
under the caption "Condensed Financial Information".
<PAGE>
Generally, the Capital Appreciation Fund's expenses will increase in relative
proportion to an increase in its portfolio turnover rate and may result in
taxes on realized capital gains to be borne by the Fund or its shareholders.
See "Dividends, Distributions, and Taxes" in this prospectus and "Brokerage"
on page B-4 of the Statement of Additional Information of each Fund.
The Capital Appreciation Fund's investments are subject to market fluctuations
and risks inherent in all securities. There is no assurance that the Fund's
stated objectives will be realized.
Bond Fund The Bond Fund's primary investment objective is the maximum level
of current income as is consistent with prudent risk. A secondary objective
is growth of income and capital. The Bond Fund proposes to achieve these
objectives by investing primarily in fixed income securities rated A or
better by Standard & Poor's Corporation ("S&P") or Moody's Investors Service,
Inc. ("Moody's"). The Bond Fund will also purchase dividend paying common
stocks. Fixed income securities will include debt securities and preferred
stocks, some of which may have a call on common stock by means of conversion
privilege or attached warrants. When the incremental investment yield
available on corporate securities is small compared to that available on U. S.
Treasury securities, the Bond Fund may invest substantially in U. S. Treasury
securities. The Bond Fund may also hold cash or invest in short-term securities
and may purchase U. S. Government obligations with a simultaneous agreement by
the seller to repurchase the securities at the original price plus accrued
interest; provided that not more than 10% of the Fund's net assets may be
invested in such repurchase agreements that mature in more than seven days.
Repurchase agreements involve certain risks in the event of a default by the
other party.
The percentage of assets invested in different types of securities will vary
from time to time depending upon the judgment of the management as to general
market and economic conditions, fiscal and monetary policy and trends in
interest rates and yields.
The Bond Fund's investments (other than cash and U. S. Government securities)
are diversified among the securities issued by different companies and
governments to the extent that no more than 5% of its total assets may be
invested in securities issued by any one issuer. In addition, management
generally selects investments for the Bond Fund from among many different
industries and may invest up to 25% of the Bond Fund's assets in a single
industry. The investment restrictions (page 1, Statement of Additional
Information) include: limitations on borrowing money; no more than 10% of
assets may be invested in securities with a limited trading market; and no
more than 5% of assets may be invested in companies having a record of less
than three years of continuous operation. These restrictions, and the
investment objectives and policies described above, as well as most of the
additional restrictions described in the Statement of Additional Information,
cannot be changed without the approval of the majority of the Fund's
outstanding stock. While the Bond Fund does not intend to place emphasis upon
short-term trading profits, it will sell securities held short term to take
advantage of special opportunities which might arise. Accordingly, the Bond
Fund has historically had a portfolio turnover rate of less than 50%. The
Bond Fund's portfolio turnover rates are shown in its respective table under
the caption "Condensed Financial Information".
The Bond Fund's investments are subject to market fluctuations and risks
inherent in all securities. There is no assurance that the Bond Fund's stated
objectives will be realized.
<PAGE>
Portfolio Managers
The following individuals are the portfolio managers for the Funds:
Capital Appreciation Fund. Gregory D. Walker, Equity Portfolio Manager and
Second Vice President of Jefferson-Pilot Life Insurance Company. Mr. Walker
has worked in the Jefferson-Pilot Life Insurance Company's Securities
Department for the past 2 years as an Equity Analyst and Portfolio Manager.
Prior to his employment with Jefferson-Pilot, Mr. Walker was an Equity
Portfolio Manager and Analyst at North Carolina Trust Company of Greensboro,
North Carolina.
Bond Fund. H. Lusby Brown, Portfolio Manager, Second Vice President -
Securities, Jefferson-Pilot Life Insurance Company. Mr. Brown has spent
the last ten years in Jefferson- Pilot's Securities Department focusing on
the public equity and public and private fixed income markets. He was named
portfolio manager of Jefferson-Pilot Investment Grade Bond Fund in July of
1994. Prior to joining Jefferson-Pilot, Mr. Brown earned his graduate business
degree from the University of North Carolina at Chapel Hill.
How To Purchase Shares
Shares are offered continuously for sale by the Fund's distributor,
Jefferson-Pilot Investor Services, Inc. ("Investor Services"), P.O. Box 22086,
Greensboro, North Carolina 27420, and are also available through authorized
investment dealers. Except under regular investment plans and under certain
qualified retirement plans and other similarly administered plans, the minimum
initial investment is $300 and subsequent investments must be at least $25.
Such additional investments may be made directly to the Fund's stock transfer
and dividend paying agent, Investors Fiduciary Trust Company ("IFTC"), 127 West
10th Street, Kansas City, MO 64105-1716.
Volume Discount. The size of investment shown in the table on the top of page
10 applies to the total amount being invested by any person in shares in
either Fund alone or both Funds jointly. A person eligible for a volume
discount includes an individual, his spouse, and their children under the age
of 21; a trustee or other fiduciary purchasing shares for a single fiduciary
account, including employee benefit plans; and an organized group of persons,
provided the organization has been in existence for at least six months and
has some purpose other than the purchase of redeemable securities of a
registered investment company at a discount, and provided that its purchases
are made through a central administration by means which result in economy of
sales effort or expense. IFTC must be given notice of the account number of
any account to be included for the purpose of determining volume discounts.
Shares are offered at the net asset value per share plus a sales commission,
as hereinafter described. The offering price so determined becomes effective
at the New York Stock Exchange closing time. Orders received prior to that
time are confirmed at the offering price effective at that time, provided the
order is received by Investor Services or IFTC prior to their close of
business. The net asset value per share is calculated as hereinafter
described. The sales charge, expressed as a percentage of the public offering
price and as a percentage of the new amount invested, is described in the
following table. The table also discloses the commission allowed other
broker-dealers as a percentage of the offering price.
<PAGE>
Amount of Purchase Sales Charge as % As % of the Sales Charge Allowed
of the Amount Offering Price to Dealer As % of
Invested Offering Price
Less than $50,000 4.71% 4.50% 4.50%
$50,000 but less
than $100,000 4.17% 4.00% 4.00%
$100,000 but less
than $250,000 3.09% 3.00% 3.00%
$250,000 but less than
$500,000 2.04% 2.00% 2.00%
$500,000 or more 1.01% 1.00% 1.00%
Cumulative Purchase Discount. The size of investment shown in the above table
may also be determined by combining the amount being invested plus the current
offering price of all shares of either Fund or of both Funds which have been
previously purchased and are still owned by the purchaser. IFTC must be given
notice of each purchase that is eligible for the cumulative purchase discount.
Statement of Intention. A Statement of Intention gives the investor an
opportunity to obtain a reduced sales charge by aggregating his investments
over a 13-month period to determine the sales charge as outlined in the
preceding table. The size of the investment as shown in the table includes
purchases of shares of either Fund or both Funds previously purchased and still
owned. Each investment made during the period receives the reduced sales
commission applicable to the total amount of the investment goal. If the goal
is not achieved within the period, the investor must pay the difference between
the commissions applicable to the purchases made and the commissions previously
paid. An investor is not required to purchase shares designated in a Statement
of Intention.
Special Sales. See page B-5 of the Statement of Additional Information of each
Fund for information relating to sales without a sales commission to current or
retired directors and officers of that Fund; current or retired employees of
Jefferson-Pilot Corporation and its affiliates; certain related persons or
family members of the above persons; bona fide full time employees or sales
representatives of that Fund; and to tax qualified employee benefit plans
covering employees of that Fund, its investment adviser or distributor.
Shares are also offered at net asset value to investors where the amounts
invested represent redemption proceeds from investment companies whose shares
are distributed by some entity other than Investor Services provided (a) such
redemption has occurred no more than 15 days prior to the purchase of shares
of the particular Fund, and (b) the investor paid an initial sales charge or
was subject to a deferred sales charge on the redeemed shares. Shares are
offered at net asset value to such persons because of the anticipated economies
in sales efforts and sales related expenses. Each Fund reserves the right to
terminate or amend the terms of its offering of its shares at net asset value
to such persons at any time.
How To Determine Net Asset Value. Net asset value per share is computed as of
the close of each day on which the New York Stock Exchange is open (4:00 p.m.
New York time) and on any other day in which there is a sufficient degree of
trading in the Fund's portfolio securities to materially affect net asset
value. Net asset value is determined by dividing the value of the Fund's
securities, plus any cash and other assets (including dividends accrued but
not collected) less all liabilities (including accrued expenses), by the number
of shares outstanding.
<PAGE>
A security listed or traded on an exchange is valued at its last sale price
on that exchange where it is principally traded or, if there were no sales on
that exchange, the last quoted sale on other exchanges or on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ").
Lacking any sales the security is valued at the mean of the last bid and ask
prices reported on the exchange where the security is principally traded. All
other securities for which over-the-counter market quotations are readily
available are valued at their last sale price on NASDAQ or at the mean of the
last bid and ask prices as of the close of trading. Fixed income securities
are valued by using market quotations, or independent pricing services which
use prices provided by market makers or estimates of market values obtained
from yield data relating to similar classes of instruments or securities.
Certain short-term debt securities are valued at amortized cost. Other
securities, including restricted securities, and other assets are valued at
fair value as determined in good faith and under authority by the Board of
Directors.
Shareholder Services
Automatic Investment Plan. If a shareholder's bank agrees to participate, the
shareholder may authorize the Fund's shareholder service agent to charge a bank
account on a regular basis or to draw monthly checks to invest predetermined
amounts in the Funds. Purchases are made at the offering price on the date the
shareholder service agent charges the bank account or deposits the
preauthorized check. A shareholder wishing to invest in such manner should so
indicate on the application form and execute any other necessary authorization
forms. The minimum monthly investment is $25.00.
Open Accounts. An open account will be created for each investor so that
additional investments may be made at any time without completing a new
application. Full and fractional Fund shares purchases will be credited to
the investor's account. Share certificates will be issued by the Funds only
upon specific request and then only for full shares. Whenever there is a
transaction in his account, the investor will receive a written statement
concerning the current status of the account, including the number of Fund
shares then owned.
