May 1, 1995
Dear Fellow Shareholder:
Attached are a Notice of Meeting and Joint Proxy Statement for the 1995
Annual Meeting of Shareholders of Lindner Dividend Fund, Inc., and a Special
Meeting of Shareholders of the Lindner Fund, Inc., to be held jointly on June
22, 1995. At this meeting, we are asking shareholders of each Fund to approve
a tax-free reorganization for each Fund, which would allow each Fund to reduce
operating expenses and thereby enhance overall yield to our shareholders.
Most publicly-traded corporations are not incorporated in the state in
which their headquarters are located, but rather have their official corporate
status in a state that is conducive to their legal needs. Mutual funds are no
different. In recent years, many mutual funds have reorganized as Trusts,
usually as Massachusetts Business Trusts, to reduce operating expenses and to
have operational flexibility that is favorable to mutual funds. Lindner
Dividend Fund and Lindner Fund would like to do the same, and each Fund is
seeking your vote for approval of a new organizational structure as a series
of Lindner Investments, a Massachusetts Business Trust which currently has
four series. As explained in the accompanying Joint Proxy Statement, Lindner
Dividend Fund and Lindner Fund would each reorganize to become the Lindner
Dividend Fund and the Lindner Growth Fund series, respectively, of Lindner
Investments.
If the reorganizations of Lindner Dividend Fund and Lindner Fund are
approved, various important points would not change:
** The investment policies of each Fund would remain exactly the
same, and the value of your investment would be the same (and
would fluctuate the same) as under each Fund's current corporate
structure;
** Each Fund would still be based in St. Louis (Clayton), Missouri,
and its address and telephone number would remain the same,
allowing you to speak to us whenever you desire;
** Certain expenses are expected to go down in some years (although
this cannot be guaranteed), which will help to improve earnings
for each Fund;
** Each Fund would continue to provide its shareholders with the same
reports and updates as it does currently.
While the reorganization would eliminate the need for routine annual
meetings and save significant legal, printing, tabulation and related
expenses, shareholders would still have the right to vote on non-routine
matters such as investment policy changes, fees and other important matters.
<PAGE>
EACH REORGANIZATION REQUIRES APPROVAL BY HOLDERS OF 2/3 OF ALL
OUTSTANDING SHARES OF EACH FUND. Consequently, your vote is VERY IMPORTANT.
The Board of Directors of each Fund is asking shareholders to read the
enclosed materials and vote FOR the reorganization of their Fund. If you have
any questions, feel free to call us at (800) 995-7777.
Sincerely,
Eric E. Ryback, President
<PAGE>
LINDNER FUND, INC.
LINDNER DIVIDEND FUND, INC.
P.O. Box 11208
7711 Carondelet
St. Louis, Missouri 63105
NOTICE OF JOINT MEETING OF SHAREHOLDERS
To Be Held on June 22, 1995
To the Shareholders:
A Joint Meeting of Shareholders of Lindner Dividend Fund, Inc., a
Missouri corporation (the "Dividend Fund"), and Lindner Fund, Inc., a Missouri
corporation (the "Lindner Fund") (each referred to as a "Fund" and
collectively as the "Funds") will be held at the Holiday Inn-Clayton Plaza,
7730 Bonhomme, St. Louis (Clayton), Missouri, on Thursday, June 22, 1995, at
8:00 o'clock p.m., C.D.T., for the following purposes:
Proposal Applicable Fund
1. To elect a board of eight directors. Dividend Fund
2. To ratify the selection of Deloitte & Touche Dividend Fund
LLP, certified public accountants, as auditors of
the Dividend Fund for the fiscal year ending
February 28, 1996.
3. To approve a reorganization of each of the Dividend Fund and
Dividend Fund and the Lindner Fund to a separate Lindner Fund
series (the "Lindner Dividend Series" and the
"Lindner Growth Series") of Lindner Investments,
a Massachusetts business trust (the "Trust"), which
series will have the same investment objective and
investment policies as the predecessor Dividend
Fund and Lindner Fund.
4. To authorize the Dividend Fund and Lindner Dividend Fund and
Fund to approve Advisory and Service Contracts Lindner Fund
and Agency Agreements between the Lindner Dividend
Series and the Lindner Growth Series and Ryback
Management Corporation.
5. To transact such other business as may properly Dividend Fund and
come before the meeting. Lindner Fund
<PAGE>
Shareholders of record of each Fund at the close of business on April
30, 1995, will be entitled to notice of, and to vote at, the Meeting for that
Fund, or at any adjournment thereof. An alphabetical list of shareholders of
each Fund entitled to vote at the Meeting for that Fund will be available for
inspection by that Fund's shareholders and their agents at the Meeting and any
adjournment thereof and will also be available for such inspection at that
Fund's office during normal business hours during the ten days preceding the
Meeting.
Whether or not you expect to attend the Meeting in person, please
complete, date, sign and mail the enclosed Proxy promptly in the enclosed
postage-prepaid envelope. If you attend the Meeting, you may revoke your
Proxy and vote your shares in person if you desire to do so. Please indicate
on the enclosed Proxy whether you intend to attend the Meeting in person.
By Order of each of the Board of Directors,
Brian L. Blomquist
May 1, 1995 Secretary
PROPOSAL 3 DESCRIBED HEREIN INVOLVES A REORGANIZATION OF THE FUNDS AND
REQUIRES APPROVAL BY TWO-THIRDS OF ALL SHARES OF EACH FUND. YOUR VOTE IS
IMPORTANT. PLEASE RETURN YOUR PROXY AS SOON AS PRACTICABLE TO REDUCE THE
FUND'S EXPENSES OF A SECOND REQUEST.
PLEASE VOTE YOUR PROXY!!
<PAGE>
LINDNER FUND, INC.
LINDNER DIVIDEND FUND, INC.
P.O. Box 11208
7711 Carondelet
St. Louis, Missouri 63105
(314) 727-5305
PROXY STATEMENT
Joint Meeting of Shareholders
To be Held on June 22, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Lindner Dividend Fund, Inc., a Missouri
corporation (the "Dividend Fund") for use at the 1995 Annual Meeting of
Shareholders of the Dividend Fund, and the solicitation of proxies by the
Board of Directors of Lindner Fund, Inc., a Missouri corporation (the "Lindner
Fund")(each referred to as a "Fund" and collectively as the "Funds") for use
at a Special Meeting of Shareholders of the Lindner Fund, which meetings will
be held as a Joint Meeting (the "Meeting") of Shareholders on Thursday, June
22, 1995, and any or all adjournments thereof. The Meeting will be held at
8:00 o'clock p.m. at the Holiday Inn-Clayton Plaza, 7730 Bonhomme, St. Louis
(Clayton), Missouri 63105. The Board of Directors of each Fund will solicit
proxies by mail and, if necessary to achieve a quorum, by telephone, and each
Fund will pay its pro rata portion of the costs of solicitation. This Proxy
Statement will be mailed to shareholders beginning on or about May 1, 1995.
If the enclosed Proxy is properly executed, dated, and returned on or
before the time set for the Meeting, it will be voted in accordance with the
instructions contained thereon. Proxies returned unmarked but properly
executed and dated will be voted for the nominees of the Board of Directors in
the election of directors, with respect to the Dividend Fund, and for the
proposals enumerated in the Notice of Meeting and the Proxy for each Fund.
Shareholders may revoke their proxies at any time before they are voted by
written notice, execution of a subsequent Proxy, or attendance at the Meeting
or any adjournment(s) thereof.
Copies of the Dividend Fund's financial statements for the fiscal year
ended February 28, 1995, and the Lindner Fund's financial statements for the
fiscal year ended June 30, 1994, are included in each Fund's Annual Report to
Shareholders. Shareholders may obtain copies of such Annual Reports as well
as the most recent semi-annual report for the Lindner Fund by contacting the
Secretary of the Funds at P.O. Box 11208, 7711 Carondelet, St. Louis, Missouri
63105 (telephone 1-800-995-7777).
OUTSTANDING SHARES AND VOTING RIGHTS
There were outstanding and entitled to vote 71,034,654.382 shares of the
Dividend Fund's common stock, par value $1.00 per share, and 64,092,025.820
shares of the Lindner Fund's common stock par value $1.00 per share, as of the
close of business on April 21, 1995. Only shareholders of record at the close
of business on April 21, 1995, will be entitled to vote at the Meeting and any
adjournment thereof. Neither Fund has any other class of securities issued or
outstanding. As of April 21, 1995, no persons were
<PAGE>
<PAGE>
known by the Board of Directors of either Fund to own beneficially more than
5% of the outstanding shares of either Fund. On that date, the Dividend
Fund's directors and officers as a group beneficially owned 93,849.381 shares,
or 0.13% of the issued and outstanding shares of the Dividend Fund and the
Lindner Fund's directors and officers as a group beneficially owned
196,818.128 shares, or 0.31% of the issued and outstanding shares of the
Lindner Fund.
The Bylaws of each Fund require that a quorum, consisting of a majority
of the issued and outstanding shares participating in person or by Proxy, be
present before shareholders may conduct business. Unless a greater vote is
required by statute, the vote of a majority of a quorum may decide matters
brought before the shareholders of each Fund. Under Missouri law, on each
proposal to be presented to the Meeting, abstentions are treated as present
and entitled to vote and thus have the effect of a negative vote. A broker
non-vote (where a broker submits a proxy but does not have authority to vote a
customer's shares on one or more matters) on a proposal is considered not
entitled to vote on that proposal and thus is not counted in determining
whether an action requiring approval of a certain majority of the shares
present and entitled to vote has been approved. If a quorum is not present, a
majority of the shares represented in person or by Proxy may adjourn the
meeting, from time to time, without further notice to a date not later than 90
days after the date originally set for the Meeting.
Shareholders of each Fund are entitled to one vote per share on each
matter submitted to a vote at the meeting.
<PAGE>
(FOR SHAREHOLDERS OF THE DIVIDEND FUND ONLY)
PROPOSAL 1 - ELECTION OF DIRECTORS
Unless authority to vote is withheld, the person named in the Proxy will
vote the shares represented by a Proxy for the election of each of the persons
listed below as directors. Each person elected will serve as a director of
the Dividend Fund until the liquidation and termination of the Dividend Fund
subsequent to the Conversion, as defined below, if Proposal 3 is approved, or
until his or her successor has been duly elected and qualified. Each person
named below has agreed to serve as a director if elected. In the
unanticipated event that any person named below is unable to serve, shares
represented by a proxy may, in the discretion of the proxies named therein, be
voted for another person. A nominee whose name is preceded by an asterisk (*)
is an "interested person" of the Dividend Fund, as defined by the Investment
Company Act of 1940 (the "1940 Act"), by virtue of his stock ownership in the
Adviser. If shareholders of the Dividend Fund approve Proposal 3, discussed
below, at the Meeting, the Dividend Fund will be converted to a series of the
Trust. Of the nominees listed below, Messrs. Ryback, Valassis, Murphy,
Hartstein and Fitzgerald are currently trustees of the Trust. See "Certain
Comparative Information About each Fund and the Trust - Trustees of the Trust"
for a further description of the trustees of the Trust.
The Nominees and their ages and occupations are:
Terence P. Fitzgerald (39) Director since January 1993
Senior Counsel, The May Department Stores Company since April 1993.
Prior thereto, Mr. Fitzgerald was Senior Vice President of May Realty, Inc.,
the real estate division of The May Department Stores Company, from April 1990
to April 1993. From 1983 until April 1990, Mr. Fitzgerald was a partner (from
January 1988) and associate attorney with the law firm of Thompson & Mitchell,
St. Louis, Missouri. Mr. Fitzgerald is also a director of the Lindner Fund
and a Trustee of the Trust.
Marc P. Hartstein (41) Director since January 1993
For more than the past five years, employed by Anheuser-Busch, Inc., St.
Louis, Missouri; currently serving as Assistant to the Vice President, Field
Sales; previously served as Manager of Corporate Research Systems Information
Planning, Price Operations and Planning, and Analytic Assistant to the
Executive Vice President of Marketing. Mr. Hartstein is also the founder of
Hart Communications, Inc., a research, strategic planning, and image
development firm. Mr. Hartstein is also a director of the Lindner Fund and a
Trustee of the Trust.
Rolf Mayer (70) Director since 1972
Retired. Prior to retirement, Mr. Mayer was an Assistant Vice President,
Loan Officer, and Representative of Roosevelt Federal Savings and Loan
Association (now known as Roosevelt Bank, FSB), St. Louis, Missouri. He is
also a director of the Lindner Fund.
<PAGE>
Donald J. Murphy (52) Director since January 1993
For more than the past five years, President and Chief Executive Officer
of Murcom Financial, Ltd., a private investment firm located in Chicago,
Illinois, and formed by him in 1980. Mr. Murphy is also a director of the
Lindner Fund and a Trustee of the Trust.
*Eric E. Ryback (43) Director since January 1993
President and a director of Ryback Management Corporation, the
investment advisor to the Dividend Fund, since August 1992; for more than five
years prior to January 29, 1993 (the date when Ryback Management Corporation
became Adviser to the Funds), Vice-President of Lindner Management
Corporation, the Funds' prior adviser, manager and Vice-President of the
Dividend Fund, and co-manager and Vice-President of the Lindner Fund. Mr.
Ryback has been President and a director of the Lindner Fund since January 29,
1993, and is President and a Trustee of the Trust.
Dorothy M. Stephens (70) Director since 1986
Owner of Dorothy M. Stephens Silver Company, a dealer in sterling
flatware. She is also a director of the Lindner Fund.
Irvin Weinberg (76) Director since 1971
Retired in September 1981 as a consultant to Cherokee Candy & Tobacco
Company, St. Louis, Missouri, a distributor of candy, tobacco, and similar
products founded by Mr. Weinberg. He is also a director of the Lindner Fund.
*Doug T. Valassis (43) Director since January 1993
Chairman of the Board of Directors and Treasurer of Ryback Management
Corporation, the investment advisor to the Dividend Fund, since August 1992
and President and Chief Executive Officer of Franklin Enterprises, Inc., a
private investment firm, for more than five years. Mr. Valassis is Chairman
of the Board of the Dividend Fund and is Chairman of the Board and a director
of the Lindner Fund. Mr. Valassis also serves as a director of Warehouse
Club, Inc., a wholesaler and retailer of general merchandise and durable
products, Acceptance Insurance, Inc., a casualty insurance company, and as
Chairman and a Trustee of the Trust.
Share Ownership
The share ownership (with fractional shares omitted) of each director
and of all officers and directors as a group at April 21, 1995, is shown in
the following table. All shares are of common stock and are directly owned
except where indicated otherwise by a footnote. Amounts shown include shares
held as custodian for minor children and shares held in individual retirement
accounts having a bank custodian.
<PAGE>
Dividend Fund Lindner Fund
Amount Owned Amount Owned
Number Percent Number Percent
------ ------- ------ -------
Terence P. Fitzgerald 1,765 * 2,129 *
Marc P. Hartstein 1,081(2) * 870(2) *
Rolf Mayer 1,604(1)(2) * 13,808(1)(2) *
Donald J. Murphy 881(2) * 980(2) *
*Eric E. Ryback 9,229 * 9,924 *
Dorothy M. Stephens 10,501(2) * 9,930(2) *
*Doug T. Valassis 73,441(1) 0.10% 84,054(1) 0.13%
Irvin Weinberg 1,122(1) * 56,655(1) *
All directors and
officers as a group 93,849 0.13% 196,818 0.31%
- ------------------------
* Less than 0.10%
** Messrs. Ryback and Valassis are interested persons of the Fund by virtue of
their stock ownership interests in the Adviser.
(1) Includes shares held in trusts.
(2) Includes shares owned jointly with spouse and/or shares owned directly by
spouse or children.
Compensation
During the most recently completed fiscal year for each of the Funds,
Directors of the Dividend Fund received the following compensation:
Total
Number of
Aggregate Fund Boards Total
Compensation on which Compensation from
Name and Position(s) From Director All Funds Managed
with Dividend Fund Dividend Fund Serves by Adviser (1)
- ----------------- ------------- ---------- ------------------
Terrence P. Fitzgerald, Director $5,000 3 $10,900
Marc P. Hartstein, Director 5,000 3 11,625
Rolf Mayer, Director 5,500 2 11,000
Donald J. Murphy, Director 5,500 3 12,125
Eric E. Ryback,
Director and President -0- 3 -0-
Dorothy M. Stephens, Director 5,500 2 11,000
Doug T. Valassis,
Director and Chairman -0- 3 -0-
Irvin Weinberg, Director 5,500 2 11,000
- -------------------
(1) The Lindner family of funds is comprised of each of the Funds, the
Lindner Utility Fund, the Lindner/Ryback Small-Cap Fund, the Lindner Bulwark
Fund and the Lindner International Fund. The most recently completed fiscal
year end for the Dividend Fund is February 28, 1995 and the most recently
completed fiscal year end for each of the other funds is June 30, 1994.