Systematic Withdrawal Plan. An investor with shares of either Fund having a
net asset value of at least $10,000 may participate in a systematic withdrawal
plan of that Fund. Under this plan, the investor chooses to have payments made
on a monthly or quarterly basis to himself or another designated person. The
minimum payment that may be designated (whether monthly or quarterly) is $50.
All dividends and capital gains distributions are automatically reinvested in
additional shares of that Fund at net asset value as of the record date
without a sales charge. Under this plan, sufficient shares of the Fund are
redeemed to provide the amount of the periodic withdrawal payment. If
periodic withdrawals continuously exceed reinvested dividends and capital
gains distributions, the investor's original investment will be
correspondingly reduced and ultimately exhausted.
Withdrawals made concurrently with purchase of additional shares ordinarily
will be disadvantageous to the investor because of the duplication of sales
charges. Any taxable gain or loss will be recognized by the investor upon
redemption of shares.
<PAGE>
Exchange Privilege. Shareholders residing in those states in which shares
of both Funds are registered, may exchange their shares of either Fund for
shares of the other at their respective net asset values per share without
any sales or exchange charge. Shares exchanged must have a current value of
at least $500. Exchanges will be effected by redemption of shares of the
Fund held and purchase of shares of the other Fund, which for federal income
tax purposes is a taxable transaction. Exchange instructions must be given
to IFTC by telephoning 1-800-292-6701. Exchanges may be made by telephone only
if share certificates have not been issued and if the shareholder elects such
option on the initial application, in which event the signature(s) on the
application must be guaranteed as described in the section captioned "How To
Redeem Shares."
Shareholders wishing to exercise an exchange privilege should so notify IFTC,
which will send a prospectus for the Fund to be purchased and instructions.
Such an exchange is not a tax-free exchange.
Investing By Telephone. Shareholders who have elected such option in the
application and who have completed any other necessary authorization forms
may, by telephoning IFTC at 1-800- 292-6701, purchase shares of either Fund
from a bank account designated in the authorization form. The shareholder's
bank must be a participant in the Automated Clearing House system. The bank,
upon receiving a shareholder's telephone request for a purchase, will instruct
the shareholder's designated bank to withdraw from the shareholder's account
at that bank the amount to be transferred to purchase shares. The investment
will normally be credited to the shareholder's Fund account the day following
the day of the telephone request.
Tax Qualified Retirement Plans. Shares of either Fund may be purchased by all
types of retirement plans receiving favorable federal income tax treatment,
including Individual Retirement Accounts (IRA) (for individuals and their
non-employed spouses who desire to make limited tax deductible contributions
to a tax deferred retirement program); Simplified Employee Pension (SEP-IRA)
Plans; 403(b) Plans (arrangements for employees of public school systems,
universities and certain other non-profit organizations); and other corporate
pension and profit sharing plans. For additional information on these plans,
see page B-5 of the Statement of Additional Information of each Fund or
contact Investor Services. Investors should consult with their tax advisor
before establishing any of the tax deferred retirement plans described above.
Who Manages The Funds
The Board of Directors of each Fund is responsible for the overall supervision
of the conduct of the Fund's business. Each Fund's investment adviser is JP
Investment Management Company ("JP Management"), P.O. Box 21008, Greensboro,
North Carolina 27420, a North Carolina corporation organized on January 13,
1970. JP Management is a wholly-owned subsidiary of Jefferson-Pilot
Corporation, an insurance holding company. JP Management has served as an
investment adviser to the Capital Appreciation Fund, since its inception in
1970; to the Bond Fund, since its inception in 1978; and to JP Capital
Appreciation Fund, Inc., and JP Investment Grade Bond Fund, Inc. since the
inception of those companies in 1982.
<PAGE>
In addition to providing investment advice, JP Management or persons
employed by or associated with JP Management are, subject to the authority of
the Board of Directors, responsible for the overall management of the Funds'
business affairs. As compensation for its services, JP Management receives
from each Fund a fee at an annual rate of half of 1% of the Funds average net
asset value. The fee is Payable monthly, on the basis of the Fund's average
net asset value during the monthly period computed in the manner used in
determining the public offering price of Fund shares. The ratio of the
management fee to average net assets for the year ended December 31, 1995
was 0.5%. For the same period, the Capital Appreciation Fund's total operating
expenses were .87% of average net assets and the Bond Fund's total operating
expenses were .96% of average net assets.
Under a Service Agreement between each Fund, JP Management, Jefferson-Pilot
Life Insurance Company and Jefferson-Pilot Investments, Inc. ("Companies"),
the Companies have agreed to furnish such personnel, services and facilities
as may be reasonably needed by JP Management in connection with its performance
under the Investment Advisory Agreement, and JP Management has agreed to
reimburse the Companies for their expenses in this regard.
Under accounting agreements, JP Management also serves as the Fund's accounting
agent. Each of the Funds has agreed to reimburse JP Management for its
expenses incurred in serving as such agent, provided such expenses do not exceed
the amount for which the Funds could have obtained such services from some third
party.
Dividends, Distributions and Taxes
The Capital Appreciation Fund's policy is to pay dividends from net investment
income semi-annually in February and August. The Bond Fund's policy is to pay
dividends from net investment income quarterly in February, May, August and
November. In addition, if the Capital Appreciation or Bond Fund has not paid
out 98% of its net investment income by the end of the calendar year, its
policy is to pay a dividend near the end of the calendar year which will, when
added to the dividends previously paid in the year, equal or exceed 98% of its
net investment income for the year. Each December the Capital Appreciation and
Bond Funds make a distribution of the capital gains, if any, each realized
during the 12-month period ended the preceding October 31. Unless the investor
requests that payments be made in cash, dividends and distributions will be
reinvested in additional Fund shares at net asset value as of the record date.
The investor may, if he also owns shares of both Funds, request that all such
dividends and/or distributions be used to purchase additional shares in
either Fund at net asset value as of the record date.
Each Fund qualified in 1995 and plans to qualify in 1996 for the special tax
treatment afforded a "regulated investment company" under Subchapter M of the
Internal Revenue Code (the"Code"). In any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund (but
not shareholders) will be relieved of federal income tax on the income
distributed. Dividends (i.e., distributions of any net investment income and
any net realized short-term capital gains) are taxable to shareholders as
ordinary income, whether received in cash or additional shares. Distributions
of long-term capital gains (i.e., the excess of any net long-term capital gains
over net short-term capital losses), if any, are taxable as long-term capital
gains whether received in cash or shares without regard to how long a
shareholder has held his shares. Gain or loss realized on a redemption by a
shareholder will be treated as a capital gain or loss unless the shares are
not capital assets in the shareholder's hands. Shareholders will be notified
by each January 31 of the amounts of dividends and distributions for the
preceding year, including the amounts (if any) which have been designated as
long-term capital gains distributions. The Funds may be required by the Code
to withhold at a rate of 31% upon payment of redemptions to shareholders, and
from taxable dividends and capital gain distributions (if any), if provisions
of the law relating to the furnishing of taxpayer identification numbers and
reporting of dividends are not complied with by shareholders.
<PAGE>
The foregoing is a general summary of the applicable provisions of the Code
and Treasury Regulations presently in effect. Dividends and distributions
also may be subject to state or local taxes. Investors should consult their
tax advisors for specific information.
How To Redeem Shares
Shareholders may redeem shares at the per share net asset value next determined
after receipt of certificates endorsed by all parties (or trustees) in whose
name the certificates are issued, and in proper form for transfer, at the
office of IFTC. The certificates must be endorsed by the parties exactly as
the certificates are registered and the signature(s) must be guaranteed by a
bank or trust company or a member firm of a national securities exchange. If no
certificates have been issued to the shareholder, redemption may be accomplished
by signed written request, guaranteed as above, directed to the IFTC; provided,
however, that a shareholder to whom no certificate(s) have been issued may
redeem up to as much as $500 in shares in any one calendar year without the
signature being guaranteed. The signature need not be guaranteed where shares
of one Fund are exchanged for shares of the other Fund. A redemption request
should identify the account by number and should be signed by all parties (or
trustees) in whose name the account is registered in the exact manner in which
the account is registered. It is suggested that all redemption requests by
mail be sent certified with return receipt requested.
Shares may be redeemed by telephoning IFTC at 1-800-292-6701, provided the
shareholder elects such option on the initial application, in which event the
signature(s) on the application must be guaranteed as described above.
Payment will be by check mailed the next day to the bank account designated by
the shareholder in the application. The bank account can be changed only by the
shareholder submitting a written request with the signature guaranteed. Unless
the redemption is a total redemption, a shareholder may not effect a redemption
by telephone for an amount per Fund of less than $500 or greater than $10,000.
Redemption by telephone is not available on accounts where share certificates
are outstanding. During periods of unusual market changes and shareholder
activity, you may experience delays in contacting IFTC by telephone, in which
case you may wish to submit a written redemption request, as described above.
The telephone redemption privilege may be modified or terminated without
notice.
A check for payment for shares redeemed will be issued as early as possible,
but not later than seven days after IFTC's receipt of the certificates or the
written redemption request. However, IFTC will not disburse payment for shares
purchased by check (including payment by certified or casher's check) for up to
fifteen calendar days following the investment date. Redemption of shares may
be suspended or payment postponed at times (a) when the New York Stock Exchange
is closed other than weekends and holiday, (b) when trading on said Exchange
is restricted, (c) when an emergency exists as a result of which disposal by
the Fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund fairly to determine the value of its net
assets, or during any other period when the Securities and Exchange Commission,
by order, so permits; provided that applicable rules and regulations of the
Securities and Exchange Commission shall govern as to whether the conditions
prescribed in (b) or (c) exist.
Neither Fund nor Investor Services makes a charge for redemption. Other
broker-dealers may charge for handling redemption transactions but such charge
can be avoided by requesting redemption by the Funds directly or through the
Investor Services.
<PAGE>
The shareholder may, within thirty days of a redemption of shares of either
Fund, reinvest the proceeds in shares of that Fund or the other Fund at net
asset value without a sales charge. This privilege is permitted only once to
each shareholder per year.
Due to the high cost of maintaining accounts, each Fund reserves the right to
redeem any account which has been in existence for at least one year and which
has a balance of less than $250. A shareholder will be notified in writing of
either Fund's intention to redeem and given 60 days to make additional share
purchases before the redemption is processed.
Additional Information
Each Fund has authorized capital stock of 10,000,000 shares of $1.00 par value.
Each share entitles the holder to participate equally in dividends and
distributions declared by the Fund and in its remaining net assets on
liquidation after satisfaction of outstanding liabilities. Fund shares are
fully paid and nonassessable when issued; have no preemptive or conversion
rights; are transferable without restriction; and are redeemable at net asset
value.
On matters submitted for a shareholder vote, each shareholder is entitled to
one vote for each share owned. Fractional shares have proportionally the same
rights as do full shares.
As of April 12, 1996, Jefferson-Pilot Life Insurance Company owned
beneficially 400,000 shares or 16.81% of the Capital Appreciation Fund's
outstanding shares and 730,821 shares or 32.29% of the Bond Fund's outstanding
shares. That Company, like JP Management, is a wholly-owned subsidiary of
Jefferson-Pilot Corporation, Greensboro, North Carolina, which is deemed to
control the Funds.
Shareholder inquires should be directed to Investors Fiduciary Trust Company,
127 West 10th Street, Kansas City, MO 64105-1716, (Phone: 1-800-292-6701)
In the opinion of the staff of the Securities and Exchange Commission, the use
of this combined prospectus may make each Fund liable for any misstatement or
omission in this prospectus regardless of the Fund to which it pertains.
<PAGE>
Jefferson-Pilot Capital Appreciation Fund, Inc.
100 North Greene Street
Greensboro, North Carolina 27401
Telephone 1-800-458-4498
_________________________________________________________________
Statement of Additional Information
May 1, 1996
_________________________________________________________________
Page
Table of Investment Objectives and Policies B-1
Contents Investment Restrictions B-1
The Investment Adviser B-3
Brokerage B-4
Purchase and Redemption of Shares B-5
The Fund's Distributor B-6
The Fund's Directors and Officers B-6
General Information B-7
Financial Statements B-9
_________________________________________________________________
This Statement of Additional Information is not a prospectus
but supplements and should be read in conjunction with the current
Prospectus dated May 1, 1996 of Jefferson-Pilot Capital
Appreciation Fund, Inc. ("Fund"). A copy of the Prospectus may
be obtained by contacting the Fund's principal distributor,
Jefferson-Pilot Investor Services, Inc. ("Investor Services") at the
address or telephone number shown on the cover page.
Investment Objectives and Policies
The Fund's investment objectives and how it hopes to achieve
those objectives are described on page one of the Prospectus.
There can be no assurance that these objectives will be achieved.
The objectives may not be changed without the approval of a
majority of the Fund's shareholders. A majority means: the lesser
of (i) a majority of the Fund's outstanding voting
securities, or (ii) 67 percent of the shares present at a
shareholder's meeting at which more than 50 percent of the
outstanding shares are present or represented by proxy.
Investment Restrictions
In addition to, or amplification of, the investment restrictions
set forth in the Prospectus, the Fund may not:
1. Issue senior securities.
2. Purchase securities on margin or sell short, except it
may obtain such short-term credits as
are necessary for the clearance of transactions.
<PAGE>
3. Write, purchase or sell puts, calls or combinations thereof.
4. Borrow money except that, as a temporary measure for
extraordinary or emergency purposes and not for investment
purposes, the Fund may borrow up to 5% of the value of
its total assets.
5. Act as an underwriter of securities of other issuers,
except that the Fund may invest up to 10% of the value of
its net assets (at time of investment) in portfolio
securities which the Fund might not be free to sell
to the public without registration of such securities
under the Securities Act of 1933.
It may be difficult for the Fund to sell restricted securities at
prices representing their fair market value except pursuant to an
effective registration statement under the Securities Act of
1933. If registration of restricted securities is necessary, a
considerable period of time may elapse between the decision to
sell and the effective date of the registration statement. During
that time the price of securities to be sold may be affected by
adverse market conditions.
In purchasing restricted securities, the Fund will endeavor to
have the issuer agree to register the securities on request and
pay the registration expenses. The Fund may be obliged, however, to
bear all or part of these expenses. The Fund's Board of
Directors will value restricted securities in good faith
in determining the net asset value of Fund shares. The valuations
will be made on an individual basis in light of the particular
circumstances affecting each restricted security, including market
value (if any), the period of time the restrictions are in force, and
other relevant factors. The Fund has not for the past 12 months
owned any restricted securities and has no present intention of
acquiring such securities.
6. Purchase or sell real estate or interests in real
estate, nor interest in real estate investment trusts or real
estate limited partnerships (however, the Fund may purchase
interests in real estate in investment trusts whose securities
are registered under the Securities Act of 1933 and readily
marketable).
7. Engage in the purchase and sale of commodities or commodity contracts.
8. Make loans, except to the extent that either of the following is
deemed to constitute a loan: (a) purchases of a portion of an
issue of a debt security distributed to the public; or (b)
investments in "repurchase agreements".
9. Purchase the securities (except U.S. Government securities) of
any one issuer if immediately after and as a result of such
purchase (a) the value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value of the Fund's
total assets, or (b) the Fund owns more than 10% of the
outstanding voting securities of any one class of securities
of such issuer.
<PAGE>
10. Purchase the securities of open-end investment companies. The
Fund may purchase the securities of other investment companies
provided that (a) immediately after such purchase the Fund and
companies controlled by the Fund, or other investment companies
having the same investment adviser as the Fund, do not own more
than 10% of the investment company whose securities are being
purchased; (b) the Fund cannot invest more than 10% of its
total assets in the securities of other investment companies;
and (c) such purchases are made in the open market
where no commission or profit to a sponsor or dealer results
other than the customary broker's commission. The restrictions
of the preceding sentence do not apply in connection with a
merger, consolidation, or plan of reorganization.
11. Mortgage, pledge, hypothecate, or in any manner transfer, as
security for indebtedness, any securities owned or held by the Fund.
12. Participate on a joint or joint and several basis in
any trading account in securities or effect a short sale
of any security, except in connection with an underwriting
in which it is a participant in the circumstances specified
in Paragraph 5.
13. Purchase or retain the securities of any issuer if
those officers and directors of the Fund, its adviser or
underwriter owning individually more than 0.5% of
the securities of such issuer together own more than 5%
of the securities of such issuer.
14. Invest in companies for the purpose of exercising control
or management.
15. Invest in foreign securities other than securities issued by
Canadian companies.
16. Invest in interests of oil, gas, or other mineral exploration
or development programs, (including oil, gas, or mineral leases).
The investment restrictions in Paragraphs 1 through 13 above
and on page one of the Prospectus are fundamental policies
and may not be changed without the approval of a majority
of the Fund's shareholders. The policies mentioned in Paragraphs
14-16 above are not fundamental and my be changed without
shareholder approval.
While the Fund will not purchase illiquid, including restricted,
securities if such purchase would cause its then total investment
in such securities to exceed 10% of the value of its net assets,
the Fund could through the decrease in values of its other
securities, for example, at sometime own illiquid, including
restricted, securities having a value in excess of 10% of the
value of its net assets. In that event, the Fund will promptly
take such action as its Board of Directors deems appropriate to
assure the continued liquidity of the Fund.
<PAGE>
The Investment Adviser
The Fund's investment adviser, JP Investment Management Company
("JP Management"), like Investor Services, is a wholly-owned subsidiary of
Jefferson-Pilot Corporation, an insurance holding company. E.J. Yelton,
John C. Ingram, W. Hardee Mills, and J. Gregory Poole are
officers and/or directors of the Fund and of JP Management.
Their positions with the Fund and/or JP Management are (with the
Fund position shown first) President, Treasurer and
Director/President and Director; Director/Senior Vice President,
Treasurer and Director; Vice President/Vice President; and
Secretary/Secretary, respectively.
JP Management's services are provided under an Investment
Advisory Agreement with the Fund dated January 26, 1971.
Under the terms of the agreement, JP Management provides personnel,
including executive officers for the Fund, and compensates the
Fund's directors who are affiliated with JP Management or its
affiliated companies. JP Management also furnishes, or causes to be
furnished, at its own expense office space, facilities and
necessary executive and other personnel for conducting the Fund's
affairs and pays all expenses incurred by it or the Fund in connection
with the administration of the investment affairs of the Funds.
The Fund pays all other corporate expenses incurred in its
operations except that Investor Services bears the expenses
relating to the continuous public offering of the Fund's shares.
Among others, the Fund pays its taxes (if any), brokerage
commissions on portfolio transactions, expenses relating to the
issue, transfer redemption and pricing of shares, disbursement of
dividends and other distributions, custodian fees, auditing and
legal expenses, compensation of unaffiliated directors, and
expenses in connection with meetings of directors and shareholders.
As compensation for its services, JP Management receives from the
Fund a fee at an annual rate of 1/2 of 1% of the Fund's average
net asset value. The fee is payable monthly, on the basis of
the Fund's average daily net asset value during the monthly
period computed in the manner used in determining the public offering
price of Fund shares (see "How To Determine Net Asset Value" in
the prospectus).
If, in any fiscal year, the total of the fund's ordinary
business expenses (including the investment advisory fee but
excluding taxes, portfolio brokerage commissions and interest)
exceeds 1% of the Fund's average daily net asset value, JP
Management pays the excess. The payment of the investment
advisory fee at the end of any month is reduced or postponed so that
at the end of any month there is not any accrued but unpaid
liability under this expense limitation. The Fund's ordinary
business expenses did not, during fiscal years 1993, 1994, or
1995 exceed 1% of its average daily net asset value.
The amount of JP Management's advisory fee for fiscal year
1993 was $179,854, for fiscal year 1994 was $ 178,839, and for
fiscal year 1995 was $177,665.
<PAGE>
Under a Service Agreement between the Fund, JP Management,
Jefferson-Pilot Life Insurance Company and Jefferson-Pilot
Investments, Inc. ("Companies"), which agreement is
dated January 25, 1984, the Companies have agreed to furnish such
personnel, services and facilities as may be reasonably needed by
JP Management in connection with its performance
under the Investment Advisory Agreement, and JP Management has
agreed to compensate the Companies for their services in this regard.