<PAGE>
No officers of the Dividend Fund or any other funds managed by the
Adviser receive any renumeration from the Dividend Fund as officers or
employees of the Dividend Fund or of any such other funds.
Supplemental Information
The Board of Directors has the responsibility for establishing basic
policies for the Dividend Fund, but is not involved in day-to-day operations.
The Board has an Audit Committee but no other standing committees. During the
fiscal year ended February 28, 1995, the Board of Directors of the Dividend
Fund met five times and the Audit Committee did not meet. Directors who are
not "interested persons" (Mrs. Stephens and Messrs. Murphy, Hartstein,
Fitzgerald, Mayer and Weinberg) receive an annual retainer of $3,000, payable
quarterly in arrears, and $500 per Board meeting or committee meeting, not
held in conjunction with a Board meeting, attended, whether in person or
telephonically.
Beginning in 1985, Mr. Valassis held the position of Executive Vice
President of Sevko, Inc. ("Sevko"), of Deerfield, Illinois, a manufacturer of
plastic houseware goods and storage items. On July 10, 1990, Sevko filed for
protection from its creditors under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division. On September 30, 1991, the Bankruptcy Court
entered an order confirming the plan of reorganization proposed by Sevko, as
the debtor in possession. After the confirmation of the plan of
reorganization, Mr. Valassis, who is a shareholder of Sevko, was elected
director, Vice President, and Secretary of Sevko, positions in which he
continues to serve.
Officers of the Funds are appointed by the Board of Directors and serve
at the pleasure of the Board. The executive officers of the Funds (other than
Mr. Valassis and Mr. Ryback) and their ages are as follows:
Robert A. Lange (51), Senior Vice President of the Dividend Fund and the
Lindner Fund since 1977, Senior Vice President of Ryback Management
Corporation since January 1993 and Senior Vice President of the Trust since
June 1993.
Brian L. Blomquist (36), Administrative Vice President and Secretary of
the Dividend Fund and the Lindner Fund since 1984, Vice President-Operations,
Treasurer and Assistant Secretary of Ryback Management Corporation since
January 1993 and Administrative Vice President and Secretary of the Trust
since June 1993.
Lawrence G. Callahan (34), Vice President of the Dividend Fund and the
Lindner Fund since December 1992, Vice President of Ryback Management
Corporation since January 1993 and Vice President of the Trust since June
1993. For more than five years prior to December 1992, Mr. Callahan was
employed as a research assistant to the Dividend Fund and the Lindner Fund.
THE DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE "FOR" ALL OF THE NOMINEES FOR
DIRECTORS
<PAGE>
(FOR SHAREHOLDERS OF DIVIDEND FUND ONLY)
PROPOSAL 2 - PROPOSAL FOR RATIFICATION
OF SELECTION OF AUDITORS
The Board of Directors of the Dividend Fund, by a vote of a majority of
directors who are not interested persons, have selected Deloitte & Touche LLP,
certified public accountants, to audit the books, records, and accounts of the
Dividend Fund for the current fiscal year ending on February 28, 1996.
Deloitte & Touche LLP has no direct or indirect material financial interest in
the Dividend Fund. The Board of Directors recommends that the selection of
Deloitte & Touche LLP be ratified. No representative of the auditors is
expected to be present at the meeting and available to respond to questions.
For the fiscal year ended February 28, 1995, Deloitte & Touche LLP
rendered only regular audit services to the Dividend Fund. Regular audit
services rendered included but were not limited to the examination of the
annual financial statements and reports and consultations relating to
accounting and financial reporting. If the shareholders of the Dividend Fund
approve Proposal 3 below, Deloitte & Touche LLP, the current auditors for each
of the other series of the Trust, will audit the books, records and accounts
of the Dividend Series.
THE DIRECTORS RECOMMEND THAT THE SELECTION OF DELOITTE & TOUCHE LLP BE
RATIFIED
PROPOSAL 3 - PROPOSAL TO APPROVE A REORGANIZATION OF EACH
FUND TO BECOME SEPARATE SERIES OF A MASSACHUSETTS
BUSINESS TRUST HAVING THE SAME INVESTMENT OBJECTIVES AND
INVESTMENT POLICIES AS ITS PREDECESSOR FUND
On April 6, 1995, the Directors of each Fund and the Trustees of Lindner
Investments (the "Trust") unanimously approved a proposal to reorganize the
operating structure of each Fund (the "Reorganizations"). In taking this
action, the Directors of each Fund and the Trustees of the Trust, including
all of the directors of the Funds and the Trustees of the Trust who are not
"interested persons" of any of the registered investment companies
participating in the Reorganizations, determined that it would be in the best
interests of each Fund and its shareholders, and in the best interest of the
Trust and its shareholders, to take those actions necessary to authorize the
Reorganizations, and that these actions will not result in any dilution to the
interests of existing Fund shareholders or any dilution to the interests of
any existing shareholders of the Trust. As a part of their evaluation of the
Reorganizations, the Directors reviewed the proposed Agreement and Plan of
Reorganization for each Fund, the proposed Advisory Agreements to be entered
into between the Trust and each Successor Fund and materials prepared by the
management of the Funds concerning the potential cost savings to each Fund
arising from the Reorganizations, the impact on the Adviser's costs and
expenses caused by the Reorganizations and the estimated costs of carrying out
the Reorganizations. Messrs. Mayer and Weinberg and Mrs. Stephens, in their
capacity as noninterested Directors of the Funds, retained the law firm of
Arnold & Porter to advise them in connection with their evaluation of the
proposed Reorganizations.
<PAGE>
The purposes of each Reorganization are to enable each Fund to enjoy
certain advantages afforded under Massachusetts law, to improve the efficiency
of operations of each Fund, and to obtain certain cost savings for each Fund
and its shareholders. See "Reasons for the Reorganization," below. Under
Proposal 3, if approved by the shareholders of the Dividend Fund pursuant to
its Agreement and Plan of Reorganization the Dividend Fund would be
reorganized from a Missouri corporation into a separate series of the Trust to
be designated as the "Lindner Dividend Fund". Similarly, under Proposal 3, if
approved by the shareholders of the Lindner Fund, pursuant to its Agreement
and Plan of Reorganization the Lindner Fund would be reorganized from a
Missouri corporation into a separate series of the Trust to be designated as
the "Lindner Growth Fund" (the Lindner Dividend Fund series and the Lindner
Growth Fund series are each referred to hereafter as a "Successor Fund" and
collectively as the "Successor Funds"). If the shareholders of each Fund
approve Proposal 3, then the Reorganization of each Fund to a Successor Fund
pursuant to each of the Reorganization Plans will be implemented by the end of
June 1995. If the proposal is not approved by shareholders of one of the
Funds, that Fund will continue to operate as a Missouri corporation.
Each Successor Fund will be a separate series of an open-end management
investment company having the same investment objectives and the same
investment policies and limitations as those of its predecessor Fund. Subject
to shareholder approval of Proposal 4, Ryback Management Corporation (the
"Adviser" or "Ryback Management") would provide investment advisory and
administrative services to each Successor Fund under an Advisory and Service
Contract ("New Advisory Agreement") that is identical in all material respects
to the Advisory and Service Contract currently in effect between the Adviser
and each Fund ("Current Advisory Agreement").
A copy of the Reorganization Plan for the Dividend Fund is attached as
Exhibit 1A to this Proxy Statement and a copy of the Reorganization Plan for
the Linder Fund is attached as Exhibit 1B to this Proxy Statement. The
principal differences between each Fund and the Trust are explained below
under "Certain Comparative Information About Each Fund and the Trust." See
"Information About the New Advisory Agreements" under Proposal 4 below for a
discussion of these new agreements.
Description of the Reorganization
The following description of the principal terms of each of
Reorganization is qualified in its entirety by reference to the Reorganization
Plans which are attached as Exhibits 1A and 1B to this Proxy Statement.
The Trust was formed pursuant to a Declaration of Trust dated July 19,
1993 ("Trust Instrument"). On the effective date of the Reorganization
("Effective Date"), each Fund will transfer all of its assets to the
applicable Successor Fund, a series of the Trust, in exchange for the
assumption by the applicable Successor Fund of all of that Fund's liabilities
and the issuance of that number of shares of the Successor Fund ("Successor
Fund Shares") equal to the number of outstanding shares of that Fund on such
date. Immediately thereafter, in liquidation of each Fund, each Fund will
distribute the applicable Successor Fund Shares to each Fund shareholder on
the basis of one Successor Fund Share for one outstanding Fund share ("Fund
<PAGE>
Shares"). Following the liquidating distributions, the Funds will be
terminated and, as soon as practicable thereafter, will be wound up and
dissolved. Upon completion of the Reorganization, each shareholder of each of
the Funds will be the owner of full and fractional Successor Fund Shares equal
in number and aggregate net asset value to his or her Fund Shares. Of course,
the value of a shareholder's investment will fluctuate thereafter, based on
the investment performance of each Successor Fund.
Approval of this Proposal 3 authorizes each Fund, as initial shareholder
of each of the respective new series of the Trust, after transfer to it of the
applicable Successor Fund Shares but before their distribution to Fund
shareholders, to approve the applicable New Advisory Agreement and the current
Agency Agreement between the Trust and Ryback Management.
The business and affairs of the Trust will be managed under the
direction of its existing Trustees. The Trustees of the Trust hold office
without limit in time except that: (a) any Trustee may resign; (b) any
Trustee may be removed with or without cause at any time by written instrument
signed by at least a majority of the Trustees; (c) any Trustee who requests to
be retired, or who has become physically or mentally incapacitated or is
otherwise unable to serve, may be retired by written instrument signed by a
majority of the other Trustees; and (d) any Trustee may be removed with or
without cause at any meeting of shareholders by a vote of two-thirds of the
outstanding shares of the Trust. Whenever a vacancy shall exist among the
Trustees, the remaining Trustees will appoint any person as they determine in
their sole discretion to fill that vacancy, consistent with the limitations
under the 1940 Act. Such appointment will be made by written instrument
signed by a majority of Trustees. The Trustees may appoint a new Trustee in
anticipation of a vacancy expected to occur because of retirement,
resignation, or because of an increase in the number of Trustees, provided
that such appointment shall become effective only at or after the vacancy
occurs.
If the Reorganization Plans are approved, the Effective Date of each
Reorganization is expected to be on or about June 30, 1995, unless the
Trustees of the Trust determine that it would not be in the best interests of
each Successor Fund and its shareholders to do so at that time or at all. The
obligations of each Fund and the Trust under their respective Reorganization
Plans are subject to various conditions as stated therein. Each
Reorganization Plan may be terminated or amended at any time prior to the
Reorganization by mutual agreement of the parties, notwithstanding the
approval of such Reorganization Plan by shareholders of the applicable Fund,
but no such amendment may have a material adverse effect on the interests of
the applicable Fund shareholders.
Continuation of Fund Shareholder Accounts
The transfer agent of each Successor Fund will establish an account for
each of that Successor Fund's shareholders containing the appropriate number
of Successor Fund Shares to be received by that shareholder pursuant to the
applicable Reorganization Plan. Such accounts will be identical in all
material respects to the accounts currently maintained by that Fund's transfer
agent for each of that Fund's Shareholders. Fund shareholders who participate
in the Dividend Reinvestment Plan of a Fund will automatically continue to
participate in the Dividend Reinvestment Plan of the Successor
<PAGE>
Fund. Fund shareholders who are receiving payment under a Systematic
Withdrawal Plan as to Fund Shares will retain the same rights and privileges
as to Successor Fund Shares. Similarly, any retirement plan currently
maintained by Fund shareholders will automatically continue as to Successor
Fund Shares.
Reasons for the Reorganization
After considering the matters in Proposal 3 at a meeting on April 6,
1995, the Directors of each Fund determined to seek shareholder authorization
for the actions necessary for the Reorganization. The Directors reviewed the
potential benefits associated with the proposed changes in each Fund's
operating structure. In this regard, the Directors determined that
reorganizing each Fund into a Successor Fund as a series of the Trust would
afford to each Successor Fund and its shareholders certain advantages of
Massachusetts law not available under Missouri law, and that substantial cost
savings to each Successor Fund and its shareholders can be realized if each
Fund becomes a series of another mutual fund for which the Adviser provides
advisory services.
Expense Savings. Under Missouri law, each Fund is required to hold
shareholders meetings on an annual basis. Massachusetts business trusts, on
the other hand, are not required to hold annual meetings, which could save
each Fund approximately $100,000 in expenses annually. However, meetings of
shareholders would be required in certain circumstances, such as to change
fundamental policies of a Successor Fund, to approve amended or new investment
advisory contracts and in other cases required by the 1940 Act.
As a series of the same Trust which has four other series of mutual
funds advised by the Adviser, each Successor Fund is expected to enjoy certain
savings in expenses. Each series of the Trust will be governed by the same
Trust Instrument and Bylaws, increasing the efficiency of legal and
administrative monitoring of each Successor Fund and reducing related
expenses, which may be higher when each fund has different governing
documents. In addition, certain fees relating to the registration of each
Successor Fund under the Securities Act of 1933, as amended, as well as those
fees required to increase each of the Funds authorized shares, both in terms
of fees paid to the State of Missouri as well as costs incurred to schedule
shareholder meetings to amend that Fund's Articles, will be lower if the Funds
are each a series of the Trust.
Other Benefits. The Directors also considered information concerning
redemptions in the mutual fund industry and the steps that other mutual fund
complexes have taken and are taking to develop competitive advantages in the
industry. The Directors considered that unless the Funds can attract
different classes of investors that want different services, the Funds may
suffer net redemptions and their expenses may increase, to the disadvantage of
their remaining shareholders. The Directors believe that a successful share
distribution system, capable of reaching investors, with a variety of
different investment objectives, and providing an opportunity to switch
between funds that are part of the same fund group, is important to attract
new investors. In addition, the Adviser believes that this structure, which
entails the potential for growth of assets under management by the Adviser,
may assist the Adviser in attracting and retaining talented personnel, to the
benefit of each Successor Fund.
<PAGE>
Tax Consequences of the Reorganization
Each Fund and the Trust has received an opinion from their counsel,
Dykema Gossett PLLC, that no gain or loss will be recognized for federal
income tax purposes to either Fund, the Trust, or any Fund shareholders
pursuant to sections 361, 1032(a) and 354(a)(1), respectively, of the Internal
Revenue Code of 1986 ("Code") upon: (i) the transfer of each Fund's assets in
exchange solely for the applicable Successor Fund Shares and the assumption by
the Successor Fund of the Fund's liabilities; or (ii) the distribution of
Successor Fund Shares to Fund shareholders in liquidation of the Fund. The
opinion further provides, among other things, that (a) the basis for federal
income tax purposes of the Successor Fund Shares to be received by each Fund
shareholder will be the same as that of his or her Fund Shares (Code Section
358(a)(1)); and (b) each Fund shareholder's holding period for his or her
Successor Fund Shares will include that shareholder's holding period for the
Fund Shares, so long as those Fund Shares were held as capital assets on the
date of the exchange (Code Section 1223(1)). No ruling has been requested
from the Internal Revenue Service ("IRS") concerning the foregoing, and the
IRS is not bound by the opinion of counsel.
Appraisal Rights
Appraisal rights are not available to either of the Funds' shareholders.
However, shareholders retain the right to redeem their shares at net asset
value at any time.
Certain Comparative Information About Each Fund and the Trust
The following is a summary of the principal differences between each
Fund, each of which is a Missouri corporation, and the Trust.
The Trust and each Successor Fund. The Trust was established pursuant to the
Trust Instrument under the laws of the Commonwealth of Massachusetts. The
investment objectives, policies, and limitations of each Successor Fund will
be the same as those of the applicable predecessor Fund. The fiscal year for
the Trust and for each of its series will be set by its Trustees and may be
changed in their sole discretion. Prior to the Reorganization, each Successor
Fund will have no assets or liabilities. If each Reorganization Plan is
approved, each Fund will be the sole shareholder of its Successor Fund
immediately prior to the distribution of Successor Fund Shares to Fund
shareholders, pursuant to each Reorganization Plan.
As series of a Massachusetts business trust, the Successor Funds'
operations are governed by the Trust Instrument, Bylaws, and applicable
Massachusetts law rather than by either of the Fund's Restated Articles of
Incorporation ("Articles"), Bylaws, and Missouri law. The operations of the
Trust currently are and will continue to be subject to the provisions of the
1940 Act and the rules and regulations of the Securities and Exchange
Commission ("SEC") thereunder and applicable state securities law.
Trustees of the Trust. The business and affairs of the Trust are managed by
or under the direction of its Trustees, who serve indefinite terms and who
have all powers necessary to carry out that responsibility. The Trustees may
<PAGE>
execute all instruments and take all action they deem necessary or desirable
to promote the interests of the Trust. The responsibilities, powers, and
fiduciary duties of the Trustees of the Trust are substantially the same as
those of the Directors of each of the Funds. The Trustees of the Trust are:
Eric E. Ryback, Doug T. Valassis, Donald J. Murphy, Marc P. Hartstein, Terence
P. Fitzgerald, Robert L. Byman, Peter S. Horos and Dennis P. Nash. Messrs.
Ryback, Valassis, Murphy, Hartstein and Fitzgerald are Directors of each of
the Funds, along with Rolf Mayer, Dorothy M. Stephens and Irvin Weinberg. The
Trustees of the Trust elect the officers of the Trust, all of whom are
currently officers of each of the Funds, holding the same offices with the
Trust and each of the Funds. As a result of the Reorganization Messrs. Byman,
Horos and Nash will become Trustees for each new series of the Trust and
Messrs. Mayer and Weinberg and Mrs. Stephens will cease to serve as directors
of the Funds upon their liquidation and dissolution following the
Reorganization. Information about Messrs. Byman, Horos and Nash is as
follows:
Principal Occupation Has Served As
Name and Age (Past 5 Years) Trustee Since
Robert L. Byman, 50 Partner in the law firm of Jenner & 1993
Block, Chicago, Illinois for more than
the past five years.
Peter S. Horos, 45 Investment Manager, All State Life 1993
Insurance Company, Northbrook, Illinois
for more than past five years.
Dennis P. Nash, 43 Vice President, Nellis Feed Company, 1993
Northbrook, Illinois (feed ingredient
broker) for more than past five years.
Shares of the Trust and the Funds. The Trust is currently comprised of four
separate series: Lindner Utility Fund, Lindner Bulwark Fund, Lindner/Ryback
Small-Cap Fund and Lindner International Fund. The Trust Instrument allows
for additional series, including each of the Successor Funds that will be
established prior to the Reorganization. The Trustees may designate the
relative rights and preferences of each series, and may divide the shares of
any series into classes. Shares of each series shall represent equal
proportionate interests in the assets of that series only and have identical
voting, dividend, liquidation, and other rights. The liabilities of each
series shall be borne solely by that series, and no series will be responsible
for the liabilities of another series. Each series may issue an unlimited
number of shares. All shares issued are fully paid and non-assessable, and
shareholders shall have no preemptive or other right to subscribe to any
additional shares. Upon redemption of shares of any series, a shareholder
will be paid solely out of the monies and property of that series.
Each Fund has only one class of stock, and the Restated Articles of
Incorporation for each Fund provide that all shares issued shall be fully paid
and non-assessable and that shareholders shall have no preemptive or other
right to subscribe to any additional shares. The Dividend Fund is authorized
to issue 75,000,000 shares and the Lindner Fund is authorized to issue
95,000,000 shares.
Liability of Trust Shareholders and of the Funds' Shareholders. Shareholders
may, under limited circumstances, be held personally liable for the
obligations of the Trust. However, the Trust Instrument: (i) requires that
every written obligation of the trust contain a statement that such obligation
may only be enforced against the assets of the trust (the omission of such a
disclaimer will not operate to create personal liability for any shareholder)
and (ii) provides for indemnification out of Trust property of any shareholder
held personally liable for the obligations of the Trust. Thus, the risk of a
Trust shareholder incurring financial loss beyond his investment because of
shareholder liability is limited to circumstances in which: (i) no
contractual limitation of liability was in effect; and (ii)
<PAGE>
the Trust itself would be unable to meet its obligations. In light of the
nature of the Trust's business, and the nature of its assets, management
believes that the risk of personal liability to a Trust shareholder is
extremely remote. Shareholders of the Funds may not incur liability with
respect to the Funds in excess of the amount of their investment.
Voting Rights of Trust Shareholders and of the Funds' Shareholders. The Trust
does not regularly hold annual shareholder meetings. The Trust Instrument
provides that a special meeting of shareholders of any series or class shall
be called by the Trustees upon written request of shareholders owning at least
10% of the outstanding shares of that series entitled to vote. The Bylaws of
each Fund provide that a special meeting of shareholders may be called by the
holders of not less than 20% of the outstanding shares of that Fund.
The Trust, like each Fund, is an open-end management investment company
registered with the SEC and governed by the 1940 Act. Shareholders of each
Successor Fund will, therefore, have the power to vote at special meetings
with respect to, among other things, changes in fundamental investment
policies of that Successor Fund. In addition, if at any time less than a
majority of the Trustees holding office have been elected by shareholders, the
Trustees then in office will promptly call a meeting of shareholders of the
Trust for the purpose of electing Trustees.
The Trust Instrument provides that shareholders shall have the power to
vote only with respect to the election of Trustees, the removal of Trustees,
the approval of any investment advisory or management contract, any
termination of the Trust, any amendment of the Trust Instrument itself and on
such additional matters relating to the Trust as may be required or authorized
by law, the Trust Instrument, or the By-laws, or any registration with the SEC
or any state, or as the Trustees may consider desirable. The shareholders of
each Fund have the power to vote with respect to the election of directors,
the removal of directors, the approval of termination of any investment
advisory or management agreement, any amendment to the Articles, and with
respect to any merger, consolidation, share exchange, transfer of assets, or
dissolution of the Fund.
Under the Trust Instrument, a Trustee may be removed with or without
cause by written instrument signed by a majority of the Trustees, or at any
meeting of shareholders by a vote of at least two-thirds of the outstanding
shares of the Trust. Each of the Fund's Bylaws permit removal of a director
by the affirmative vote of a majority of shareholders entitled to vote on the
matter. The Trust Instrument provides that a majority of the shares shall
constitute a quorum and the Bylaws for each Fund require a majority of shares
to establish a quorum for a meeting.
Liability of Trustees. The Trust Instrument provides that the Trustees shall
not be liable for any act or omission as Trustee, so long as they have acted
under the belief that their actions are in the best interest of the Trust, but
nothing protects a Trustee against liability to the Trust or to its
shareholders to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his or her office. Furthermore, a
<PAGE>
Trustee is entitled to indemnification against any foregoing liability and for
all reasonable expenses, under certain conditions, to be paid from the assets
of the Trust. The Trust Instrument also provides that the Trust may purchase
and maintain Trustees' and officers' liability insurance. Additionally, the
Trust may advance money for expenses, provided that the Trustee undertakes to
repay the Trust if his or her conduct is later determined to preclude
indemnification, and provided that there is not a determination by a majority
of the Trust's independent non-party Trustees, or by independent legal
counsel, that there is reason to believe that the Trustee ultimately will not
be entitled to indemnification. Finally, the Trust Instrument does not permit
an amendment which would have the effect of reducing the indemnification
protection for Trustees or shareholders.
The By-laws of each Fund provide that Directors are entitled to
indemnification out of Fund assets, subject to certain requirements, but may
not be protected against liability by reason of willful malfeasance, bad
faith, gross negligence or reckless disregard of duties. Each Fund may
advance expenses to Directors under terms similar to those in the Trust
Instrument.
Investment Policies
Each Successor Fund will have the same investment objective and the same
investment policies and limitations as those of the applicable predecessor
Fund.
Expenses
Each Fund and its Successor Fund shall be responsible for all of their
respective expenses of its Reorganization, estimated at $125,000 in the
aggregate. It is not expected that the shareholders of either Fund will incur
any direct expenses in connection with the reorganization.
Required Vote
Adoption of Proposal 3 for each Fund requires the vote of two-thirds or
more of the outstanding shares of that Fund.
THE DIRECTORS RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 3
PROPOSAL 4 - APPROVAL OF ADVISORY AND AGENCY AGREEMENTS
If Proposal 3 is approved by shareholders of the Dividend Fund or the
Lindner Fund, that Fund (or each Fund if shareholders of both approve the
Reorganization), as the sole shareholder of its respective Successor Fund will
be authorized to approve the New Advisory Agreement between the Advisor and
the Trust, on behalf of the applicable Successor Fund, in accordance with the
votes cast by the shareholders of such Fund under this Proposal 4. If the
shareholders of the Funds approve Proposal 3, the Adviser, which serves as
investment adviser to each Fund under the Current Advisory Agreements, will
serve as the investment adviser and manager of each Successor Fund pursuant to
New Advisory Agreements. The Directors believe that this will provide
continuity for each Fund and its shareholders and is in their best
<PAGE>
interests. As discussed below, the Current Advisory Agreements and the New
Advisory Agreements are identical in all material respects. A copy of the New
Advisory Agreement for the Lindner Dividend Fund is attached as Exhibit 2A to
this Proxy Statement and a copy of the New Advisory Agreement for the Lindner
Growth Fund is attached as Exhibit 2B to this Proxy Statement. Each of
Exhibits 2A and 2B is marked to show the changes from the applicable Current
Advisory Agreement.
Information About Current Advisory Agreements
Each Fund's investment portfolio is managed by Ryback Management
Corporation ("Ryback Management" or the "Adviser"), 7711 Carondelet, Suite
700, St. Louis, Missouri 63105. See "Additional Information About the Fund's
Investment Adviser" below for additional information about the Adviser. Each
Fund's relationship with the Adviser is governed by a Current Advisory
Agreement, dated January 29, 1993, that was initially approved by the Board of
Directors of each Fund, including all of the non-interested directors, on
December 1, 1992. Shareholders of each Fund initially approved their
respective Current Advisory Agreement at a Special Meeting of Shareholders
held on January 26, 1993. After its initial term of two years, and as
required by the 1940 Act continuation of each Current Advisory Agreement from
year to year must be approved by a vote of that Fund's Board of Directors or
by a vote of holders of a majority of the outstanding shares of that Fund,
and, in either case, by a majority of that Fund's directors who are not
parties to the Current Advisory Agreement and who are not interested persons
of any party to the Current Advisory Agreement, which vote must be cast in
person at a meeting called for the purpose of voting on such matter.
Continuation and Modification. As noted above, each Current Advisory
Agreement must be continued from year to year by vote of that Fund's Board of
Directors or by vote of holders of a majority of that Fund's outstanding
shares. Each Current Advisory Agreement may be modified by the mutual consent
of the Adviser and the applicable Fund, but the Fund's consent must be
authorized by vote of holders of a majority of that Fund's outstanding shares.
Additionally, the 1940 Act requires that the terms of any continuation or
modification of each Current Advisory Agreement must be approved by the vote
of a majority of the applicable Fund's Directors who are not parties to the
Current Advisory Agreement and who are not interested persons of any party to
the Current Advisory Agreement. The vote of these Directors must be cast in
person at a meeting called for the purpose of voting on the modification or
continuation. On December 29, 1994, the respective Boards of each Fund,
including a majority of the non-interested directors, voted to continue each
of the Current Advisory Contracts. Each Current Advisory Agreement is
terminable by the applicable Fund or the Adviser at any time, without penalty,
upon 60 days' written notice, and each automatically terminates if it is
assigned.
Adviser's Services. Each Current Advisory Agreement requires the Adviser to
provide the applicable Fund with investment advisory services, office space,
and personnel. Under each Current Advisory Agreement, the Adviser must pay
the salaries and fees of the applicable Fund's officers and directors who are
interested persons of that Fund and the charges for all clerical services
relating to that Fund's investments. The Adviser must also pay all
promotional expenses of the applicable Fund. Each Fund pays all other costs
<PAGE>
and expenses including interest, taxes, fees of directors who are not
interested persons of that Fund, other fees and commissions of every kind,
administrative expenses directly related to the issuance and redemption of
Shares including expenses of registering or qualifying shares for sale,
charges of custodians, transfer agents, and registrars, costs of printing and
mailing reports and notices to shareholders, auditing services and legal
services, and other expenses not expressly assumed by the Adviser.
Adviser's Fees. The Dividend Fund pays the Adviser a fee quarterly at the
annualized rate of 7/10 of 1% of the average net assets of the Dividend Fund
not in excess of $50 million, 6/10 of 1% of the Dividend Fund's average net
assets in excess of $50 million and up to $200 million and 5/10 of 1% of the
Dividend Fund's average net assets in excess of $200 million. For purposes of
computing the quarterly fee, the Dividend Fund's average net assets are
calculated by dividing the sum of the Dividend Fund's net assets at the
beginning and end of each month in the fiscal quarter by six. In addition,
the Adviser must reimburse the Dividend Fund for any excess of annual
operating and management expenses (exclusive of taxes and interest but
including the Adviser's compensation) in excess of the sum of 1.5% of the
first $30 million of the Dividend Fund's average net assets plus 1% of
average net assets in excess of $30 million in any fiscal year. For the
fiscal year ended February 28, 1995, the Adviser received total fees of
$8,309,088 from the Dividend Fund and there was no expense reimbursement.
The Lindner Fund pays the Adviser a basic fee at the annualized rate of
7/10 of 1% of the average net assets of the Lindner Fund not in excess of $50
million, 6/10 of 1% of the Lindner Fund's average net assets in excess of $50
million and up to $400 million and 5/10 of 1% of the Lindner Fund's average
net assets in excess of $400 million, subject to increase or decrease up to
2/10 of 1% per annum of such average net assets (the "performance bonus" or
"performance penalty") depending on the Lindner Fund's investment performance
compared with the investment record of the Standard & Poor's 500 Stock
Composite Index (the "Index"). Investment performance of the Lindner Fund
means the sum of (i) the change in its net asset value per Share during the
fiscal year and (ii) the value of distributions per share accumulated to the
end of the fiscal year, expressed as a percentage of the net asset value per
Share at the beginning of the fiscal year. The investment record of the Index
means the sum of (i) the change in the level of the Index during the fiscal
year plus (ii) the value, computed consistently with the Index, of cash
distributions made by companies whose securities comprise the Index
accumulated to the end of the fiscal year (and treated as reinvested in the
Index at the end of the calendar quarter following payment of the dividend),
expressed as a percentage of the Index level at the beginning of the fiscal
year.
<PAGE>
Thus, the total fee paid by the Lindner Fund to the Adviser may vary as
follows:
If the Lindner Fund's
performance exceeds The fee as a percentage
the Index by: of average net assets is:
More than 12% 0.9% on the first $50 million of average net assets,
0.8% of average net assets in excess of $50 million up
to $400 million and 0.7% of average net assets in
excess of $400 million.
6% to 12% 0.8% of the first $50 million of average net assets,
0.7% of average net assets in excess of $50 million up
to $400 million, and 0.6% of average net assets in
excess of $400 million.
If the Lindner Fund's
performance falls below The fee as a percentage
the Index by: of average net assets is:
6% to 12% 0.6% of the first $50 million of average net assets,
0.5% of average net assets in excess of $50 million up
to $400 million, and 0.4% of average net assets in
excess of $400 million.
More than 12% 0.5% of the first $50 million of average net assets,
0.4% of average net assets in excess of $50 million up
to $400 million, and 0.3% of average net assets in
excess of $400 million.
If the Lindner Fund's performance exceeds the Index by less than 6% or falls
below the Index by less than 6%, the Adviser receives the basic fee of 0.7% of
the first $50 million of average net assets, 0.6% of average net assets in
excess of $50 million up to $400 million, and 0.5% of average net assets in
excess of $400 million. In addition, the Adviser must reimburse the Lindner
Fund for any excess of annual operating and management expenses (exclusive of
taxes and interest but including the Adviser's compensation) in excess of the
sum of 1.5% of the first $30 million of the Lindner Fund's average net assets
plus 1% of average net assets in excess of $30 million in any fiscal year.
For the fiscal year ended June 30, 1994, the Adviser received a fee of
$7,778,757 from the Lindner Fund and there was no performance bonus or penalty
nor any expense reimbursement required.
Information About the New Advisory Agreements
The terms of each of the New Advisory Agreements are identical in all
material respects to those of the Current Advisory Agreements for the
applicable Fund, including the compensation payable to the Adviser under each
of the New Advisory Agreements and the provisions for expense reimbursement by
the Adviser.