Because of the arrangements under the Service
Agreement, the Companies might be deemed to be investment
advisers of the Fund, and the Service Agreement an investment
advisory contract, for purposes of the Investment Company
Act of 1940. However, the Companies have been advised by counsel
that they are not by reason of such arrangements investment advisers
under that Act.
For the years ended December 31, 1993, 1994, and 1995 the
aggregate amount paid by JP Management to the Companies under
this Service Agreement and similar service agreements
between JP Management, the Companies and other mutual funds
managed by JP Management was $352,095, $444,313, and $347,048,
respectively.
The Investment Advisory Agreement and the Service Agreement may,
independently of each other, continue in force from year to year
if the continuance of each such agreement is approved
at least annually by the Fund's Board of Directors, including the
specific approval with respect to the continuance of each such
agreement of a majority of the Directors who are not parties to the
particular agreement or interested persons (as the term is
defined in the Investment Company Act of 1940) of any such party,
cast in person at a meeting called for the purpose of voting on
approval of the particular agreement.
The Investment Advisory Agreement and the Service Agreement may
each be terminated at any time without the payment of any penalty
on 60 days' notice to the other parties either by a vote of
the Fund's Board of Directors or by a vote of the majority of the
Fund's shareholders. The Investment Advisory Agreement and the
Service Agreement will automatically terminate in the
event of their assignment.
The Investment Advisory Agreement may be terminated by JP
Management on 90 days' written notice to the Fund. The Service
Agreement may be terminated on 90 days' written notice
to the Fund and the other parties by JP Management or any of the
Companies.
The Fund's name has been adopted with the permission of
Jefferson-Pilot Corporation and its continued use is subject to
the right of Jefferson-Pilot Corporation to withdraw this permission at
any time. If the permission is withdrawn, but JP Management
proposes to continue as the Fund's investment adviser, the
Investment Advisory Agreement will be submitted to Fund shareholders
for approval.
<PAGE>
Brokerage
Transactions on stock exchanges and other agency transactions
involve the payment by the Fund of negotiated brokerage commissions.
Such commissions vary among different brokers. Also, a
particular broker may charge different commissions according to
such factors as the difficulty and size of the transaction.
There is generally no stated commission in the case of securities
traded in the over-the-counter markets, or for fixed income
securities (which currently includes most of the Fund's portfolio
transactions), but the price paid by the Fund usually includes an
undisclosed dealer commission or mark-up. In underwritten
offerings, the price paid by the Fund includes a disclosed, fixed
commission or discount retained by the underwriter or dealer.
JP Management, which places all orders for the purchase and
sale of securities for the Fund, has no formula for the allocation
of brokerage business in the purchase and sale of securities for
the Fund. Purchase and sale orders are placed with the primary
objective of obtaining the best execution. Subject to the foregoing,
orders are placed with broker-dealer firms giving
consideration to the quality, quantity and nature of the firms'
professional services which include execution, clearance procedures,
and statistical data and research information to the Fund and JP
Management. In pursuing this objective, JP Management may
purchase securities in the over-the-counter market, utilizing the
services of principal market makers unless better execution can
be obtained elsewhere, and may purchase securities listed on an
exchange from non-exchange members in transactions off the exchange.
Although any statistical, research or other information and services
provided by broker-dealers may be useful to JP Management, its dollar
value is indeterminable and its availability does not serve to
materially reduce JP Management's normal research activities or expenses.
Any such information, which includes such matters as
general economic and security market reviews, industry and
company reviews, evaluations of securities and recommendations as to
the purchase and sale of securities, must still be analyzed
and reviewed by JP Management's personnel. JP Management may, in
recognition of the value of brokerage or research services provided
by the broker, pay such broker a brokerage commission in excess of that
which another broker might have charged for effecting the same
transaction. JP Management will not, however, effect a transaction
at such higher commission unless it determines in good faith that the
amount of the higher commission is reasonable in relation to the value
to the Fund of the brokerage and research services being provided.
Statistical research or other information or services received by
JP Management from broker-dealers may be used by JP Management in
servicing various of its clients (including the Fund),
although not all these services are necessarily useful and of
value in servicing the Fund. The total amount of brokerage commission
on purchase and sale transactions in fiscal year 1993 was
$45,886, in fiscal year 1994 was $141,984, and in fiscal year
1995 was $98,156, one hundred percent of which was paid to brokers
furnishing statistical data research information to JP Management.
<PAGE>
Purchase and Redemption of Shares
Reference is made to the information in the Prospectus under
"How to Purchase Shares" and "How to Redeem Shares" which describes
the manner in which the net asset value of the shares
of the fund is computed as of the close of trading on each day
the New York Stock Exchange is open for trading, and on any other
day in which there is a sufficient degree of trading in the
Fund's portfolio securities to materially affect net asset value,
and how the offering price is determined based on such net asset
value plus a sales commission, and the manner of placing
orders for the purchase of shares, including special purchase
plans and methods. It also sets forth specific directions for the
redemption of shares at net asset value and describes, and tells the
procedures to be followed in exercising, the investment privilege.
The Fund's shares are not valued on New Year's Day, President's Day,
Good Friday, Memorial Day, July 4, Labor Day, Thanksgiving Day or
Christmas Day, as the New York Stock Exchange closes on those days.
Individual Retirement Accounts ("IRA's") are available for
individuals whether or not they are active participants in any
other tax qualified employer plan. Investors Fiduciary Trust Company,
127 W. 10th Street, Kansas City, MO 64105, has agreed to act as
trustee for IRA's which invest in the Fund for a fee of $12 a year
and utilize a model form available from Investor Services. An
employer who has established a pension or profit-sharing plan for
employees may purchase Fund shares for such a program. Forms and
additional information for those individuals and
institutions wishing to purchase shares of the Fund in
conjunction with a tax-deferred retirement plan are available through
Investor Services to be used as a guide for the investor's own tax adviser.
Fund shares may be sold at net asset value to employee benefit
plans qualified under Section 401 of the Internal Revenue Code
covering employees of the Fund, Jefferson-Pilot Corporation
or affiliates thereof. In addition, Fund shares may be sold at
net asset value to (a) current or retired directors and officers of
the Fund; current or retired employees of Jefferson-Pilot Corporation
or affiliates thereof; spouses, minor children and grandchildren
of the above persons; and parents of employees and parents of spouses of
employees of Jefferson-Pilot Corporation or affiliates thereof;
(b) brokers/dealers which have entered into a sales agreement
with Investor Services, and to their bona fide full-time
employees, spouses of such employees and sales representatives who
have acted as such for not less than 180 days; and (c) to any trust,
pension, profit-sharing or other benefit plan (whether or not such
plans are qualified under Section 401 of the Internal Revenue Code)
established for such person, provided written assurance is given that
the purchase is made for investment purposes and that the Fund shares
will not be resold except through redemption or repurchase by or
on behalf of the Fund. Such persons will be given notice that they
are eligible to purchase the Fund's shares at net asset value,
but they will not otherwise be solicited to purchase shares of
the Fund. Investor Services incurs very few, if any, expenses in
selling shares to such persons.
<PAGE>
The Fund's Distributor
Jefferson-Pilot Investor Services, Inc. ("Investor Services"),
formerly Jefferson-Pilot Equity Sales, Inc., is the principal
distributor of the Fund's shares and acts as agent of the Fund in the
sale of its shares. Investor Services may make sales agreements
with dealers to sell Fund shares. In the fiscal year ended
December 31, 1993 sales of Fund shares resulted in gross commissions
of $163,644, in fiscal year 1994 the amount was $98,653, and in
fiscal year 1995 the amount was $66,827. All of these commissions
were retained by Investor Services. Investor Services did not receive,
directly or indirectly, any other compensation from the Fund
during these years.
The Fund's Directors and Officers
The following list of the Fund's directors and executive officers, all
of whom are also directors and/or officers of Jefferson-Pilot Investment
Grade Bond Fund, Inc., JP Capital Appreciation Fund, Inc., and JP
Investment Grade Bond Fund, Inc., includes information as to their principal
occupations during the past five years and their principal affiliations.
Name, Address & Position Principal Occupation
with Fund During Past 5 years
E. J. Yelton* Senior Vice President - Investments,
Director, President and Treasurer Jefferson-Pilot Corporation and
100 North Greene Street Executive Vice President - Investments,
Greensboro, North Carolina Jefferson-Pilot Life Insurance Company
since October 1993; prior thereto,
President and CEO, ING North America
Investment Centre/Member of ING Group;
Director, Jefferson-Pilot Investor
Services; President and Director,
JP Management
John C. Ingram* Senior Vice President, Jefferson-Pilot
Director Life Insurance Company since November
100 North Greene Street 1988 and prior thereto, Vice President;
Greensboro, North Carolina Senior Vice President, Treasurer and
Director, JP Management
Richard Wolcott McEnally Professor of Investment Banking,
Director University of North Carolina at
401 Brookside Drive Chapel Hill
Chapel Hill, North Carolina
William Edward Moran Senior Vice President, Connors Investor
Director Services, Inc. since January 1995;
5206 Barnfield Road prior thereto, Chancellor, University
Greensboro, North Carolina of North Carolina at Greensboro,
J. Lee Lloyd Managing Director, Lloyd & Company
Director since April 1991; prior thereto,
16 Irving Park Lane Vice President, Goldman, Sachs & Co.
Greensboro, North Carolina
J. Gregory Poole Assistant Secretary, Jefferson-Pilot
Secretary Corporation, since January 1994;
100 North Greene Street Associate Counsel and Assistant
Greensboro, North Carolina Secretary, Jefferson-Pilot Life
Insurance Company since February
1994; Attorney and Assistant
Secretary, January 1994, and prior
thereto, Attorney
*Messrs. Yelton and Ingram are interested persons (as that term
is defined in the Investment Company Act of 1940, as amended) of the Fund.