<PAGE>
Additional Information About the Investment Adviser
Each Fund's investment portfolio is managed by the Adviser. The
Adviser's employees include all the former employees of Lindner Management
Corporation, including the portfolio managers responsible for each Fund's
portfolio. The Adviser's exclusive business is managing mutual funds and
individual and institutional investment portfolios and acting as a transfer
agent to mutual funds. Since January 29, 1993, the Adviser has acted as sole
investment adviser of each of the Funds.
Eric E. Ryback, 7711 Carondelet, Suite 700, St. Louis, Missouri 63105,
is the principal executive officer and a director of the Adviser, which is his
principal occupation. Mr. Ryback owns 10% and three Valassis Irrevocable
Trusts (the "Trusts") each currently own 30% of the outstanding voting stock
of the Adviser. Mr. Ryback may acquire up to an additional 25% of the issued
and outstanding voting stock of the Adviser if the Adviser meets certain
performance criteria. The Trusts are investment entities formed for the
benefit of members of the Valassis family. Doug T. Valassis, a director and
Chairman of the Board of the Fund and the Adviser, is a Co-Trustee of each of
the Trusts. The other co-Trustees of the Trusts are D. Craig Valassis and
Edward W. Elliott, Jr. The address of each Trust is c/o Franklin Enterprises,
Inc., 520 Lake Cook Road, Suite 380, Deerfield, Illinois, 60015, and the
addresses of the Co-Trustees are shown below. Because of each Trust's
ownership of the Adviser, each Trust and the Co-Trustees of each Trust may be
deemed to be "parents" of the Adviser. The names, addresses and principal
occupations of the other directors of the Adviser (in addition to Messrs.
Ryback and Valassis) are D. Craig Valassis, 1400 North Woodward Avenue, Suite
270, Bloomfield Hills, Michigan 48304, Executive Vice President of Franklin
Enterprises, Inc., a private investment firm; Robert Miller, 1400 North
Woodward Avenue, Suite 270, Bloomfield Hills, Michigan 48304, Vice President
and Controller of Franklin Enterprises, Inc.; and Edward W. Elliott, Jr., 520
Lake Cook Road, Suite 380, Deerfield, Illinois 60015, Vice Chairman and Chief
Financial Officer of Franklin Enterprises, Inc.
As of April 21, 1995, the beneficial holders of voting stock of the
Adviser as a group owned 84,748 shares, or 0.12%, of the Dividend Fund's
outstanding shares and 96,344 shares, or 0.15%, of the Lindner Fund's
outstanding shares.
The following table sets forth the other funds for which the Advisor
serves as investment advisor, all of which are separate series of the Trust,
the size of each fund and the rate of adviser's compensation:
<PAGE>
Net Assets Current Annual
Fund At April 21, 1995 Advisory Fee
Lindner Utility Fund $19,249,038 ) 0.7% of assets up to
) $50,000,000;
Lindner/Ryback $ 8,151,223 for ) 0.6% of assets over
Small-Cap Fund both ) $50,000,000 up to
funds ) $200,000,000; and
) 0.5% of assets over
) $200,000,000
Lindner Bulwark Fund $69,035,418 for )
both ) 1.0% of assets
Lindner International Fund $ 214,555 funds )
Investment decisions concerning each Fund and these other series have
been and will continue to be made independently of each other. In terms of
their basic investment objectives, some of these other series differ from
those of each Fund, while others are similar. Even where the basic investment
objectives are similar, however, the methods employed by the different funds
to achieve their investment objectives may differ. Although the investment
decisions of each Fund and these other funds are made independently of each
other, to a substantial extent they rely upon the same resources for
investment advice and recommendations. There may be occasions when a Fund and
one or more of the other funds advised by the Adviser, will be
contemporaneously engaged in purchasing or selling the same securities from or
to third parties. When this occurs, the transactions will be averaged as to
price and allocated as to amounts in accordance with a formula considered to
be equitable to the funds involved. It is recognized that in some cases this
system could have a detrimental effect on the price or volume of the security
as to a Fund. In other cases, however, it is believed that the ability of
each Fund to participate in volume transactions may produce better executions
for each Fund. In any case, it is the judgment of the Directors that the
desirability of the Reorganization outweighs any disadvantages that may result
from such contemporaneous transactions. The investment results achieved by
all of the funds advised by the Adviser have varied from one another in the
past and are likely to vary in the future.
Information About The Funds' Agency Agreements
Each Fund's Agency Agreement with Ryback Management ("Agency Agreement")
became effective on January 29, 1993. Under each Agency Agreement, Ryback
Management acts as the stock transfer agent, registrar, and dividend
disbursing agent for the Fund. Each Agency Agreement was initially approved
by a majority of the Fund's directors and a majority of the Fund's
non-interested directors on December 1, 1992, and was amended pursuant to the
approval of the Fund's directors and a majority of the Fund's non-interested
directors on August 18, 1994. Each of the Fund's non-interested directors
unanimously found that (1) the Agency Agreement was in the best interests of
the Fund and its shareholders, (2) the services to be performed under the
agreement were required for the operation of that Fund, (3) Ryback Management
could provide services the nature and quality of which are at least equal to
those provided by others offering the same or similar services, and (4) the
fees for the services were fair and reasonable in light of the usual and
<PAGE>
customary charges made by others for services of the same nature and quality.
On January 26, 1993, holders of a majority of the Fund's issued and
outstanding shares approved adoption of the Agency Agreement.
As each of the Fund's stock transfer and dividend disbursing agent,
among other activities, Ryback Management maintains shareholder accounts and
records, issues and redeems the Funds' stock certificates, mails the Funds'
prospectus, proxy statement and annual and semi-annual reports to the Funds'
shareholders, and also disburses dividend payments to shareholders. As
compensation for these services, Ryback Management receives a fee of $0.75 per
shareholder account per month. For Dividend Fund's fiscal year ending
February 28, 1995, the Adviser received total fees of $471,976 under its
Agency Agreement and for the Lindner Fund's fiscal year ending June 30, 1994,
the Adviser received total fees of $352,619 under its Agency Agreement.
Each Agency Agreement must be submitted to that Fund's shareholders for
approval whenever that Fund's Advisory Contract is submitted to the
shareholders for approval. The Agency Agreements may be terminated by either
party upon 60 days' notice. Each Agency Agreement also automatically
terminates if it (1) is not approved by a majority of that Fund's outstanding
voting securities upon any occasion that Fund's Advisory Contract with the
Adviser is presented to that Fund's shareholders for continuation and
approval, (2) is not approved by a majority of that Fund's directors and a
majority of that Fund's disinterested directors upon the annual renewal date
of the Agreement and thereafter on the date of that Fund's annual meeting of
shareholders, or (3) is assigned in whole or in part by Ryback Management.
In connection with the authorization of each Fund to approve each of the
New Advisory Agreements, the shareholders of each Fund will also authorize
each Fund to approve, on behalf of each Successor Fund, the Agency Agreement
between Ryback Management and the Trust (the "Trust Agency Agreement"). The
Trust Agency Agreement is identical in all material respects to each of the
Funds' Agency Agreements, including the compensation payable to Ryback
Management.
Brokerage Allocation
During their last fiscal years, neither of the Funds paid commissions to any
broker that is an affiliated person of that Fund, is an affiliated person of
such person or which has an affiliated person which is also an affiliated
person of either of the Funds or the Adviser.
Required Vote
Approval of each of the New Advisory Agreements requires the vote of the
lesser of (i) more than 50% of the beneficial interests in each Successor Fund
or (ii) 67% or more of the beneficial interests in each Successor Fund present
at the meeting of investors of that Successor Fund if the holders of at least
50% of the interests in that Successor Fund are present in person or
represented by proxy. Since each Fund will be the only investor in each
Successor Fund at the time of the Reorganization, a like vote of shareholders
of each Fund will be sufficient to approve each New Advisory Agreement.
THE DIRECTORS RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 4.
<PAGE>
OTHER BUSINESS
The Board of Directors is not aware of any other matters to be presented
at the meeting, but if any other matters should properly come before the
meeting, shares represented by a proxy will be voted by the proxies named
therein in accordance with their judgment.
If Proposal 3 is not approved by the Dividend Fund shareholders,
shareholders of the Dividend Fund who desire to propose matters for
consideration at the 1996 annual meeting must submit their proposals and any
material proposed to be included in the 1996 Proxy Statement of the Dividend
Fund in writing (registered or certified mail, return receipt requested, are
recommended), to the Fund's Secretary no later than January 15, 1996.
<PAGE>
LINDNER FUND, INC.
PROXY
The undersigned, revoking all previous proxies, hereby appoints ERIC E.
RYBACK, or such other person or persons as the Board of Directors of Lindner
Fund, Inc. (the "Fund") may designate, to be his proxy with power of
substitution, to vote at the Special Meeting of Shareholders of the Fund,
to be held on June 22, 1995, and at any adjournment thereof, on and with
respect to all shares of voting stock of the Fund registered in the name of
the undersigned or on and with respect to which the undersigned is entitled to
vote or act, upon the following matters:
PROPOSAL 3: Approve the reorganization of the Fund into a series of Lindner
Investments, which series will have the same investment objectives and
investment policies as the Fund.
[ ] For [ ] Against [ ] Abstain
PROPOSAL 4: Authorize the Fund to approve the Advisory and Service Contract
between Ryback Management Corporation and the Successor Fund and the Agency
Agreement for the Successor Fund.
[ ] For [ ] Against [ ] Abstain
In his discretion, the proxy is authorized to vote upon such other business as
may properly come before the Special Meeting or any adjournment thereof
EVERY PROPERLY SIGNED PROXY WILL BE VOTED (OR WITHHELD) IN ACCORDANCE WITH
SPECIFICATIONS MADE ABOVE, AND WILL BE VOTED FOR PROPOSALS 3 AND FOR PROPOSAL
4 IF NO INSTRUCTIONS ARE INDICATED. THIS PROXY IS SOLICITED ON BEHALF OF THE
FUND'S BOARD OF DIRECTORS. All powers may be exercised by the proxy or his
substitute voting or acting.
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE, AND RETURN PROMPTLY.
Dated: __________, 1995 -------------------------------
Signature
-------------------------------
Signature (if held jointly)
(INSTRUCTION: Signatures should correspond to the name appearing on the
shareholder records. Executors, administrators, guardians, Trustees, and
attorneys should so indicate when signing. IF STOCK IS REGISTERED IN MORE
THAN ONE NAME, EACH JOINT OWNER SHOULD SIGN.)
[ ] Check here if you presently intend to attend the meeting in person.
<PAGE>
EXHIBIT 1A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of April 6, 1995, between LINDNER DIVIDEND FUND, INC., a Missouri corporation
("Fund"), and LINDNER INVESTMENTS, a Massachusetts business trust ("Trust"),
on behalf of its Lindner Dividend Fund series ("Series").
This Agreement is intended to effect the reorganization of the Fund into
the Series. The reorganization will involve the transfer to the Series of all
the assets of the Fund solely in exchange for assumption by the Series of all
the liabilities of the Fund and issuance of shares of beneficial interest in
the Series ("Series Shares"), followed by the constructive distribution of the
Series Shares to the holders ("Fund Shareholders") of shares of stock in the
Fund ("Fund Shares") in complete liquidation and termination of the Fund, all
upon the terms and conditions herein. The foregoing transactions are referred
to herein as the "Reorganization". All agreements, representations, and
actions described herein made or to be taken by the Series are made and shall
be taken by the Trust on behalf of the Series.
In consideration of the mutual promises herein, the parties covenant and
agree as follows:
1. Plan of Reorganization.
(a) The Fund agrees to assign, sell, convey, transfer, and deliver its
assets described in Section 1(b) and its business to the Series, which was
established by the Trust solely for the purpose of acquiring the Assets and
continuing the Fund's business. The Series agrees in exchange therefor (i) to
assume all the Fund's then existing liabilities, whether contingent or
otherwise, and (ii) to deliver to the Fund the number of full and fractional
Series Shares equal to the number of full and fractional Fund Shares
outstanding at the time of Closing (as defined in Section 2(a)).
(b) The assets to be acquired by the Series (the "Assets") shall
include, without limitation, all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), claims and rights
of action, rights to register shares under applicable securities laws, books
and records, and other property owned by the Fund (including any deferred and
prepaid expenses shown as assets on the Fund's books) on the Effective Date
(as defined in Section 2(a)).
(c) Immediately after delivery to the Fund of the Series Shares and
before the distribution thereof to the Fund Shareholders, the Fund, as the
sole shareholder of the Series, shall vote to approve the Advisory and Service
Contract between the Series and Ryback Management Corporation, and the Agency
Agreement between the Trust and Ryback Management Corporation, as authorized
by the shareholders of the Fund at the Special Meeting of Shareholders of the
Fund to be held on June 22, 1995 (the "Shareholder Meeting").
<PAGE>
(d) On the Effective Date, the Fund shall constructively distribute
the Series Shares to Fund Shareholders of record determined as of the close of
business on the Effective Date, pro rata in proportion to their respective
Fund Shares, in liquidation and redemption of the Fund Shares. Such
distribution shall be accomplished by the transfer of the Series Shares then
credited to the Fund's account on the share records of the Series, to open
accounts on those records in the names of such Fund Shareholders (each
representing the respective proportionate number of Series Shares due the Fund
Shareholder in whose name the account is opened), whereupon the Fund Shares
held by such Fund Shareholders shall be canceled. Fractional Series Shares
shall be rounded to the third decimal place.
(e) Immediately after the distribution of the Series Shares as set
forth in Section 1(d), the Fund shall be terminated and any further actions
shall be taken in connection therewith as required by applicable law.
(f) Any transfer taxes payable upon issuance of Series Shares in a
name other than the registered holder of the corresponding Fund Shares on the
Fund's books as of that time shall be paid by the person to whom such Series
Shares are to be distributed as a condition of such transfer.
(g) Any reporting responsibility of the Fund to a public authority is
and shall remain the Fund's responsibility up to and including the date on
which the Fund is terminated.
(h) On and after the Effective Date, each holder of a certificate
theretofore representing outstanding Fund Shares shall thereafter, for all
purposes, be deemed to hold a certificate representing an equal number of
outstanding Series Shares. The Trust may request at any time that each
shareholder of the Series holding old certificates that initially were issued
to represent Fund Shares surrender and exchange such certificates for new
certificates issued to represent Series Shares, but the failure of a
shareholder to honor such request shall not result in any forfeiture or
detriment to such shareholder, who will continue as a holder of Series Shares
regardless of whether or not he surrenders his old certificates.
2. Closing and Effective Date.
(a) The transfer of the Assets in exchange for the assumption by the
Series of the Fund's liabilities and the issuance of Series Shares, as
described above, together with related acts necessary to consummate such
transactions ("Closing"), shall occur at the principal office of the Trust on
June 28, 1995, or at such other place or date as the parties may agree in
writing ("Effective Date"). All acts taking place at the Closing shall be
deemed to take place simultaneously as of the last daily determination of the
Fund's net asset value or at such other time and/or place as the parties may
agree.
(b) The Fund shall deliver at the Closing a certificate of an
authorized officer stating that it has notified the Fund's custodian of the
Fund's conversion into the Series.
<PAGE>
(c) The transfer agent for the Fund shall deliver at the Closing a
certificate as to the conversion on its books and records of each Fund
Shareholder account to an account as a holder of Series Shares. The Series
shall issue and deliver a confirmation to the Fund evidencing the Series
Shares to be credited on the Effective Date or provide evidence satisfactory
to the Fund that such Series Shares have been credited to the Fund's account
on the books of the Series. At the Closing each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts,
or other documents as such other party or its counsel may reasonably request.
3. Representations and Warranties of the Fund. The Fund represents and
warrants as follows:
(a) The Fund is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Missouri, and a copy of its
Restated Articles of Incorporation, as amended, is on file with the Secretary
of State of Missouri;
(b) The Fund is duly registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"), and such
registration is in full force and effect;
(c) No consideration other than Series Shares will be issued in
exchange for the Fund Shares in the Reorganization;
(d) The Fund's liabilities to be assumed by the Series were incurred
by the Fund in the ordinary course of its business;
(e) The Fund qualified for treatment as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended
("Code"), for each past year since it commenced operations and will continue
to meet all the requirements for such qualification for its current taxable
year;
(f) The Fund is not under the jurisdiction of a court in a proceeding
under Title II of the United States Code or similar case within the meaning of
section 368(a)(3)(A) of the Code;
(g) Not more than 25% of the value of the Fund's total assets is
invested in the stock or securities of any one issuer, and not more than 50%
of the value thereof is invested in the stock or securities of five or fewer
issuers; and
(h) The Fund will be terminated immediately after the conversion.
4. Representations and Warranties of the Trust. The Trust represents and
warrants as follows:
(a) The Trust is a business trust duly organized, validly existing,
and in good standing under the laws of the State of Massachusetts, and its
Declaration of Trust is on file with the Office of the Secretary of State of
the Commonwealth of Massachusetts;
<PAGE>
(b) The Trust is duly registered as an open-end management investment
company under the 1940 Act and such registration will be in full force and
effect on the Effective Date;
(c) The Series is a duly established and designated series of the
Trust, established and designated by resolution of its Trustees;
(d) The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in material violation of the Trust's
Declaration of Trust or Bylaws, or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Trust is a party or by which
it is bound;
(e) No litigation or administrative proceeding or investigation before
any court or governmental body is currently pending or to its knowledge
threatened against the Trust or any of its properties or assets which, if
adversely determined, would materially and adversely affect its financial
condition or the conduct of its business. The Trust knows of no facts which
might form the basis for the institution of such proceedings, and is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions contemplated herein.
(f) The Series has not commenced operations, nor will it commence
operations until after the Closing;
(g) The Series will be a "fund" as defined in Section 851(h)(2) of the
Code and will meet all the requirements to qualify as a RIC under Subchapter M
of the Code for its current taxable year;
(h) Prior to the Effective Date, there will be no issued and
outstanding Series Shares or any other securities issued by the Series, and
Series Shares issued in connection with the transactions contemplated hereby
will be duly and validly issued and outstanding, fully paid and nonassessable;
(i) The Series has no plan or intention to issue additional Series
Shares following the Reorganization except for shares issued in the ordinary
course of its business as a series of an open-end investment company, nor does
the Series have any plan or intention to redeem or otherwise reacquire any
Series Shares issued to the Fund Shareholders pursuant to the Reorganization,
other than through redemptions arising in the ordinary course of its business;
(j) The Series will actively continue the Fund's business in the same
manner that the Fund conducted it immediately before the Reorganization,
including (but not limited to) continuation of the same investment objectives
and restrictions and the same fundamental investment policies, and
continuation of arrangements with its investment adviser, transfer agent,
custodian and other service providers that are identical in all material
respects to the arrangements currently in effect for the Fund. In addition,
the Fund has no plan or intention to sell or otherwise dispose of any of the
Assets to be acquired by the Series in the Reorganization, except for
dispositions made in the ordinary course of its business and dispositions
necessary to maintain the Series' status as a RIC under Subchapter M of the
Code;
<PAGE>
(k) There is no plan or intention for the Series to be dissolved or
merged with another corporation or business trust or "fund" thereof (within
the meaning of section 851(h)(2) of the Code) following the Reorganization;
and
(l) Immediately after the Reorganization, not more than 25% of the
value of the Series' total assets will be invested in the stock or securities
of any one issuer and not more than 50% of the value of the Series' total
assets will be invested in the stock or securities of five or fewer issuers.
5. Representations and Warranties of Both the Trust and the Fund. Each of
the Fund and the Trust represent and warrant as follows:
(a) The fair market value of the Series Shares, when received by the
Fund Shareholders, will be equal to the fair market value of their Fund Shares
constructively surrendered in exchange therefor;
(b) Its respective management (1) is unaware of any plan or intention
of Fund Shareholders to redeem or otherwise dispose of any portion of the
Series Shares to be received by those shareholders in the Reorganization, (2)
does not anticipate dispositions at the time of or soon after the
Reorganization to exceed the usual rate and frequency of redemptions of Fund
Shares as an open-end investment company, (3) expects that the percentage of
Fund Shareholder interests, if any, that will be redeemed as a result of or at
the time of the Reorganization will be de minimis and (4) does not anticipate
that there will be extraordinary sales of Series Shares immediately following
the Reorganization that would cause the percentage of new shareholders'
interests to exceed 50% of the total shareholdings in the Series;
(c) Immediately following consummation of the Reorganization, the Fund
Shareholders will own all the Series Shares and will own such shares solely by
reason of their ownership of the Fund Shares immediately prior to the
Reorganization;
(d) Although it is not expected that shareholders of the Fund will
incur any expenses in connection with the Reorganization, if such expenses
arise, each Fund Shareholder will pay his own expenses incurred in connection
with the Reorganization;
(e) Immediately following consummation of the Reorganization, the
Series will hold the same assets and be subject to the same liabilities that
the Fund held or was subject to immediately prior thereto, plus any
liabilities and expenses of the parties incurred in connection with the
Reorganization;
(f) The fair market value on a going concern basis of the Assets to be
transferred by the Fund to the Series will equal or exceed the Fund's
liabilities to be assumed by the Series plus any liabilities to which the
transferred Assets are subject; and
(g) There is no intercompany indebtedness between the Fund and the
Series that was issued or acquired, or will be settled, at a discount.
<PAGE>
6. Covenants of the Fund and the Series.
(a) The Fund covenants to call the Shareholders Meeting to consider
and act upon this Agreement and to take all other action necessary to obtain
approval of the transactions contemplated hereby.
(b) The Fund covenants that the Series Shares are not being acquired
for the purpose of making any distribution thereof, other than in accordance
with the terms of this Agreement.
(c) The Fund covenants that it will assist the Series in obtaining
such information as the Series reasonably requests concerning the beneficial
ownership of Fund Shares.
(e) For purposes of determining whether or not to apply its normal 2%
redemption fee for shares of the Series that are redeemed within 60 days of
their issuance, the Trust will allow credit to all holders of Fund Shares who
receive Series Shares in the Reorganization for the period of time during
which such persons have held their Fund Shares prior to the Effective Date.
(e) Each party will, from time to time, as and when requested by the
other party, execute and deliver or cause to be executed and delivered all
such assignments and other instruments, and will take or cause to be taken
such further action, as the other party may deem necessary or desirable in
order to vest in, and confirm to, (a) the Series, title to and possession of
all the Assets, and (b) the Fund, title to and possession of the Series
Shares, and otherwise to carry out the intent and purpose of this Agreement.
(f) The Fund will prepare a proxy statement in compliance with the
Securities Exchange Act of 1934 and the 1940 Act in connection with the
Shareholders Meeting.
(g) Subject to the provisions of this Agreement, each party will take
or cause to be taken all actions, and will do or cause to be done all things
reasonably necessary, proper, or advisable to consummate and make effective
the transactions contemplated by this Agreement.
7. Conditions Precedent. The obligations of each party to consummate the
transactions provided for herein shall be subject to (a) performance by the
other party of all the obligations to be performed by the other party
hereunder on or before the Effective Date, (b) all representations and
warranties of the other party contained in this Agreement being true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Effective Date, with the same force and effect as if made on and as of the
Effective Date, and (c) the further conditions that on or before the Effective
Date:
(a) This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by the governing board of each party and shall
have been approved by the requisite vote of Fund Shareholders in accordance
with applicable law;
<PAGE>
(b) All necessary filings shall have been made with the Securities and
Exchange Commission ("SEC") and state securities authorities, and no order or
directive shall have been received that any other or further action is
required to permit the parties to carry out the transactions contemplated
hereby;
(c) The SEC shall not have issued an unfavorable report under Section
25(b) of the 1940 Act nor instituted any proceedings seeking to enjoin
consummation of the transactions contemplated hereby under Section 25(c) of
the 1940 Act; nor shall any other action, suit, or other proceeding be pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or to obtain damages or other relief in connection with, such
transactions;
(d) The Series shall have adopted such agreements and/or plans as the
Fund may request (including investment advisory, transfer agency, custodial,
distribution, and related agreements and plans), which in each case shall be
substantively identical in form and substance to the respective agreement or
plan in effect on the Effective Date with respect to the Fund; and such
agreements and plans shall have been approved by the Trust's trustees and, to
the extent required by law, such of those trustees who are not "interested
persons" of the Trust as defined in the 1940 Act ("Independent Trustees");
(e) The Independent Trustees of the Trust shall have selected as
independent auditors for the Series the same independent auditors as have been
selected and ratified for the Fund;
(f) All consents, orders, and permits of federal, state, and local
regulatory authorities (including the SEC and state securities authorities)
deemed necessary by the Series or the Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order, or permit
would not involve a risk of a material adverse effect on the assets or
properties of the Fund or the Series, provided that either party may for
itself waive any of such conditions; and
(g) The Fund and the Trust shall have received on or before the
Effective Date an opinion of Dykema Gossett PLLC, counsel to the Fund and the
Series, substantially to the effect that for federal income tax purposes:
(i) No gain or loss will be recognized to the Fund upon the
transfer of the Assets in exchange solely for the Series Shares and the
assumption by the Series of the Fund's liabilities;
(ii) No gain or loss will be recognized to the Series on its
receipt of the Assets in exchange for the Series Shares and its
assumption of the Fund's liabilities;
(iii) The basis of the Assets in the Series' hands will be the
same as the basis of the Assets in the Fund's hands immediately before
the Reorganization;
<PAGE>
(iv) The Series' holding period for the Assets will include
holding period of the Assets in the Fund's hands immediately, before,
the Reorganization;
(v) No gain or loss will be recognized to the Fund on the
distribution of the Series Shares to the Fund Shareholders in
constructive exchange for their Fund Shares;
(vi) No gain or loss will be recognized to Fund Shareholders as a
result of the Fund's distribution of Series Shares to them in
constructive exchange for their Fund Shares;
(vii) The basis of the Series Shares received by a Fund
Shareholder will be the same as the adjusted basis of that Fund
Shareholder's Fund Shares constructively surrendered in exchange
therefor; and
(viii) The holding period of the Series Shares received by a Fund
Shareholder will include the Fund Shareholder's holding period for the
Fund Shares constructively surrendered in exchange therefor, provided
that such Fund Shares were held as capital assets on the date of the
Reorganization.
At any time before the Closing, any of the foregoing conditions may be
waived by a party if, in the judgment of its governing board, such waiver will
not have a material adverse effect on the interests of the Fund Shareholders.
8. Entire Agreement. Each party agrees that it has not made any
representation, warranty, or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties. The
representations, warranties, and covenants contained herein or in any document
delivered pursuant hereto or in connection herewith shall survive the
consummation of the transactions contemplated hereby.
9. Termination. This Agreement may be terminated by the mutual agreement
of the parties, notwithstanding approval thereof by the Fund Shareholders. In
the event of any termination, there shall be no liability for damages on the
part of either party or the members of its governing board or its officers to
the other party or the members of its governing board or its officers.
10. Amendment. This Agreement may be amended, modified, or supplemented at
any time, notwithstanding approval thereof by the Fund Shareholders, in such
manner as may be mutually agreed upon in writing by the parties; provided,
however, that following the Shareholders Meeting no such amendment shall have
a material adverse effect on the interests of the Fund Shareholders.
11. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Missouri, provided, that in the event
of any conflict between the 1940 Act and the laws of Missouri, the 1940 Act
shall govern.
<PAGE>
(b) Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, or corporation other than
the parties and their respective successors and assigns any rights or remedies
under or by reason of this Agreement.
(c) The parties recognize that the Trust is a business trust. Notice
is hereby given that this instrument is executed on behalf of the Trust's
trustees solely in their capacity as trustees, and not individually, and that
the Trust's obligations under this instrument are not binding upon or
enforceable against any of the Trust's trustees, officers, or shareholders,
but are only binding upon and enforceable against the Series' assets and
property.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized officer.
ATTEST: LINDNER INVESTMENTS
/S/ BRIAN L. BLOMQUIST By: /S/ ERIC E. RYBACK
Brian L. Blomquist Eric E. Ryback
Secretary President
ATTEST: LINDNER DIVIDEND FUND, INC.
/S/ BRIAN L. BLOMQUIST By: /S/ DOUG T. VALASSIS
Brian L. Blomquist Doug T. Valassis
Secretary Chairman
<PAGE>
EXHIBIT 1B
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of April 6, 1995, between LINDNER FUND, INC., a Missouri corporation ("Fund"),
and LINDNER INVESTMENTS, a Massachusetts business trust ("Trust"), on behalf
of its Lindner [Growth] Fund series ("Series").
This Agreement is intended to effect the reorganization of the Fund into
the Series. The reorganization will involve the transfer to the Series of all
the assets of the Fund solely in exchange for assumption by the Series of all
the liabilities of the Fund and issuance of shares of beneficial interest in
the Series ("Series Shares"), followed by the constructive distribution of the
Series Shares to the holders ("Fund Shareholders") of shares of stock in the
Fund ("Fund Shares") in complete liquidation and termination of the Fund, all
upon the terms and conditions herein. The foregoing transactions are referred
to herein as the "Reorganization". All agreements, representations, and
actions described herein made or to be taken by the Series are made and shall
be taken by the Trust on behalf of the Series.
In consideration of the mutual promises herein, the parties covenant and
agree as follows:
1. Plan of Reorganization.
(a) The Fund agrees to assign, sell, convey, transfer, and deliver its
assets described in Section 1(b) and its business to the Series, which was
established by the Trust solely for the purpose of acquiring the Assets and
continuing the Fund's business. The Series agrees in exchange therefor (i) to
assume all the Fund's then existing liabilities, whether contingent or
otherwise, and (ii) to deliver to the Fund the number of full and fractional
Series Shares equal to the number of full and fractional Fund Shares
outstanding at the time of Closing (as defined in Section 2(a)).
(b) The assets to be acquired by the Series (the "Assets") shall
include, without limitation, all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), claims and rights
of action, rights to register shares under applicable securities laws, books
and records, and other property owned by the Fund (including any deferred and
prepaid expenses shown as assets on the Fund's books) on the Effective Date
(as defined in Section 2(a)).
(c) Immediately after delivery to the Fund of the Series Shares and
before the distribution thereof to the Fund Shareholders, the Fund, as the
sole shareholder of the Series, shall vote to approve the Advisory and Service
Contract between the Series and Ryback Management Corporation, and the Agency
Agreement between the Trust and Ryback Management Corporation, as authorized
by the shareholders of the Fund at the Annual Meeting of Shareholders of the
Fund to be held on June 22, 1995 (the "Shareholder Meeting").
<PAGE>
(d) On the Effective Date, the Fund shall constructively distribute
the Series Shares to Fund Shareholders of record determined as of the close of
business on the Effective Date, pro rata in proportion to their respective
Fund Shares, in liquidation and redemption of the Fund Shares. Such
distribution shall be accomplished by the transfer of the Series Shares then
credited to the Fund's account on the share records of the Series, to open
accounts on those records in the names of such Fund Shareholders (each
representing the respective proportionate number of Series Shares due the Fund
Shareholder in whose name the account is opened), whereupon the Fund Shares
held by such Fund Shareholders shall be canceled. Fractional Series Shares
shall be rounded to the third decimal place.
(e) Immediately after the distribution of the Series Shares as set
forth in Section 1(d), the Fund shall be terminated and any further actions
shall be taken in connection therewith as required by applicable law.
(f) Any transfer taxes payable upon issuance of Series Shares in a
name other than the registered holder of the corresponding Fund Shares on the
Fund's books as of that time shall be paid by the person to whom such Series
Shares are to be distributed as a condition of such transfer.
(g) Any reporting responsibility of the Fund to a public authority is
and shall remain the Fund's responsibility up to and including the date on
which the Fund is terminated.
(h) On and after the Effective Date, each holder of a certificate
theretofore representing outstanding Fund Shares shall thereafter, for all
purposes, be deemed to hold a certificate representing an equal number of
outstanding Series Shares. The Trust may request at any time that each
shareholder of the Series holding old certificates that initially were issued
to represent Fund Shares surrender and exchange such certificates for new
certificates issued to represent Series Shares, but the failure of a
shareholder to honor such request shall not result in any forfeiture or
detriment to such shareholder, who will continue as a holder of Series Shares
regardless of whether or not he surrenders his old certificates.
2. Closing and Effective Date.
(a) The transfer of the Assets in exchange for the assumption by the
Series of the Fund's liabilities and the issuance of Series Shares, as
described above, together with related acts necessary to consummate such
transactions ("Closing"), shall occur at the principal office of the Trust on
June 28, 1995, or at such other place or date as the parties may agree in
writing ("Effective Date"). All acts taking place at the Closing shall be
deemed to take place simultaneously as of the last daily determination of the
Fund's net asset value or at such other time and/or place as the parties may
agree.
(b) The Fund shall deliver at the Closing a certificate of an
authorized officer stating that it has notified the Fund's custodian of the
Fund's conversion into the Series.