<PAGE>
The following officers of the Fund also serve as officers
and/or directors of JP Management and Investor Services: E. J. Yelton,
President and Treasurer of the Fund, is President and a Director of JP
Management and a Director of Investor Services; W. Hardee Mills, Jr.,
Vice President of the Fund, is Vice President of JP Management; and J.
Gregory Poole, Secretary of the Fund, is Secretary of Investor Services
and JP Management. Each director of the fund also serves as a director
for 3 other funds in the Jefferson-Pilot Investment Management Fund
Complex. Messrs. Yelton, Poole and Mills positions with the
other companies in the Jefferson-Pilot Investment Management Fund
Complex similar to the positions held with the Fund. The
other companies within the Fund Complex have the same investment
adviser as does the Fund.
The following table provides information regarding the
compensation each director was paid by the Fund and the Fund
Complex for the year ended December 31, 1995.
COMPENSATION TABLE
(1) (2) (3) (4) (5)
Pension or Total
Retirement Estimate Compensation
Benefits Annual From Fund
Aggregate Accrued as Benefits and 3 other
Name of Person, Compensation Part of Fund upon funds in
Position from Fund Expenses Retirement Complex
John C. Ingram $ 0 $ 0 $ 0 $ 0
Director
J. Lee Lloyd 1,220 0 0 4,880
Director
Richard W. 1,220 0 0 4,880
McEnally
Director
William E. Moran 1,220 0 0 4,880
Director
E. J. Yelton 0 0 0 0
Director, President,
Treasurer
The Board of Directors met five times during the year.
During the year ended December 31, 1995, directors not
employed by the Fund or its affiliates received a $100 director's
fee for each meeting attended, amounting to an aggregate of
$500. In addition, each of the non-affiliated directors receives
a fee of $720 per year, payable in equal monthly installments.
<PAGE>
General Information
The ownership of the Fund's outstanding securities by
Jefferson-Pilot Life Insurance Company, a North Carolina
corporation with its principal office at 100 North
Greene Street, Greensboro, North Carolina 27401, is disclosed
under "Additional Information" in the Prospectus. That
company is a wholly-owned subsidiary of Jefferson-Pilot
Corporation, a publicly held North Carolina corporation with
its principal office at 100 North Greene Street, Greensboro, North
Carolina 27401. The Fund's officers and directors together own
less than 1% of its securities.
Investors Fiduciary Trust Co., 127 W. 10th Street, 12th Floor,
Kansas City, MO 64105, acting as custodian, has custody of all
the Fund's securities and cash. That company attends to the
collection of principal and income, and payment for and
collection of proceeds of securities bought and sold by the Fund.
The Fund's independent accountants are McGladrey & Pullen, 555
Fifth Avenue , 8th Floor, New York, New York 10017-2416, who audit
and report on the Fund's annual financial statements,
review certain regulatory reports, prepare the Fund's income tax
returns, and perform other professional accounting, auditing, tax and
advisory services when engaged to do so by the Fund.
The selection of independent accountants will be submitted annually
to the Fund's shareholders for approval. Shareholders will receive
annual audited financial statements and quarterly unaudited financial
statements.
<PAGE>
Statement of Assets and Liabilities
December 31, 1995
Assets
Investment in securities at value (cost $29,447,919) $ 37,808,342
Cash 364,199
Receivables:
Capital shares sold 1,970
Dividends 56,055
Total Assets 38, 230,566
Liabilities
Payables:
Capital shares redeemed 66,990
Securities purchased 258,090
Accrued expenses 74,406
Total Liabilities 399,486
Net Assets
Net Assets, equivalent to $15.96 per share on 2,370,053
shares of capital stock outstanding (Note 2) $ 37,831,080
Computation of public offering price:
Net asset value per share $ 15.96
Offering price per share (100/95.5 x $15.96)
(reduced on sales of $25,000 or more) $ 16.71
See Notes to Financial Statements.
<PAGE>
Statement of Operations
Year Ended December 31, 1995
Investment Income:
Interest $ 53,147
Dividends 828,748
Total income 881,895
Expenses:
Investment Adviser's fee (Note 3) 177,665
Custodian and Transfer Agent fees 67,583
Directors' fees 3,660
Professional fees 25,511
Shareholder accounting services (Note 3) 21,600
Printing and mailing 13,200
Other 1,297
Total expenses 310,516
Less expenses offset (Note 5) ( 18,240)
Net expenses 292,276
Investment income - net 589,619
Realized and Unrealized Gain on Investments:
Net realized gain on investments 2,251,129
Unrealized appreciation of investments for the year 7,655,872
Net gain on investments 9,907,001
Net increase in net assets from operations $10,496,620
See Notes to Financial Statements.
<PAGE>
Statements of Changes in Net Assets
Years Ended December 31, 1995 and 1994
1995 1994
Increase (Decrease) in Net Assets from:
Operations:
Investment income - net $ 589,619 $ 622,612
Net realized gain on investments 2,251,129 7,132,162
Unrealized appreciation (depreciation)
for the year 7,655,872 ( 9,494,642)
Net increase (decrease) in net assets
from operations 10,496,620 ( 1,739,868)
Dividends paid to shareholders from:
Investment income - net ( 568,392) ( 596,160)
Net realized gain on investments ( 1,486,668) ( 7,155,326)
Capital share transactions (Note 2) ( 2,993,629) 3,828,530
Total increase (decrease) 5,447,931 ( 5,662,824)
Net Assets
Beginning of year 32,383,149 38,045,973
End of year (including undistributed net
investment income of $48,707 and
$27,480, respectively) $37,831,080 $32,383,149
See Notes to Financial Statements.
<PAGE>
Statement of Investments
December 31, 1995
Number of Shares
Common Stocks - 96.80% or Principal Amount Value
Aerospace/Defense _ 2.05%
Lockheed-Martin Corporation 5,700 $ 450,300
Loral Corporation 9,200 325,450
Auto & Trucks - .22%
Honda Motor Company, Ltd. 2,000 84,000
Banks - 4.41%
Bank of New York Company, Inc 11,000 536,250
Chase Manhattan Corporation 5,700 345,562
Citicorp 11,700 786,825
Biotechnology - 1.85%
Amgen, Inc. 11,800 699,150*
Broadcasting - 2.53%
Capital Cities/ABC, Inc. 6,600 814,275
US West Media Group, Inc. 7,600 144,400*
Chemicals - Major - 4.36%
Dow Chemical Company 6,200 436,325
Monsanto Company 9,900 1,212,750
Computer Software - 1.67%
Informix Corporation 7,000 210,000*
Silicon Graphics Computer System 8,200 225,500*
Sybase, Inc. 5,500 196,625*
Conglomerates - 1.00%
AlliedSignal, Inc. 8,000 380,000
Drugs - 6.41%
Lilly (Eli) & Company 5,708 321,075
Merck & Company, Inc. 5,400 355,050
Mylan Laboratories, Inc. 17,550 412,425
Pharmacia-Upjohn, Inc. 13,000 503,750
Schering-Plough Corporation 15,200 832,200
Electric Equipment - Major - 3.67%
General Electric Company 13,000 936,000
Kuhlman Corporation 36,000 450,000
Electronics - Instrument - 2.78%
General Instrument Corporation 8,300 194,012*
3Com Corporation 10,000 466,250*
Varian Associates, Inc. 8,200 391,550
Electronics - Semi - 1.99%
LSI Logic Corporation 7,200 235,800*
Texas Instruments, Inc. 10,000 517,500
<PAGE>
Entertainment - .94%
Disney, (Walt) & Company 6,000 354,000
Financial Services - .61%
Money Store, Inc. 15,000 232,500
Foods - 1.99%
Sara Lee Corporation 23,600 752,250
Footwear - 1.33%
Nike, Inc. 7,200 501,300
Hospital - Management - 3.73%
Columbia/HCA Healthcare Corporation 9,900 502,425
Medaphis Corporation 14,000 518,000*
Vencor, Inc. 12,000 390,000*
Hospital - Supplies - 3.01%
Baxter International, Inc. 5,700 238,687
Guidant Corporation 5,046 213,194
Johnson & Johnson 8,000 685,000
Information Processing - 2.05%
Equifax, Inc. 36,200 773,775
Insurance - Multi-Line - 4.61%
Aflac, Inc. 9,000 390,375
Allstate Corporation 12,300 505,838
American General Corporation 6,500 226,687
CIGNA Corporation 6,000 619,500
Insurance - Property & Casualty - .96%
Prudential Reinsurance Holdings, Inc. 15,500 362,313
Machinery - Agricultural - .54%
Varity Corporation 5,500 204,188*
Merchandising - Department - 1.92%
Dayton Hudson Corporation 3,800 285,000
Federated Department Stores, Inc. 16,000 440,000*
Merchandising - Drugs - .71%
Eckerd Corporation 6,000 267,750*
Merchandising - Special - 2.54%
Borders Group, Inc. 26,500 490,250*
Circuit City Stores, Inc. 17,000 469,625
Miscellaneous Consumer Cyclical - .44%
Kelly Services, Inc. 6,000 166,500
Miscellaneous Financial - 5.39%
Countrywide Credit Industries, Inc. 42,000 913,500
Dean Witter, Discover & Company 6,300 296,100
Federal Home Loan Mortgage Corporation 4,600 384,100
First USA, Inc. 10,000 443,750
Natural Gas - Diversified - .74%
Questar Corporation 8,300 278,050
<PAGE>
Oils - Integrated Domestic - 5.70%
Amoco Corporation 9,300 668,438
Atlantic Richfield Company 8,400 930,300
Enron Oil & Gas Company 10,500 257,250
Phillips Petroleum Company 8,800 300,300
Oils - Integrated International - 4.17%
Mobil Corporation 6,900 772,800
Royal Dutch Petroleum Company 5,700 804,413
Oil Services - .78%
Oceaneering International, Inc. 23,000 296,125*
Paper & Forest Products - .34%
Sonoco Products Company 4,830 126,787
Railroads - .92%
CSX Corporation 7,600 346,750
Telecommunications - 1.46%
DSC Communications Corporation 15,000 553,125*
Textile - Apparel - 1.35%
Intimate Brands, Inc. 15,000 225,000
Ross Stores, Inc. 15,000 286,875
Tobacco - 1.34%
Philip Morris Companies, Inc. 5,600 506,800
Transportation - Miscellaneous - .51%
Federal Express Corporation 2,600 192,075*
Utilities - Communications - 7.56%
Bell Atlantic Corporation 3,700 247,438
BellSouth Corporation 7,400 321,900
Century Telephone Enterprises, Inc. 8,400 266,700
Frontier Corporation 32,000 960,000
SBC Communications, Inc. 3,600 207,000
Sprint Corporation 14,600 582,175
US West Communications Group, Inc. 7,600 271,700
Utilities - Electric - 8.22%
American Electric Power Company, Inc 6,600 267,300
CMS Energy Corporation 9,800 292,775
Carolina Power & Light Company 4,100 141,450
CINergy Corporation 13,700 419,562
Consolidated Edison Company of
New York, Inc. 5,900 188,800
Dominion Resources, Inc. 4,600 189,750
Entergy Corporation 12,000 351,000
FPL Group, Inc. 8,200 380,275
Illinova Corporation 9,600 288,000
Northeast Utilities 8,650 210,844
PECO Energy Company 4,900 147,612
Public Service Enterprise Group, Inc. 7,500 229,687
Total Common Stocks (Cost - $28,253,464+) 36,598,687
Preferred Stocks - 1.35%
Tobacco - 1.35%
RJR Nabisco Holdings, Inc. Pfd C 80,000 510,000
<PAGE>
Total Preferred Stocks (Cost $494,800+) 510,000
Short-Term Securities - 1.85%
Ford Motor Credit Company, 1/03/96 $ 700,000 699,655
Total Short-Term Securities (Cost $699,655+) 699,655
Total Investments (Cost $29,447,919+) $37,808,342
*Non-income producing.