<PAGE>
(c) The transfer agent for the Fund shall deliver at the Closing a
certificate as to the conversion on its books and records of each Fund
Shareholder account to an account as a holder of Series Shares. The Series
shall issue and deliver a confirmation to the Fund evidencing the Series
Shares to be credited on the Effective Date or provide evidence satisfactory
to the Fund that such Series Shares have been credited to the Fund's account
on the books of the Series. At the Closing each party shall deliver to the
other such bills of sale, checks, assignments, stock certificates, receipts,
or other documents as such other party or its counsel may reasonably request.
3. Representations and Warranties of the Fund. The Fund represents and
warrants as follows:
(a) The Fund is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Missouri, and a copy of its
Restated Articles of Incorporation, as amended, is on file with the Secretary
of State of Missouri;
(b) The Fund is duly registered as an open-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"), and such
registration is in full force and effect;
(c) No consideration other than Series Shares will be issued in
exchange for the Fund Shares in the Reorganization;
(d) The Fund's liabilities to be assumed by the Series were incurred
by the Fund in the ordinary course of its business;
(e) The Fund qualified for treatment as a regulated investment company
("RIC") under Subchapter M of the Internal Revenue Code of 1986, as amended
("Code"), for each past year since it commenced operations and will continue
to meet all the requirements for such qualification for its current taxable
year;
(f) The Fund is not under the jurisdiction of a court in a proceeding
under Title II of the United States Code or similar case within the meaning of
section 368(a)(3)(A) of the Code;
(g) Not more than 25% of the value of the Fund's total assets is
invested in the stock or securities of any one issuer, and not more than 50%
of the value thereof is invested in the stock or securities of five or fewer
issuers; and
(h) The Fund will be terminated immediately after the conversion.
4. Representations and Warranties of the Trust. The Trust represents and
warrants as follows:
(a) The Trust is a business trust duly organized, validly existing,
and in good standing under the laws of the State of Massachusetts, and its
Declaration of Trust is on file with the Office of the Secretary of State of
the Commonwealth of Massachusetts;
<PAGE>
(b) The Trust is duly registered as an open-end management investment
company under the 1940 Act and such registration will be in full force and
effect on the Effective Date;
(c) The Series is a duly established and designated series of the
Trust, established and designated by resolution of its Trustees;
(d) The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in material violation of the Trust's
Declaration of Trust or Bylaws, or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Trust is a party or by which
it is bound;
(e) No litigation or administrative proceeding or investigation before
any court or governmental body is currently pending or to its knowledge
threatened against the Trust or any of its properties or assets which, if
adversely determined, would materially and adversely affect its financial
condition or the conduct of its business. The Trust knows of no facts which
might form the basis for the institution of such proceedings, and is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions contemplated herein.
(f) The Series has not commenced operations, nor will it commence
operations until after the Closing;
(g) The Series will be a "fund" as defined in Section 851(h)(2) of the
Code and will meet all the requirements to qualify as a RIC under Subchapter M
of the Code for its current taxable year;
(h) Prior to the Effective Date, there will be no issued and
outstanding Series Shares or any other securities issued by the Series, and
Series Shares issued in connection with the transactions contemplated hereby
will be duly and validly issued and outstanding, fully paid and nonassessable;
(i) The Series has no plan or intention to issue additional Series
Shares following the Reorganization except for shares issued in the ordinary
course of its business as a series of an open-end investment company, nor does
the Series have any plan or intention to redeem or otherwise reacquire any
Series Shares issued to the Fund Shareholders pursuant to the Reorganization,
other than through redemptions arising in the ordinary course of its business;
(j) The Series will actively continue the Fund's business in the same
manner that the Fund conducted it immediately before the Reorganization,
including (but not limited to) continuation of the same investment objectives
and restrictions and the same fundamental investment policies, and
continuation of arrangements with its investment adviser, transfer agent,
custodian and other service providers that are identical in all material
respects to the arrangements currently in effect for the Fund. In addition,
the Fund has no plan or intention to sell or otherwise dispose of any of the
Assets to be acquired by the Series in the Reorganization, except for
dispositions made in the ordinary course of its business and dispositions
necessary to maintain the Series' status as a RIC under Subchapter M of the
Code;
<PAGE>
(k) There is no plan or intention for the Series to be dissolved or
merged with another corporation or business trust or "fund" thereof (within
the meaning of section 851(h)(2) of the Code) following the Reorganization;
and
(l) Immediately after the Reorganization, not more than 25% of the
value of the Series' total assets will be invested in the stock or securities
of any one issuer and not more than 50% of the value of the Series' total
assets will be invested in the stock or securities of five or fewer issuers.
5. Representations and Warranties of Both the Trust and the Fund. Each of
the Fund and the Trust represent and warrant as follows:
(a) The fair market value of the Series Shares, when received by the
Fund Shareholders, will be equal to the fair market value of their Fund Shares
constructively surrendered in exchange therefor;
(b) Its respective management (1) is unaware of any plan or intention
of Fund Shareholders to redeem or otherwise dispose of any portion of the
Series Shares to be received by those shareholders in the Reorganization, (2)
does not anticipate dispositions at the time of or soon after the
Reorganization to exceed the usual rate and frequency of redemptions of Fund
Shares as an open-end investment company, (3) expects that the percentage of
Fund Shareholder interests, if any, that will be redeemed as a result of or at
the time of the Reorganization will be de minimis and (4) does not anticipate
that there will be extraordinary sales of Series Shares immediately following
the Reorganization that would cause the percentage of new shareholders'
interests to exceed 50% of the total shareholdings in the Series;
(c) Immediately following consummation of the Reorganization, the Fund
Shareholders will own all the Series Shares and will own such shares solely by
reason of their ownership of the Fund Shares immediately prior to the
Reorganization;
(d) Although it is not expected that shareholders of the Fund will
incur any expenses in connection with the Reorganization, if such expenses
arise, each Fund Shareholder will pay his own expenses incurred in connection
with the Reorganization;
(e) Immediately following consummation of the Reorganization, the
Series will hold the same assets and be subject to the same liabilities that
the Fund held or was subject to immediately prior thereto, plus any
liabilities and expenses of the parties incurred in connection with the
Reorganization;
(f) The fair market value on a going concern basis of the Assets to be
transferred by the Fund to the Series will equal or exceed the Fund's
liabilities to be assumed by the Series plus any liabilities to which the
transferred Assets are subject; and
(g) There is no intercompany indebtedness between the Fund and the
Series that was issued or acquired, or will be settled, at a discount.
<PAGE>
6. Covenants of the Fund and the Trust.
(a) The Fund covenants to call the Shareholders Meeting to consider
and act upon this Agreement and to take all other action necessary to obtain
approval of the transactions contemplated hereby.
(b) The Fund covenants that the Series Shares are not being acquired
for the purpose of making any distribution thereof, other than in accordance
with the terms of this Agreement.
(c) The Fund covenants that it will assist the Series in obtaining
such information as the Series reasonably requests concerning the beneficial
ownership of Fund Shares.
(e) For purposes of determining whether or not to apply its normal 2%
redemption fee for shares of the Series that are redeemed within 60 days of
their issuance, the Trust will allow credit to all holders of Fund Shares who
receive Series Shares in the Reorganization for the period of time during
which such persons have held their Fund Shares prior to the Effective Date.
(e) Each party will, from time to time, as and when requested by the
other party, execute and deliver or cause to be executed and delivered all
such assignments and other instruments, and will take or cause to be taken
such further action, as the other party may deem necessary or desirable in
order to vest in, and confirm to, (a) the Series, title to and possession of
all the Assets, and (b) the Fund, title to and possession of the Series
Shares, and otherwise to carry out the intent and purpose of this Agreement.
(f) The Fund will prepare a proxy statement in compliance with the
Securities Exchange Act of 1934 and the 1940 Act in connection with the
Shareholders Meeting.
(g) Subject to the provisions of this Agreement, each party will take
or cause to be taken all actions, and will do or cause to be done all things
reasonably necessary, proper, or advisable to consummate and make effective
the transactions contemplated by this Agreement.
7. Conditions Precedent. The obligations of each party to consummate the
transactions provided for herein shall be subject to (a) performance by the
other party of all the obligations to be performed by the other party
hereunder on or before the Effective Date, (b) all representations and
warranties of the other party contained in this Agreement being true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Effective Date, with the same force and effect as if made on and as of the
Effective Date, and (c) the further conditions that on or before the Effective
Date:
(a) This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by the governing board of each party and shall
have been approved by the requisite vote of Fund Shareholders in accordance
with applicable law;
<PAGE>
(b) All necessary filings shall have been made with the Securities and
Exchange Commission ("SEC") and state securities authorities, and no order or
directive shall have been received that any other or further action is
required to permit the parties to carry out the transactions contemplated
hereby;
(c) The SEC shall not have issued an unfavorable report under Section
25(b) of the 1940 Act nor instituted any proceedings seeking to enjoin
consummation of the transactions contemplated hereby under Section 25(c) of
the 1940 Act; nor shall any other action, suit, or other proceeding be pending
before any court or governmental agency in which it is sought to restrain or
prohibit, or to obtain damages or other relief in connection with, such
transactions;
(d) The Series shall have adopted such agreements and/or plans as the
Fund may request (including investment advisory, transfer agency, custodial,
distribution, and related agreements and plans), which in each case shall be
substantively identical in form and substance to the respective agreement or
plan in effect on the Effective Date with respect to the Fund; and such
agreements and plans shall have been approved by the Trust's trustees and, to
the extent required by law, such of those trustees who are not "interested
persons" of the Trust as defined in the 1940 Act ("Independent Trustees");
(e) The Independent Trustees of the Trust shall have selected as
independent auditors for the Series the same independent auditors as have been
selected and ratified for the Fund;
(f) All consents, orders, and permits of federal, state, and local
regulatory authorities (including the SEC and state securities authorities)
deemed necessary by the Series or the Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall have been
obtained, except where failure to obtain any such consent, order, or permit
would not involve a risk of a material adverse effect on the assets or
properties of the Fund or the Series, provided that either party may for
itself waive any of such conditions; and
(g) The Fund and the Trust shall have received on or before the
Effective Date an opinion of Dykema Gossett PLLC, counsel to the Fund and the
Series, substantially to the effect that for federal income tax purposes:
(i) No gain or loss will be recognized to the Fund upon the
transfer of the Assets in exchange solely for the Series Shares and the
assumption by the Series of the Fund's liabilities;
(ii) No gain or loss will be recognized to the Series on its
receipt of the Assets in exchange for the Series Shares and its
assumption of the Fund's liabilities;
(iii) The basis of the Assets in the Series' hands will be the
same as the basis of the Assets in the Fund's hands immediately before
the Reorganization;
(iv) The Series' holding period for the Assets will include
holding period of the Assets in the Fund's hands immediately, before,
the Reorganization;
<PAGE>
(v) No gain or loss will be recognized to the Fund on the
distribution of the Series Shares to the Fund Shareholders in
constructive exchange for their Fund Shares;
(vi) No gain or loss will be recognized to Fund Shareholders as a
result of the Fund's distribution of Series Shares to them in
constructive exchange for their Fund Shares;
(vii) The basis of the Series Shares received by a Fund
Shareholder will be the same as the adjusted basis of that Fund
Shareholder's Fund Shares constructively surrendered in exchange
therefor; and
(viii) The holding period of the Series Shares received by a Fund
Shareholder will include the Fund Shareholder's holding period for the
Fund Shares constructively surrendered in exchange therefor, provided
that such Fund Shares were held as capital assets on the date of the
Reorganization.
At any time before the Closing, any of the foregoing conditions may be
waived by a party if, in the judgment of its governing board, such waiver will
not have a material adverse effect on the interests of the Fund Shareholders.
8. Entire Agreement. Each party agrees that it has not made any
representation, warranty, or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties. The
representations, warranties, and covenants contained herein or in any document
delivered pursuant hereto or in connection herewith shall survive the
consummation of the transactions contemplated hereby.
9. Termination. This Agreement may be terminated by the mutual agreement
of the parties, notwithstanding approval thereof by the Fund Shareholders. In
the event of any termination, there shall be no liability for damages on the
part of either party or the members of its governing board or its officers to
the other party or the members of its governing board or its officers.
10. Amendment. This Agreement may be amended, modified, or supplemented at
any time, notwithstanding approval thereof by the Fund Shareholders, in such
manner as may be mutually agreed upon in writing by the parties; provided,
however, that following the Shareholders Meeting no such amendment shall have
a material adverse effect on the interests of the Fund Shareholders.
11. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Missouri, provided, that in the event
of any conflict between the 1940 Act and the laws of Missouri, the 1940 Act
shall govern.
(b) Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, or corporation other than
the parties and their respective successors and assigns any rights or remedies
under or by reason of this Agreement.
<PAGE>
(c) The parties recognize that the Trust is a business trust. Notice
is hereby given that this instrument is executed on behalf of the Trust's
trustees solely in their capacity as trustees, and not individually, and that
the Trust's obligations under this instrument are not binding upon or
enforceable against any of the Trust's trustees, officers, or shareholders,
but are only binding upon and enforceable against the Series' assets and
property.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized officer.
ATTEST: LINDNER INVESTMENTS
/S/ BRIAN L. BLOMQUIST By: /S/ ERIC E. RYBACK
Brian L. Blomquist Eric E. Ryback
Secretary President
ATTEST: LINDNER FUND, INC.
/S/ BRIAN L. BLOMQUIST By: /S/ DOUG T. VALASSIS
Brian L. Blomquist Doug T. Valassis
Secretary Chairman
<PAGE>
EXHIBIT 2A Changes from the current Advisory Agreement
between Lindner Dividend Fund, Inc., and Ryback
Management Corporation are marked as follows:
Additions are IN ALL CAPITALS
Deletions are [Bracketed]
ADVISORY AND SERVICE CONTRACT
(LINDNER DIVIDEND FUND, A SERIES OF LINDNER INVESTMENTS)
This ADVISORY AND SERVICE CONTRACT [AGREEMENT] is entered into [the 29th
day of January 1993] EFFECTIVE AS OF JUNE 28, 1995, by and between Lindner
[Divident Fund, Inc. (hereinafter referred to as "the Fund")] INVESTMENTS, A
MASSACHUSETTS BUSINESS TRUST (THE "TRUST"), ON BEHALF OF ITS SERIES DESIGNATED
AS "LINDNER DIVIDEND FUND" (THE "SERIES"), and Ryback Management Corporation,
a Michigan corporation ([hereinafter referred to as]the "Adviser").
WHEREAS, THE TRUST IS REGISTERED AND OPERATES AS AN OPEN-END MANAGEMENT
INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"1940 ACT"); AND
WHEREAS, THE TRUST AND THE ADVISER HAVE PREVIOUSLY ENTERED INTO AN
ADVISORY AND SERVICE CONTRACT WHICH RESERVES TO THEM THE RIGHT TO NEGOTIATE
AND EXECUTE A SEPARATE ADVISORY AND SERVICE CONTRACT WITH RESPECT TO A
PARTICULAR SERIES OF SHARES OF THE TRUST; AND
WHEREAS, THE TRUST AND THE ADVISER DESIRE TO ENTER INTO SUCH A SEPARATE
AGREEMENT WITH RESPECT TO THE SERIES; AND
WHEREAS, THE TRUST DESIRES TO AVAIL ITSELF OF THE SERVICES, INFORMATION,
ADVICE, ASSISTANCE AND FACILITIES OF THE ADVISER AND TO HAVE THE ADVISER
PERFORM FOR IT VARIOUS INVESTMENT ADVISORY AND RESEARCH SERVICES AND OTHER
MANAGEMENT SERVICES IN CONNECTION WITH THE SERIES; AND
WHEREAS, THE ADVISER HAS BEEN ORGANIZED TO OPERATE AS AN INVESTMENT
ADVISER AND IS REGISTERED UNDER THE INVESTMENT ADVISERS ACT OF 1940, AS
AMENDED, AND DESIRES TO PROVIDE SUCH INVESTMENT ADVISORY SERVICES TO THE
TRUST;
NOW, THEREFORE, IN CONSIDERATION OF THE TERMS AND CONDITIONS HEREINAFTER
SET FORTH, IT IS AGREED AS FOLLOWS:
1. EMPLOYMENT OF THE ADVISER. THE TRUST HEREBY ENGAGES THE ADVISER
TO MANAGE THE INVESTMENT AND REINVESTMENT OF THE ASSETS OF LINDNER DIVIDEND
FUND FOR THE PERIOD AND ON THE TERMS HEREINAFTER SET FORTH. THE ADVISER
HEREBY ACCEPTS SUCH ENGAGEMENT AND AGREES DURING SUCH PERIOD TO RENDER
SERVICES AND TO ASSUME OBLIGATIONS HEREIN SET FORTH FOR THE COMPENSATION
HEREIN PROVIDED. THE ADVISER SHALL, FOR ALL PURPOSES HEREIN, BE DEEMED TO BE
AN INDEPENDENT CONTRACTOR AND SHALL, EXCEPT AS EXPRESSLY PROVIDED OR
<PAGE>
AUTHORIZED (WHETHER HEREIN OR OTHERWISE), HAVE NO AUTHORITY TO ACT FOR OR
REPRESENT THE TRUST IN ANY WAY OR OTHERWISE BE DEEMED AN AGENT OF THE TRUST.
[1]2. Duties of Adviser. IN PROVIDING THE SERVICES SET FORTH HEREIN,
the Adviser undertakes to afford to the [Fund]SERIES the advice and assistance
of the Adviser's organization in the choice of investments and to furnish for
the use of the [Fund]SERIES office space and all necessary office facilities,
equipment and personnel for servicing the investments of the [Fund]SERIES and
maintaining its organization, and to pay all promotional expenses, salaries
and fees of all officers and directors who are interested persons of the
[Fund]SERIES and for all clerical services relating to research, statistical
and investment work. The investment policies and all other actions of the
[Fund]SERIES are and shall at all times be subject to the control and
direction of its Board of [Directors]TRUSTEES. THE ADVISER MAY, AT ITS
EXPENSE, EMPLOY ONE OR MORE SUB-ADVISERS. REFERENCES HEREIN TO THE ADVISER
SHALL INCLUDE ANY SUB-ADVISER EMPLOYED BY THE ADVISER. THE ADVISER IS
AUTHORIZED TO SELECT THE BROKERS OR DEALERS THAT WILL EXECUTE THE PURCHASES
AND SALES OF SECURITIES OF THE SERIES. IN MAKING SUCH SELECTIONS, THE ADVISER
IS AUTHORIZED TO CONSIDER SUCH FACTORS AS IT DEEMS RELEVANT, INCLUDING THE
BREADTH OF THE MARKET IN THE SECURITY, THE PRICE OF THE SECURITY, THE
FINANCIAL CONDITION AND EXECUTION ABILITY OF THE BROKER OR DEALER, AND THE
REASONABLENESS OF THE COMMISSIONS BOTH FOR THE SPECIFIC TRANSACTION AND ON A
CONTINUING BASIS. THE COMMISSION PAID TO SUCH BROKER OR DEALER MAY BE HIGHER
THAN THAT WHICH MIGHT BE CHARGED BY ANOTHER BROKER OR DEALER FOR EFFECTING THE
SAME TRANSACTION IF A GOOD FAITH DETERMINATION IS MADE BY THE ADVISER THAT
SUCH COMMISSIONS ARE REASONABLE IN RELATION TO THE VALUE OF THE BROKERAGE AND
RESEARCH SERVICES PROVIDED, VIEWED IN TERMS OF EITHER THAT PARTICULAR
TRANSACTION OR THE OVERALL RESPONSIBILITIES OF THE ADVISER AS TO THE ACCOUNTS
AS TO WHICH IT EXERCISES INVESTMENT DISCRETION. IN MAKING SUCH DETERMINATION,
THE ADVISER NEED NOT PLACE OR ATTEMPT TO PLACE A SPECIFIC DOLLAR VALUE ON SUCH
SERVICES OR ON THE PORTION OF THE COMMISSION REFLECTING SUCH SERVICES.
[2]3. Permissible Interests. Subject to and in accordance with the
DECLARATION OF TRUST OF THE TRUST [Articles of Incorporation of the Fund] and
the Articles of Incorporation of the Adviser, trustees, officers, and
shareholders of the [Fund]SERIES are, or may be or become interested in the
Adviser as directors, officers or otherwise and directors, officers and
shareholders or otherwise of the Adviser are or may be or become interested in
the [Fund]SERIES as trustees, officers, shareholders or otherwise, and the
Adviser may be or become interested in the [Fund]SERIES as shareholder or
otherwise; and the effect of any such interrelationships shall be governed by
said DECLARATION OF TRUST OR Articles of Incorporation, AS THE CASE MAY BE and
the 1940 Act.
[3]4. Compensation of the Adviser. For the services and facilities to
be furnished during any fiscal quarter by the Adviser hereunder, the
[Fund]SERIES shall pay the Adviser as an advisory and service fee as soon as
practicable after the last day of such quarter, beginning with the quarter
ending September 30, 1995, an amount equal to the sum of 0.175% of the average
net assets of the [Fund]SERIES not in excess of $50,000,000
<PAGE>
and 0.150% of the average net assets of the [Fund]SERIES in excess of
$50,000,000 but not in excess of $200,000,000 and 0.125% of the average net
assets of the [Fund]SERIES in excess of $200,000,000.
The [Fund's]SERIES' average net assets shall be the sum of the net
assets at the beginning and end of each month of the quarter, divided by six.
The Adviser shall reimburse the [Fund]SERIES for any excess of annual
operating and management expenses, exclusive of taxes and interest but
including the Adviser's compensation, over 1-1/2% of the first $30,000,000 of
the [Fund's]SERIES' average net assets plus 1% of average net assets in excess
of $30,000,000 for any fiscal year.
[4]5. Compensation Upon Termination. In case of termination of the
Agreement during any quarter, the fee for the quarter shall be reduced
proportionately on the basis of the number of calendar days during which it is
in effect and the fee computed upon the average daily net asset value for the
business days during which it is so in effect.
It is understood that the [Fund]SERIES will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the [Fund]SERIES shall include, without limitation,
interest charges, taxes, fees of trustees who are not interested persons of
the [Fund]SERIES, other fees and commission of every kind, expenses of issue,
sale, repurchase, or redemption of shares, expenses of registering or
qualifying shares for sale, charges of custodians (including sums as custodian
and for keeping books and similar services to the [Fund]SERIES), transfer
agents (including the printing and mailing of reports and notices to
shareholders), registrars, auditing and legal services, and other expenses not
expressly assumed by the Adviser under paragraph 2 hereof.
[5]6. Status of Adviser. The services of the Adviser to the
[Fund]SERIES are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other activities.
[6]7. Limitation of Liability of Adviser. In the absence of (i) willful
misfeasance, bad faith, gross negligence, (ii) reckless disregard of
obligations and duties hereunder on the part of the Adviser, or (iii) a loss
resulting from a breach of a fiduciary duty with respect to the receipt of
compensation for services (in which case any award for damages shall be
limited to period and amount set forth in Section 36(b)(3) of the 1940 Act),
the Adviser shall not be subject to liability whatsoever to the [Fund]SERIES
or to any shareholder of the [Fund]SERIES for any error or judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale
of any security on behalf of the [Fund]SERIES. IT IS AGREED THAT THE ADVISER
SHALL HAVE NO RESPONSIBILITY OR LIABILITY FOR THE ACCURACY OR COMPLETENESS OF
THE TRUST'S REGISTRATION STATEMENTS UNDER THE 1940 ACT OR THE SECURITIES ACT
OF 1933, EXCEPT FOR INFORMATION SUPPLIED BY THE ADVISER FOR INCLUSION THEREIN.
<PAGE>
8. LIMITATION OF SERIES'S LIABILITY. THE ADVISER ACKNOWLEDGES THAT
IT HAS RECEIVED NOTICE OF AND ACCEPTS THE LIMITATIONS UPON THE SERIES'S
LIABILITY SET FORTH IN ITS DECLARATION OF TRUST. THE ADVISER AGREES THAT THE
SERIES'S OBLIGATIONS HEREUNDER IN ANY CASE SHALL BE LIMITED TO THE SERIES AND
ITS ASSETS AND THAT THE ADVISER SHALL NOT SEEK SATISFACTION OF ANY OBLIGATION
FROM THE SHAREHOLDERS OF A SERIES NOR FROM ANY TRUSTEE, OFFICER, EMPLOYEE OR
AGENT OF THE SERIES.
[7]9. Purchase of Securities. The Adviser agrees that neither it nor
any of its officers or directors will take a long or short position in the
securities issued by the [Fund]SERIES except that it or they may purchase from
the [Fund]SERIES, or from a principal underwriter of the [Fund]SERIES, shares
issued by the [Fund]SERIES at the offering price in effect at the moment of
such purchase.
[8. Modification; Termination. This Agreement may be modified by
mutual consent, such consent on the part of the Fund to be authorized by vote
of a majority of the outstanding voting securities of the Fund].
[Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement, without the payment of any
penalty, by action of its Board of Directors or by vote of a majority of its
outstanding voting securities. This Agreement shall terminate automatically
in the event of its assignment.]
[9. Use of Name. The Fund acknowledges that the Adviser is the
successor to Lindner Management Corporation ("Lmc"), and, as such, owns all
rights to the use of the name Lindner. Lmc granted the use of the name
Lindner to the Fund for use as part of its corporate name and the Fund adopted
the name Lindner Fund, Inc.; the Adviser reserves the right, without
compensation to the Fund, to:
a. require the Fund to change its corporate name within one
hundred twenty (120) days following termination of this contract,
or
b. grant the use of the name Lindner as part of the corporation
name to any other investment company.]
[10. Term of Agreement. Subject to prior termination as set forth in
paragraph 8 herein, this Contract shall continue in force for two (2) years
from the date hereof and indefinitely thereafter but only so long as the
continuance after such two (2) year period shall be specifically approved at
least annually by vote of the Fund's Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund. In addition, the
terms of any continuance or modification of this Agreement must have been
approved by the vote of a majority of those directors of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval.]
<PAGE>
10. FORCE MAJEURE. THE ADVISER SHALL NOT BE LIABLE FOR DELAYS OR
ERRORS OCCURRING BY REASON OF CIRCUMSTANCES BEYOND ITS CONTROL INCLUDING, BUT
NOT LIMITED TO, ACTS OF CIVIL OR MILITARY AUTHORITY, NATIONAL EMERGENCIES,
WORK STOPPAGES, FIRE, FLOOD, CATASTROPHE, ACTS OF GOD, INSURRECTION, WAR, RIOT
OR FAILURE OF COMMUNICATION OR POWER SUPPLY. IN THE EVENT OF EQUIPMENT
BREAKDOWNS BEYOND ITS CONTROL, THE ADVISER SHALL TAKE REASONABLE STEPS TO
MINIMIZE SERVICE INTERRUPTIONS BUT SHALL HAVE NO LIABILITY WITH RESPECT
THERETO.
11. RENEWAL, TERMINATION AND AMENDMENT. THIS AGREEMENT SHALL CONTINUE
IN EFFECT, UNLESS SOONER TERMINATED AS HEREINAFTER PROVIDED, FOR A PERIOD OF
TWO YEARS FROM THE DATE HEREOF, AND INDEFINITELY THEREAFTER, WITH RESPECT TO
THE SERIES, IF ITS CONTINUANCE AFTER SUCH TWO-YEAR PERIOD SHALL BE
SPECIFICALLY APPROVED AT LEAST ANNUALLY BY VOTE OF THE HOLDERS OF A MAJORITY
OF THE OUTSTANDING VOTING SECURITIES OF THE SERIES OR BY THE VOTE OF A
MAJORITY OF THE TRUST'S TRUSTEES; AND FURTHER PROVIDED THAT SUCH CONTINUANCE
IS ALSO APPROVED ANNUALLY BY THE VOTE OF A MAJORITY OF THE TRUSTEES WHO ARE
NOT PARTIES TO THIS AGREEMENT OR INTERESTED PERSONS OF THE ADVISER, CAST IN
PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON SUCH APPROVAL. EXCEPT
FOR THE FIRST TWO-YEAR PERIOD, IF SUCH APPROVAL IS NOT OBTAINED, THIS
AGREEMENT SHALL TERMINATE ON THE DATE WHICH IS 15 MONTHS FROM THE DATE OF THE
LAST SUCH APPROVAL. EITHER PARTY HERETO MAY, AT ANY TIME ON 60 DAYS' PRIOR
WRITTEN NOTICE TO THE OTHER, TERMINATE THIS AGREEMENT, WITHOUT THE PAYMENT OF
ANY PENALTY, BY ACTION BY ITS BOARD OF TRUSTEES OR BOARD OF DIRECTORS, AS THE
CASE MAY BE, OR BY THE VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING
SECURITIES. THIS AGREEMENT SHALL TERMINATE AUTOMATICALLY IN THE EVENT OF ITS
ASSIGNMENT. THIS AGREEMENT MAY BE AMENDED AT ANY TIME BY THE PARTIES HERETO,
SUBJECT TO APPROVAL BY THE TRUST'S BOARD OF TRUSTEES AND, IF REQUIRED BY
APPLICABLE SEC RULES AND REGULATIONS, A VOTE OF THE MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF ANY SERIES AFFECTED BY SUCH CHANGE.
12[1]. Severability. If any provisions of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
13[2]. Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of Missouri, provided however, that
nothing herein shall be construed as being inconsistent with the 1940 Act.
14[3]. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
15[4]. Definitions. The terms "vote of a majority of the
outstanding voting securities", "assigned" and "interested persons", when used
herein, shall have the respective meanings specified in the 1940 Act as now in
effect.
In Witness Whereof, the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date first
above written.
<PAGE>
Lindner [Dividend Fund, Inc.]
INVESTMENTS, A MASSACHUSETTS
BUSINESS TRUST, ON BEHALF OF LINDNER
DIVIDEND FUND, A SERIES OF SUCH TRUST
By: /s/ DOUG T. VALASSIS
Ryback Management Corporation, a
Michigan corporation
By: /s/ ERIC E. RYBACK
<PAGE>
<PAGE>
EXHIBIT 2B Changes from the current Advisory Agreement
between Lindner Fund, Inc., and Ryback
Management Corporation are marked as follows:
Additions are IN ALL CAPITALS
Deletions are [Bracketed]
Advisory and Service Contract
(LINDNER GROWTH FUND, A SERIES OF LINDNER INVESTMENTS)
This ADVISORY AND SERVICE CONTRACT [Agreement] is entered into [the 29th
day of January 1993] EFFECTIVE AS OF JUNE 28, 1995, by and between Lindner
[Fund, Inc. (hereinafter refered to as "The Fund")] INVESTMENTS, A
MASSACHUSETTS BUSINESS TRUST (THE "TRUST"), ON BEHALF OF ITS SERIES DESIGNATED
AS "LINDNER GROWTH FUND" (THE "SERIES"), and Ryback Management Corporation, a
Michigan corporation ([hereinafter referred to as]the "Adviser").
WHEREAS, THE TRUST IS REGISTERED AND OPERATES AS AN OPEN-END MANAGEMENT
INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE
"1940 ACT"); AND
WHEREAS, THE TRUST AND THE ADVISER HAVE PREVIOUSLY ENTERED INTO AN
ADVISORY AND SERVICE CONTRACT WHICH RESERVES TO THEM THE RIGHT TO NEGOTIATE
AND EXECUTE A SEPARATE ADVISORY AND SERVICE CONTRACT WITH RESPECT TO A
PARTICULAR SERIES OF SHARES OF THE TRUST; AND
WHEREAS, THE TRUST AND THE ADVISER DESIRE TO ENTER INTO SUCH A SEPARATE
AGREEMENT WITH RESPECT TO THE SERIES; AND
WHEREAS, THE TRUST DESIRES TO AVAIL ITSELF OF THE SERVICES, INFORMATION,
ADVICE, ASSISTANCE AND FACILITIES OF THE ADVISER AND TO HAVE THE ADVISER
PERFORM FOR IT VARIOUS INVESTMENT ADVISORY AND RESEARCH SERVICES AND OTHER
MANAGEMENT SERVICES IN CONNECTION WITH THE SERIES; AND
WHEREAS, THE ADVISER HAS BEEN ORGANIZED TO OPERATE AS AN INVESTMENT
ADVISER AND IS REGISTERED UNDER THE INVESTMENT ADVISERS ACT OF 1940, AS
AMENDED, AND DESIRES TO PROVIDE SUCH INVESTMENT ADVISORY SERVICES TO THE
TRUST;
NOW, THEREFORE, IN CONSIDERATION OF THE TERMS AND CONDITIONS HEREINAFTER
SET FORTH, IT IS AGREED AS FOLLOWS:
1. EMPLOYMENT OF THE ADVISER. THE TRUST HEREBY ENGAGES THE ADVISER
TO MANAGE THE INVESTMENT AND REINVESTMENT OF THE ASSETS OF LINDNER GROWTH FUND
FOR THE PERIOD AND ON THE TERMS HEREINAFTER SET FORTH. THE ADVISER HEREBY
ACCEPTS SUCH ENGAGEMENT AND AGREES DURING SUCH PERIOD TO RENDER SERVICES AND
TO ASSUME OBLIGATIONS HEREIN SET FORTH FOR THE COMPENSATION HEREIN PROVIDED.