+Aggregate cost for Federal income tax purposes is the same.
See Notes to Financial Statements.
<PAGE>
Notes to Financial Statements
Note 1. Significant Accounting Policies:
Jefferson-Pilot Capital Appreciation Fund, Inc., is an open-end
management investment company registered under the Investment Company Act
of 1940. The Fund's primary investment objective is long-term capital
appreciation. The Fund seeks to achieve this objective by investing
substantially all of its assets in common stocks of companies
recognized as leaders in their respective industries, however, other
types of securities may be purchased depending upon the
judgement of management. The following is a summary of
significant accounting policies followed in the preparation of its
financial statements:
Valuation of Securities - Investments are stated at value based
on the closing prices reported on national securities exchanges
on the last business day of the year, or for over-the-counter
securities, at the last bid price, except that short-term
securities are stated at amortized cost which approximates value.
Federal Income Taxes - It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to "regulated
investment companies" and to distribute all of its taxable
income to its shareholders. Therefore, no provision for Federal
income tax is required.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could
differ from those estimates.
General - Securities transactions are accounted for on the trade
date. Dividend income and distributions to shareholders are recorded
on the ex-dividend date. Interest income is accrued as earned.
Note 2. Capital Stock:
At December 31, 1995, 10,000,000 shares of capital stock ($1.00
par value) were authorized and capital paid-in amounted to $28,499,042.
Transactions in capital stock were as follows:
Year Ended Year Ended
December 31, 1995 December 31, 1994
Shares Amount Shares Amount
Sold 153,009 $ 2,164,646 178,334 $ 2,952,364
Issued on reinvestment
of dividends 109,424 1,662,936 489,064 6,160,598
Redeemed (469,652) ( 6,821,211) (322,174) ( 5,284,432)
Net increase (decrease) (207,219) ($ 2,993,629) 345,224 $ 3,828,530
<PAGE>
Note 3. Investment Advisory Fee and other Transactions with Affiliates:
JP Investment Management Company received investment advisory
fees of $177,665 during the year ended December 31, 1995. This fee is
computed at the annual rate of 0.5% of the Fund's average daily net
asset value. If the Fund's expenses, excluding interest and taxes,
exceed 1% of the average daily net asset value, the Investment Adviser will
pay the excess. No such reimbursement was required during the year.
Expenses include $21,600 of fees paid to JP Investment Management Company
for shareholder accounting services.
Jefferson-Pilot Investor Services, Inc. received sales commissions of
$66,827 in its capacity as Principal Distributor for the Fund.
Note 4. Investment Transactions:
Purchases and sales of investment securities, excluding short-term
securities, were $22,431,918 and $27,025,361, respectively.
Realized gains and losses are reported on an identified cost basis.
Accumulated undistributed net realized gain at December 31, 1995 was $922,908.
At December 31, 1995, the aggregate gross unrealized appreciation
and depreciation of portfolio securities was as follows:
Unrealized appreciation $8,565,109
Unrealized depreciation ( 204,686)
Net unrealized appreciation $8,360,423
Note 5. Expense Offset Arrangement:
The Fund has an arrangement with its custodian and transfer agent
whereby credits earned on cash balances maintained at the custodian
are used to offset custody and transfer agent charges.
These credits amounted to $18,240 for the year ended December 31, 1995.
Note 6. Selected Financial Information:
Years Ended December 31,
1995 1994 1993 1992 1991
Per share operating performance
(for a share outstanding throughout the year)
Net asset value,
beginning of year $12.56 $17.05 $17.44 $18.02 $14.09
Income from investment
operations:
Net investment income .25 .29 .23 .23 .32
Net realized and unrealized
gain (loss) on investments 4.03 ( 1.12) 1.04 .75 4.13
Total from investment
operations 4.28 ( .83) 1.27 .98 4.45
Less distributions:
Dividends from net
investment income ( .24) ( .28) ( .22) ( .27) ( .33)
Distributions from net
realized gains ( .64) ( 3.38) ( 1.44) ( 1.29) ( .19)
Total distributions ( .88) ( 3.66) ( 1.66) ( 1.56) ( .52)
Net asset value, end of year $15.96 $12.56 $17.05 $17.44 $18.02
Total return (without
deduction of sales load) 34.47% ( 4.63)% 7.68% 5.60% 32.22%
Ratios/supplemental data:
Net assets, end of year
(000 omitted) $37,831 $32,383 $38,045 $34,898 $33,836
Ratios to average net assets:
Expenses .87% .83% .84% .87% .87%
Net investment income 1.66 1.74 1.30 1.34 1.98
Portfolio turnover rate 65.27 143.81 26.89 53.38 36.70
<PAGE>
Independent Auditor's Report
To the Board of Directors and Shareholders
Jefferson-Pilot Capital Appreciation Fund, Inc.
We have audited the accompanying statement of assets and
liabilities and the statement of investments of Jefferson-Pilot
Capital Appreciation Fund, Inc. as of December 31, 1995, and the
related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in
the period then ended, and the selected financial information for each of
the five years in the period then ended. These financial
statements and selected financial information are the responsibility
of the Fund's management. Our responsibility is to express an
opinion on these financial statements and selected financial
information based on our audits. We conducted our audits in accordance
with generally accepted auditing standards. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and selected financial
information are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned as of December
31, 1995, by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected financial
information referred to above present fairly, in all material respects,
the financial position of Jefferson-Pilot Capital Appreciation Fund,
Inc. as of December 31, 1995, the results of its operations, the
changes in its net assets, and the selected financial information for the
periods indicated, in conformity with generally accepted accounting principles.
McGladrey & Pullen, LLP
/s/ McGladrey & Pullen, LLP
New York, New York
January 11, 1996
<PAGE>
PART C
OTHER INFORMATION
Page in
Statement of
Item 24. Financial Statements and Exhibits Additional Information
(a) Financial Statements.
Included in the Statement of Additional Information:
Statements of Assets and Liabilities
at December 31, 1995 B-9
Statements of Operations for the year
ended December 31, 1995 B-10
Statements of Changes in Net Assets for
the years ended December 31, 1995 and 1994 B-11
Statement of Investments at December 31, 1995 B-12
Notes to Financial Statements B-16
Report of Certified Public Accountants B-19
Filed as part of Part C of Registration Statement:
None
All other financial statements are omitted
because they are not applicable or the
required information is shown in the
financial statements or the notes thereto.
(b) Exhibits.
1(a) Articles of Incorporation (incorporated by reference to
Exhibit 1 of Form N-8B-1).
2. By-Laws (incorporated by reference to Post-Effective
Amendment No. 13 to Amendment No. 13 to the Registrant's Form N-1A).
3. None.
4. Copy of security (incorporated by reference to Exhibit
4(a) of Form N-8B-1).
5. Investment Advisory Agreement (incorporated by reference
to Exhibit 5(a) of Form N-8B-1).
6. Distribution Agreement (incorporated by reference to
Exhibits 6(a) and 6(b) of Form N-8B-1).
7. None.
<PAGE>
8. Custody Agreement (incorporated by reference to
Post-Effective Amendment No. 42 to the Registrant's Form N-1A).
9(a) Service Agreement (incorporated by reference to
Post-Effective Amendment No. 30 to the Registrant's Form N-1).
9(b) Fund Accounting Agreement between the Registrant and its
investment adviser dated September 26, 1986 (incorporated by
reference to Post-Effective Amendment No. 36 to the
Registrant's Form N-1A).
9(c) Agency Agreement (incorporated by reference to
Post-Effective Amendment No. 42 to the Registrant's Form N-1A).
10. Not Applicable.
11. Consent of Certified Public Accountants.
12. Not Applicable.
13. None.
14. None.
15. None.
16. Not Applicable.
Item 25. Persons Controlled By or Under Common Control With Registrant
Jefferson-Pilot Life Insurance Company, incorporated under the
insurance laws of the State of North Carolina, owns beneficially
and of record 400,000 shares of Registrant's common stock, which
represents approximately 16.81% of Registrant's outstanding
voting securities as of April 12, 1996. Jefferson-Pilot
Corporation, a North Carolina corporation, owns (a) all the
outstanding voting securities of Jefferson-Pilot Life Insurance
Company; (b) all of the outstanding voting securities of JP
Investment Management Company, a North Carolina corporation,
Registrant's investment adviser; and (c) all the outstanding
voting securities of Jefferson-Pilot Investor Services, Inc., a
North Carolina corporation, Registrant's principal underwriter.
Separate financial statements are filed for the Registrant. All
of Jefferson-Pilot Corporation's subsidiaries' financial
statements are included in Jefferson-Pilot Corporation's
consolidated financial statements.
The following is a list of corporations controlled by
Jefferson-Pilot Corporation:
<PAGE>
Percent of
Voting Securities
State of Owned by Jefferson-
Name Incorporation Pilot Corporation
Jefferson-Pilot Life Insurance North Carolina 100%
Company
JP Investment Management North Carolina 100%
Company
Jefferson-Pilot Investor North Carolina 100%
Services, Inc.
Jefferson-Pilot North Carolina 100%
Communications Company
Alexander Hamilton Life Insurance Michigan 100%
Company of America
Omitted from the list are subsidiaries of Jefferson-Pilot
Corporation and the other companies listed which, considered in the
aggregate as a single subsidiary, would not constitute a significant
subsidiary. Because none of the companies listed is a subsidiary
of Registrant, only the financial statements of Registrant are filed.
Item 26. Number of Holders of Securities
The following table indicates the number of record holders of the
Registrant's shares as of March 31, 1996:
(1) (2)
Number of Record
Title of Class Holders
Common Stock, Par Value 2,057
$1.00 per share
<PAGE>
Item 27. Indemnification
The Jefferson-Pilot Corporation, pursuant to resolution of its
Board of Directors, agrees to indemnify the officers and directors
of the Registrant and Jefferson-Pilot Investor Services, Inc.
against any liability to the extent permitted by law. That
resolution reads as follows:
1. The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative, including all appeals, by reason of the fact that he/she is or
was a director, officer, or employee of the Corporation, or is or was serving
at the request of the Corporation as a director, trustee, officer, employee,
or agent of another Corporation, partnership, joint venture, trust, or other
enterprise, or as a committee member, trustee or administrator under an
employee benefit plan (all such persons hereinafter sometimes referred to as
"employee"), against expenses (including attorneys' fees), judgments, decrees,
fines, penalties, and amounts paid in settlement actually and reasonably
incurred by such employee in connection with such action, suit or proceeding,
except that no indemnification shall be made in respect of any liability or
litigation expense which such employee may incur on account of that employee's
activities which were at the time taken, known or believed by that employee to
be clearly in conflict with the best interests of the Corporation. 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 employee knew or believed the activities
were clearly in conflict with the best interests of the Corporation.
2. Any indemnification under Section 1 (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the employee is proper in the
circumstances because the employee did not know or believe, at the time, that
the activities were clearly in conflict with the best interests of the
Corporation. Such determination shall be made (a) by a majority vote of
directors acting at a meeting at which a quorum is present, or (b) if such a
quorum is not obtainable (or even if obtainable), and a majority of directors
so direct, by independent legal counsel (compensated by the Corporation) in a
written opinion, or (c) by the affirmative vote of the holders of a majority
of the shares entitled to vote in the election of directors.
3. Expenses of each employee indemnified hereunder incurred in defending a
civil, criminal, administrative, or investigative action, suit, or
proceeding (including all appeals), or threat thereof, may be paid by the
Corporation in advance of the final disposition of such action, suit, or
proceeding as authorized by the Board of Directors, upon receipt of an
undertaking by or on behalf of the employee, to repay such amount unless it
shall ultimately be determined that the employee is entitled to be
indemnified by the Corporation.
4. The indemnification provided by this Resolution shall not be deemed
exclusive of any other rights to which those seeking indemnification may be
entitled as a matter of law, any agreement, vote of shareholders, any
insurance purchased by the Corporation, or otherwise, both as to action in
the employee's official capacity and as to action in another capacity while
holding such office, and shall continue as to an employee who has ceased to
be director, officer, or employee and shall inure to the benefit of the
heirs, executors, and administrators of such an employee.
<PAGE>
5. The Corporation may purchase and maintain insurance on behalf of an
employee who is or was a director, officer, or employee of the Corporation as
a director, trustee, officer, or employee of another corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against the employee and incurred by the employee in any such
capacity, or arising out of the employee's status as such, whether or not the
Corporation would have the power to indemnify the employee against such
liability under the provisions of this Resolution or of the North Carolina
Business Corporation Act.
The North Carolina Law applicable to indemnification of directors
and officers reads as follows:
Part 5. Indemnification
55-8-50 POLICY STATEMENT AND DEFINITIONS (a) It is the public
policy of this State to enable corporations organized under this Chapter to
attract and maintain responsible, qualified directors, officers, employees
and agents, and, to that end, to permit corporations organized under this
Chapter to allocate the risk of personal liability of directors, officers,
employees and agents through indemnification and insurance as authorized
in this Part.
(b) Definitions in this Part:
(1) "Corporation" includes any domestic or foreign predecessor
entity of a corporation in a merger or other transaction in which
the predecessor's existence ceased upon consummation of the
transaction.
(2) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation,
is or was serving at the corporation's request as a director, officer,
partner, trustee, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise. A director is considered to be serving an
employee benefit plan at the corporation's request if his duties to
the corporation also impose duties on, or otherwise involve services
by, him to the plan or to participants in or beneficiaries of the
plan. "Director" includes, unless the context requires otherwise, the
estate of personal representatives of a director.
(3) "Expenses" means expenses of every kind incurred in defending
a proceeding, including counsel fees.
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine including an excise tax assessed with respect to an
employee benefit plan, or reasonable expenses incurred with respect
to a proceeding.
(5) "Official capacity" means (i) when used with respect to a director,
the office of director in a corporation: and (ii) when used with respect
to an individual other than a director, as contemplated in G.S. 55-8-56
the office in a corporation held by the officer or the employment or
agency relationship undertaken by the employee or agent on behalf of the
corporation. "Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
employee benefit plan, or other enterprise.
<PAGE>
(6) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means by threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative,
or investigative and whether formal or informal.
55-8-51 AUTHORITY TO INDEMNIFY (a) Except as provided in
subsection (d), a corporation may indemnify an individual made a
party to a proceeding because he is or was a director against
liability incurred in the proceeding if:
(1) He conducted himself in good faith; and
(2) He reasonably believed (i) in the case of conduct in his official
capacity with the corporation, that his conduct was in its best
interests; and (ii) in all other cases, that his conduct was at least
not opposed to its best interests; and
(3) In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
(b) A director's conduct with respect to an employee benefit plan
for a purpose he reasonably believed to be in the interests of the
participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subsection (a)(2)(ii).
(c) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of no contest or its equivalent is not,
of itself, determinative that the director did not meet the
standard of conduct described in this section.
(d) A corporation may not indemnify a director under this section:
(1) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation; or
(2) In connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in his
official capacity, in which he was adjudged liable on the basis that
personal benefit was improperly received by him.
(e) Indemnification permitted under this section in connection
with a proceeding by or in the right of the corporation that is
concluded without a final adjudication on the issue of liability is
limited to reasonable expenses incurred in connection with the
proceeding.
(f) The authorization, approval or favorable recommendations by
the board of directors of a corporation of indemnification, as
permitted by this section, shall not be deemed an act or
corporate transaction in which a director has a conflict of
interest, and no such indemnification shall be void or voidable
on such ground.
<PAGE>
55-8-52 MANDATORY INDEMNIFICATION Unless limited by its
articles of incorporation, a corporation shall indemnify a
director who was wholly successful, on the merits
or otherwise, in the defense of any proceeding to which he was a
party because he is or was a director of the corporation against
reasonable expenses incurred by him in connection with the proceeding.
55-8-53 ADVANCE FOR EXPENSES Expenses incurred by a director
in defending a proceeding may be paid by the corporation in advance
of the final disposition of such proceeding as authorized by the board
of directors in the specific case or as authorized or required under any
provision in the articles of incorporation or bylaws or by any
applicable resolution or contract upon receipt of an undertaking by or
on behalf of the director to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by
the corporation against such expenses.
55-8-54 COURT-ORDERED INDEMNIFICATION Unless a
corporation's articles of incorporation provide otherwise, a director
of the corporation who is a party to a proceeding may
apply for indemnification to the court conducting the proceeding
or to another court of competent jurisdiction. On receipt of an
application, the court after giving any notice the court considers
necessary may order indemnification if it determines.
(1) The director is entitled to mandatory indemnification under
G.S. 55-8-52 in which case the court shall also order the corporation
to pay the director's reasonable expenses incurred to obtain
court-ordered indemnification, or
(2) The director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether
or not he met the standard of conduct set forth in G.S. 55-8-51 or was
adjudged liable as described in G.S. 55-8-51(d), but if he was
adjudged so liable his indemnification is limited to reasonable
expenses incurred.
55-8-55 DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION (a)
A corporation may not indemnify a director under G.S. 55-8-51
unless authorized in the specific case after a determination has been
made that indemnification of the director is permissible in the
circumstances because he has met the standard of conduct set
forth in G.S. 55-8-51.
(b) The determination shall be made:
(1) By the board of directors by majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(2) If a quorum cannot be obtained under subdivision (1), by
majority vote of a committee duly designated by the board of
directors (in which designation directors who are parties may
participate), consisting solely of two or more directors not at
the time parties to the proceeding;
<PAGE>
(3) By special legal counsel (i) selected by the board of
directors or its committee in the manner prescribed in subdivision
(1) or (2): or (ii) if a quorum of the board of directors cannot be
obtained under subdivision (1) and a committee cannot be
designated under subdivision (2), selected by majority vote of the
full board of directors (in which selection directors who are
parties may participate); or
(4) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding
may not be voted on the determination.
(c) Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible,
except that if the determination is made by special legal
counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under
subsection (b)(3) to select counsel.
55-8-56 INDEMNIFICATION OF OFFICERS, EMPLOYEES, AND AGENTS
Unless a corporation's articles of incorporation provide otherwise:
(1) An officer of the corporation is entitled to mandatory
indemnification under G.S. 55-8-52, and is entitled to apply for
court-ordered indemnification under G.S. 55-8-54, in each case to the
same extent as a director:
(2) The corporation may indemnify and advance expenses under this
Part to an officer, employee, or agent of the corporation to the
same extent as to a director; and
(3) A corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the extent,
consistent with public policy, that may be provided by
its articles of incorporation, bylaws, general or specific action
of its board of directors, or contract.