THE ADVISER SHALL, FOR ALL PURPOSES HEREIN, BE DEEMED TO BE AN INDEPENDENT
CONTRACTOR AND SHALL, EXCEPT AS EXPRESSLY PROVIDED OR
<PAGE>
AUTHORIZED (WHETHER HEREIN OR OTHERWISE), HAVE NO AUTHORITY TO ACT FOR OR
REPRESENT THE TRUST IN ANY WAY OR OTHERWISE BE DEEMED AN AGENT OF THE TRUST.
12. Duties of Adviser. IN PROVIDING THE SERVICES SET FORTH HEREIN,
the Adviser undertakes to afford to the [Fund]SERIES the advice and assistance
of the Adviser's organization in the choice of investments and to furnish for
the use of the [Fund]SERIES office space and all necessary office facilities,
equipment and personnel for servicing the investments of the [Fund]SERIES and
maintaining its organization, and to pay all promotional expenses, salaries
and fees of all officers and directors who are interested persons of the
[Fund]SERIES and for all clerical services relating to research, statistical
and investment work. The investment policies and all other actions of the
[Fund]SERIES are and shall at all times be subject to the control and
direction of its Board of TRUSTEES[Directors]. THE ADVISER MAY, AT ITS
EXPENSE, EMPLOY ONE OR MORE SUB-ADVISERS. REFERENCES HEREIN TO THE ADVISER
SHALL INCLUDE ANY SUB-ADVISER EMPLOYED BY THE ADVISER. THE ADVISER IS
AUTHORIZED TO SELECT THE BROKERS OR DEALERS THAT WILL EXECUTE THE PURCHASES
AND SALES OF SECURITIES OF THE SERIES. IN MAKING SUCH SELECTIONS, THE ADVISER
IS AUTHORIZED TO CONSIDER SUCH FACTORS AS IT DEEMS RELEVANT, INCLUDING THE
BREADTH OF THE MARKET IN THE SECURITY, THE PRICE OF THE SECURITY, THE
FINANCIAL CONDITION AND EXECUTION ABILITY OF THE BROKER OR DEALER, AND THE
REASONABLENESS OF THE COMMISSIONS BOTH FOR THE SPECIFIC TRANSACTION AND ON A
CONTINUING BASIS. THE COMMISSION PAID TO SUCH BROKER OR DEALER MAY BE HIGHER
THAN THAT WHICH MIGHT BE CHARGED BY ANOTHER BROKER OR DEALER FOR EFFECTING THE
SAME TRANSACTION IF A GOOD FAITH DETERMINATION IS MADE BY THE ADVISER THAT
SUCH COMMISSIONS ARE REASONABLE IN RELATION TO THE VALUE OF THE BROKERAGE AND
RESEARCH SERVICES PROVIDED, VIEWED IN TERMS OF EITHER THAT PARTICULAR
TRANSACTION OR THE OVERALL RESPONSIBILITIES OF THE ADVISER AS TO THE ACCOUNTS
AS TO WHICH IT EXERCISES INVESTMENT DISCRETION. IN MAKING SUCH DETERMINATION,
THE ADVISER NEED NOT PLACE OR ATTEMPT TO PLACE A SPECIFIC DOLLAR VALUE ON SUCH
SERVICES OR ON THE PORTION OF THE COMMISSION REFLECTING SUCH SERVICES.
23. Permissible Interests. Subject to and in accordance with the
DECLARATION OF TRUST OF THE TRUST [Articles of Incorporation of the Fund] and
the Articles of Incorporation of the Adviser, trustees, officers, and
shareholders of the [Fund]SERIES are, or may be or become interested in the
Adviser as directors, officers or otherwise and directors, officers and
shareholders or otherwise of the Adviser are or may be or become interested in
the [Fund]SERIES as trustees, officers, shareholders or otherwise, and the
Adviser may be or become interested in the [Fund]SERIES as shareholder or
otherwise; and the effect of any such interrelationships shall be governed by
said DECLARATION OF TRUST OR Articles of Incorporation, AS THE CASE MAY BE,
and the 1940 Act.
34. Compensation of the Adviser. For the services and facilities to
be furnished by the Adviser hereunder, the [Fund]SERIES shall pay the Adviser
an annual fee computed on the basis of the [Fund's]SERIES' average net assets
and the [Fund's]SERIES' investment performance compared to the investment
record of Standard & Poor's 500 Stock Composite Index.
(a) The [Fund's]SERIES' investment performance for any fiscal year
shall mean the sum of:
<PAGE>
(1) The change in its net asset value per share during such
fiscal year; and
(2) The value of its cash and optional distributions per share
accumulated to the end of such fiscal year, expressed as a percentage of
its net assets value per share at the beginning of such fiscal year.
For this purpose, distributions by the [Fund]SERIES of realized capital
gains and of dividends paid from investment income shall be treated as
reinvested at the net asset value per share in effect at the close of
business on the ex-date for the payment of such distributions or
dividends.
(b) The investment record of the Standard & Poor's 500 Stock Composite
Index for any fiscal year shall mean the sum of:
(1) The change in the level of the index during such fiscal
year; and
(2) The value, computed consistently with the index, of cash
distributions made by companies whose securities comprise the index
accumulated at the end of such fiscal year, expressed as a percentage of
the index level at the beginning of such fiscal year. For this purpose,
cash distributions on the securities which comprise the index shall be
treated as reinvested in the index at the end of each calendar quarter
following the payment of the dividend.
(c) The [Fund's]SERIES' average net assets shall be the sum of the net
assets, exclusive of any accrued performance bonus or penalty, at the
beginning and end of each month of the fiscal year, divided by twenty-four.
Compensation for each fiscal year shall be the following percentage of
average net assets:
Basic Fee:
On the first $50 million of average net assets ... 0.7%
On the excess over $50 million to $400 million
average net assets .............................. 0.6%
On the excess over $400 million average net
assets .......................................... 0.5%
Plus or minus the following percentages of average net assets:
If the [Fund's]SERIES' investment performance for any fiscal year
exceeds the investment record of the Standard & Poor's 500 Stock
Composite Index by:
6 to 12 percentage points .............. plus 0.1%
more than 12 percentage points ......... plus 0.2%
If the [Fund's]SERIES' investment performance for any fiscal year falls
below the investment record of the Standard & Poor's 500 Stock Composite
Index by:
6 to 12 percentage points ............. minus 0.1%
more than 12 percentage points ........ minus 0.2%
<PAGE>
As soon as practicable after the last day of each fiscal quarter, the
[Fund]SERIES shall pay as an installment toward the annual fee, the lesser of:
0.1% of average net assets for the quarter, or the amount by which
0.375% of the first $30 million of average net assets for the
quarter plus 0.25% of average net assets for the quarter in excess
of $30 million exceed the [Fund's]SERIES' operating and management
expenses, exclusive of taxes, interest and the adviser's
compensation.
The excess of the annual fee over the quarterly installments or over any
payments of the advisory fee for any quarter of the current fiscal year made
heretofore shall be paid within 30 days after receipt of the accountant's
report covering the [Fund's]SERIES' operations for the fiscal year.
The Adviser shall reimburse the [Fund]SERIES for any excess of annual
operating and management expenses, exclusive of taxes and interest but
including the Adviser's compensation, over 1-1/2% of the first $30,000,000 of
the [Fund's]SERIES' average net assets plus 1% of average net assets in excess
of $30,000,000 for any fiscal year.
[4]5. Compensation Upon Termination. In case of termination of this
Agreement during any quarter, the fee for the quarter shall be reduced
proportionately on the basis of the number of calendar days during which it is
in effect and the fee computed upon the average asset value for the business
days during which it is so in effect.
It is understood that the [Fund]SERIES will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the [Fund]SERIES shall include, without limitation,
interest charges, taxes, fees of trustees who are not interested persons of
the [Fund]SERIES, other fees and commission of every kind, expenses of issue,
sale, repurchase, or redemption of shares, expenses of registering or
qualifying shares for sale, charges of custodians (including sums as custodian
and for keeping books and similar services to the [Fund]SERIES), transfer
agents (including the printing and mailing of reports and notices to
shareholders), registrars, auditing and legal services, and other expenses not
expressly assumed by the Adviser under paragraph 2 hereof.
[5]6. Status of Adviser. The services of the Adviser to the
[Fund]SERIES are not to be deemed to be exclusive, the Adviser being free to
render services to others and engage in other activities.
[6]7. Limitation of Liability of Adviser. In the absence of (i) willful
misfeasance, bad faith, gross negligence, (ii) reckless disregard of
obligations and duties hereunder on the part of the Adviser, or (iii) a loss
resulting from a breach of a fiduciary duty with respect to the receipt of
compensation for services (in which case any award for damages shall be
limited to period and amount set forth in Section 36(b)(3) of the 1940 Act),
the Adviser shall not be subject to liability whatsoever to the [Fund]SERIES
or to any shareholder of the [Fund]SERIES for any error or judgment, mistake
of law or any other act or omission in the course of, or connected with,
<PAGE>
rendering services hereunder including without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale
of any security on behalf of the [Fund]SERIES. IT IS AGREED THAT THE ADVISER
SHALL HAVE NO RESPONSIBILITY OR LIABILITY FOR THE ACCURACY OR COMPLETENESS OF
THE TRUST'S REGISTRATION STATEMENTS UNDER THE 1940 ACT OR THE SECURITIES ACT
OF 1933, EXCEPT FOR INFORMATION SUPPLIED BY THE ADVISER FOR INCLUSION THEREIN.
8. LIMITATION OF SERIES'S LIABILITY. THE ADVISER ACKNOWLEDGES THAT
IT HAS RECEIVED NOTICE OF AND ACCEPTS THE LIMITATIONS UPON THE SERIES'S
LIABILITY SET FORTH IN ITS DECLARATION OF TRUST. THE ADVISER AGREES THAT THE
SERIES'S OBLIGATIONS HEREUNDER IN ANY CASE SHALL BE LIMITED TO THE SERIES AND
ITS ASSETS AND THAT THE ADVISER SHALL NOT SEEK SATISFACTION OF ANY OBLIGATION
FROM THE SHAREHOLDERS OF A SERIES NOR FROM ANY TRUSTEE, OFFICER, EMPLOYEE OR
AGENT OF THE SERIES.
[7]9. Purchase of Securities. The Adviser agrees that neither it nor
any of its officers or directors will take a long or short position in the
securities issued by the [Fund]SERIES except that it or they may purchase from
the [Fund]SERIES, or from a principal underwriter of the [Fund]SERIES, shares
issued by the [Fund]SERIES at the offering price in effect at the moment of
such purchase.
[8. Modification; Termination. This Agreement may be modified by
mutual consent, such consent on the part of the Fund to be authorized by vote
of a majority of the outstanding voting securities of the Fund.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement, without the payment of any
penalty, by action of its Board of Directors or by vote of a majority of its
outstanding voting securities. This Agreement shall terminate automatically
in the event of its assignment].
[9. Use of Name. The Fund acknowledges that the Adviser is the
successor to Lindner Management Corporation ("Lmc"), and, as such, owns all
rights to the use of the name Lindner. Lmc granted the use of the name
Lindner to the Fund for use as part of its corporate name and the Fund adopted
the name Lindner Fund, Inc.; the Adviser reserves the right, without
compensation to the Fund, to:
a. require the Fund to change its corporate name within one
hundred twenty (120) days following termination of this contract,
or
b. grant the use of the name Lindner as part of the corporation
name to any other investment company.]
[10. Term of Agreement. Subject to prior termination as set forth in
paragraph 8 herein, this Contract shall continue in force for two (2) years
from the date hereof and indefinitely thereafter but only so long as the
continuance after such two (2) year period shall be specifically approved at
least annually by vote of the Fund's Board of Directors or by vote of a
majority of the outstanding voting securities of the Fund. In addition, the
terms of any continuance or modification of this Agreement must have been
<PAGE>
approved by the vote of a majority of those directors of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval].
10. FORCE MAJEURE. THE ADVISER SHALL NOT BE LIABLE FOR DELAYS OR
ERRORS OCCURRING BY REASON OF CIRCUMSTANCES BEYOND ITS CONTROL INCLUDING, BUT
NOT LIMITED TO, ACTS OF CIVIL OR MILITARY AUTHORITY, NATIONAL EMERGENCIES,
WORK STOPPAGES, FIRE, FLOOD, CATASTROPHE, ACTS OF GOD, INSURRECTION, WAR, RIOT
OR FAILURE OF COMMUNICATION OR POWER SUPPLY. IN THE EVENT OF EQUIPMENT
BREAKDOWNS BEYOND ITS CONTROL, THE ADVISER SHALL TAKE REASONABLE STEPS TO
MINIMIZE SERVICE INTERRUPTIONS BUT SHALL HAVE NO LIABILITY WITH RESPECT
THERETO.
11. RENEWAL, TERMINATION AND AMENDMENT. THIS AGREEMENT SHALL CONTINUE
IN EFFECT, UNLESS SOONER TERMINATED AS HEREINAFTER PROVIDED, FOR A PERIOD OF
TWO YEARS FROM THE DATE HEREOF, AND INDEFINITELY THEREAFTER, WITH RESPECT TO
THE SERIES, IF ITS CONTINUANCE AFTER SUCH TWO-YEAR PERIOD SHALL BE
SPECIFICALLY APPROVED AT LEAST ANNUALLY BY VOTE OF THE HOLDERS OF A MAJORITY
OF THE OUTSTANDING VOTING SECURITIES OF THE SERIES OR BY THE VOTE OF A
MAJORITY OF THE TRUST'S TRUSTEES; AND FURTHER PROVIDED THAT SUCH CONTINUANCE
IS ALSO APPROVED ANNUALLY BY THE VOTE OF A MAJORITY OF THE TRUSTEES WHO ARE
NOT PARTIES TO THIS AGREEMENT OR INTERESTED PERSONS OF THE ADVISER, CAST IN
PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON SUCH APPROVAL. EXCEPT
FOR THE FIRST TWO-YEAR PERIOD, IF SUCH APPROVAL IS NOT OBTAINED, THIS
AGREEMENT SHALL TERMINATE ON THE DATE WHICH IS 15 MONTHS FROM THE DATE OF THE
LAST SUCH APPROVAL. EITHER PARTY HERETO MAY, AT ANY TIME ON 60 DAYS' PRIOR
WRITTEN NOTICE TO THE OTHER, TERMINATE THIS AGREEMENT, WITHOUT THE PAYMENT OF
ANY PENALTY, BY ACTION OF ITS BOARD OF TRUSTEES OR BOARD OF DIRECTORS, AS THE
CASE MAY BE, OR BY THE VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING
SECURITIES. THIS AGREEMENT SHALL TERMINATE AUTOMATICALLY IN THE EVENT OF ITS
ASSIGNMENT. THIS AGREEMENT MAY BE AMENDED AT ANY TIME BY THE PARTIES HERETO,
SUBJECT TO APPROVAL BY THE TRUST'S BOARD OF TRUSTEES AND, IF REQUIRED BY
APPLICABLE SEC RULES AND REGULATIONS, A VOTE OF THE MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF ANY SERIES AFFECTED BY SUCH CHANGE.
12[1]. Severability. If any provisions of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
13[2]. Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of Missouri, provided however, that
nothing herein shall be construed as being inconsistent with the 1940 Act.
14[3]. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
15[4]. Definitions. The terms "vote of a majority of the
outstanding voting securities", "assigned" and "interested persons", when used
herein, shall have the respective meanings specified in the 1940 Act as now in
effect.
<PAGE>
In witness whereof, the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date first
above written.
Lindner [Fund, Inc.]INVESTMENTS, A
MASSACHUSETTS BUSINESS TRUST, ON
BEHALF OF LINDNER GROWTH FUND, A
SERIES OF SUCH TRUST
By: /S/ Doug T. Valassis
Doug T. Valassis, Chairman
Ryback Management Corporation, a
Michigan corporation
By: /S/ Eric E. Ryback
Eric E. Ryback, President