55-8-57 ADDITIONAL INDEMNIFICATION AND INSURANCE (a) In addition to and
separate and apart from the indemnification provided for in G.S.
55-8-51, 55-8-52, 55-8-54, 55-8-55 and 55-8-56, a corporation may in
its articles of incorporation or bylaws or by contract or resolution
indemnify or agree to indemnify any one or more of its "directors,
officers, employees, or agents against liability and expenses in any
proceeding (including without limitation a proceeding brought by or on
behalf of the corporation itself) arising out of their status as such
or their activities in any of the foregoing capacities; provided,
however, that a corporation may not indemnify or agree to indemnify a
person against liability or expenses he may incur on account of his
activities which were at the time taken known or believed by him to be
clearly in conflict with the best interests of the corporation. A
corporation may likewise and to the same extent indemnify or agree to
indemnify any person who, at the request of the corporation, is or was
serving as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture,
<PAGE>
trust or other enterprise or as a trustee or administrator under an
employee benefit plan. Any provision in any articles of incorporation,
bylaw, contract, or resolution permitted under this section may include
provisions for recovery from the corporation of reasonable costs,
expenses, and attorneys' fees in connection with the enforcement of
rights to indemnification granted therein and may further include
provisions establishing reasonable procedures for determining and
enforcing the rights granted therein.
(b) The authorization, adoption, approval, or favorable recommendation
by the board of directors of a public corporation of any provision in
any articles of incorporation, bylaw, contract or resolution, as
permitted in this section, shall not be deemed an act or corporate
transaction in which a director has a conflict of interest, and no such
articles of incorporation or bylaw provision or contract or resolution
shall be void or voidable on such grounds. The authorization, adoption,
approval, or favorable recommendation by the board of directors of a
nonpublic corporation of any provision in any articles of incorporation,
bylaw, contract or resolution, as permitted in this section, which
occurred prior to July 1, 1990, shall not be deemed an act or corporate
transaction in which a director has a conflict of interest, and no such
articles of incorporation, bylaw provision, contract or resolution shall
be void or voidable on such grounds. Except as permitted in G.S.
55-8-31, no such bylaw, contract, or resolution not adopted, authorized,
approved or ratified by shareholders shall be effective as to claims
made or liabilities asserted against any director prior to its adoption,
authorization, or approval by the board of directors.
(c) A corporation may purchase and maintain insurance on behalf of an
individual who is or was a director, officer, employee, or agent of the
corporation, or who, while a director, officer, employee, or agent of the
corporation, is or was serving at the request of the corporation as a
director, officer, partner , trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture, trust, employee benefit
plan, or other enterprise, against liability asserted against or incurred by
him in that capacity or arising from his status as a director, officer,
employee, or agent, whether or not the corporation would have the power to
indemnify him against the same liability under any provision of this act.
(Last amended by Ch. 1024.L.'89. eff. 7-1-90.)
55-8-58 APPLICATION OF PART (a) If articles of
incorporation limit indemnification or advance for expenses,
indemnification and advance for expenses are valid only to the extent
consistent with the articles.
(b) This Part does not limit a corporation's power to pay or
reimburse expenses incurred by a director in connection with his
appearance as a witness in a proceeding at a time when he
has not been made a named defendant or respondent to the proceeding.
(c) This Part shall not affect rights or liabilities arising out
of acts or omissions occurring before the effective date of this act.
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
Connections of officers and directors of the investment adviser
with the Registrant appear under "The Investment Adviser" on page B-3 of
the Statement of Additional Information making up a
portion of this Amendment. Any other business, profession,
vocation or employment of a substantial nature of each officer and
director of the investment adviser during the last two years is shown below.
Name of Director Other Business and
or Officer Nature of Connection
Emery Jay Yelton Senior Vice President-Investments,
President & Director Jefferson-Pilot Corporation and
Executive Vice President-
Investments, Jefferson-Pilot Life
Insurance Company since October
1993
John Carter Ingram Senior Vice President,
Senior Vice President, Jefferson-Pilot Life Insurance
Treasurer & Director Company
Kenneth Charles Mlekush Senior Vice President,
Jefferson-Pilot Corporation and
Executive Vice President-
Individual, Jefferson-Pilot
Life Insurance Company since
January 1993
Wardell Hardee Mills, Jr. Vice President, Jefferson-Pilot
Vice President Life Insurance Company since
February 1994
Jonathan Gregory Poole Associate Counsel & Assistant
Secretary Secretary, Jefferson-Pilot Life
Insurance Company since
February 1994
Peggy King Collins Manager, Securities Administration,
Assistant Treasurer Jefferson-Pilot Life Insurance
Company
Robert Emmet Whalen Second Vice President-Securities,
Assistant Treasurer Jefferson-Pilot Life Insurance
Company
JP Investment Management Company, the investment adviser, also
serves as investment adviser to Jefferson-Pilot Investment Grade Bond
Fund, Inc., JP Capital Appreciation Fund, Inc., and JP
Investment Grade Bond Fund, Inc.
<PAGE>
Item 29. Principal Underwriters
(a) Jefferson-Pilot Investor Services, Inc. also acts as principal
distributor of the shares of Jefferson-Pilot Investment Grade Bond Fund, Inc.
(b) (1) (2) (3)
Positions and
Name and Principal Positions and Offices Offices with
Business Address with Underwriter Registrant
Emery Jay Yelton Director President and
100 North Greene Street Treasurer
Greensboro, North Carolina
Kenneth Charles Mlekush Director
100 North Greene Street
Greensboro, North Carolina
Jonathan Gregory Poole Secretary Secretary
100 North Greene Street
Greensboro, North Carolina
Dennis Joseph Swanick Treasurer
100 North Greene Street
Greensboro, North Carolina
Jimmy Wayne Shoffer Assistant Treasurer
100 North Greene Street
Greensboro, North Carolina
(c) Inapplicable.
Item 30. Location of Accounts and Records
Except as hereafter noted, all accounts and records required by
Section 31(a) of the 1940 Act and the Rules promulgated
thereunder are maintained by Investors Fiduciary Trust Company,
127 West 10th Street, Kansas City, Missouri 64105. The accounts
and records required by the following sections of Rule 31a-1 are
maintained by JP Investment Management Company, 100 North Greene
Street, Greensboro, North Carolina: (b) (2) (C); (b) (5); (b)
(6); (b) (9); (b) (10); and (b) (11). The documents required by
Rule 31a-1(b) (4) are maintained by the Registrant at 100 North
Greene Street, Greensboro, North Carolina.
Item 31. Management Services
None.
Item 32. Undertakings
Not Applicable.
<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 the requirements for effectiveness of this Amendment to
Registration Statement pursuant to Rule 485(b) under the Securities Act
of 1933 and has duly caused this Amendment to its Registration Statement
to be signed on its behalf by the undersigned thereunto duly authorized,
in the City of Greensboro and State of North Carolina on the 30th day of
April, 1996.
JEFFERSON-PILOT CAPITAL APPRECIATION FUND, INC.
By: /s/ E.J. Yelton
Director, President and Treasurer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signature Title Date
Director, President and
Treasurer (Chief Executive
Officer, Principal Accounting
/s/ E. J. Yelton Officer and Principal April 30, 1996
Financial Officer)
/s/ John C. Ingram Director April 30, 1996
/s/ J. Lee Lloyd Director April 30, 1996
/s/ Richard W. McEnally Director April 30, 1996
/s/ William E. Moran Director April 30, 1996
/s/ J. Gregory Poole Secretary April 30, 1996
<PAGE>
EXHIBIT INDEX
11 Consent of Certified Public Accountants
27 Financial Data Schedule
<PAGE>
EXHIBIT 11
CONSENT OF CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use of our report dated January 11, 1996 on the
financial statement of Jefferson-Pilot Capital Appreciation Fund, Inc.
referred to therein in this Registration Statement and to the reference
to our firm in the Statement of Additional Information under the caption
"General Information."
/s/ McGladrey & Pullen LLP
McGladrey & Pullen, LLP
Certified Public Accountants
New York, New York
April 30, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE ANNUAL REPORT OF THE JEFFERSON-PILOT CAPITAL APPRECIATION
FUND, INC., DATED AS OF DECEMBER 31, 1995, AND FROM FORM N-SAR FOR
THE PERIOD ENDED DECEMBER 31, 1995, AND IS QUALIFIED IN ITS
ETIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 29,447,919
<INVESTMENTS-AT-VALUE> 37,808,342
<RECEIVABLES> 58,025
<ASSETS-OTHER> 364,199
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 38,230,566
<PAYABLE-FOR-SECURITIES> 258,090
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 141,396
<TOTAL-LIABILITIES> 399,486
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 28,499,042
<SHARES-COMMON-STOCK> 2,370,053
<SHARES-COMMON-PRIOR> 2,577,272
<ACCUMULATED-NII-CURRENT> 48,707
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 922,908
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 8,360,423
<NET-ASSETS> 37,831,080
<DIVIDEND-INCOME> 828,748
<INTEREST-INCOME> 53,147
<OTHER-INCOME> 0
<EXPENSES-NET> 292,276
<NET-INVESTMENT-INCOME> 589,619
<REALIZED-GAINS-CURRENT> 2,251,129
<APPREC-INCREASE-CURRENT> 7,655,872
<NET-CHANGE-FROM-OPS> 10,496,620
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 568,392
<DISTRIBUTIONS-OF-GAINS> 1,486,668
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 153,009
<NUMBER-OF-SHARES-REDEEMED> 469,652
<SHARES-REINVESTED> 109,424
<NET-CHANGE-IN-ASSETS> 5,447,931
<ACCUMULATED-NII-PRIOR> 27,480
<ACCUMULATED-GAINS-PRIOR> 158,446
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 177,665
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 35,493,686
<PER-SHARE-NAV-BEGIN> 12.56
<PER-SHARE-NII> .25
<PER-SHARE-GAIN-APPREC> 4.03
<PER-SHARE-DIVIDEND> .88
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.96
<EXPENSE-RATIO> .87
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
