As filed with the Securities and Exchange Commission on April 29, 1998
SEC File Nos. 2-96199
811-3593
____________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 14 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 18 [X]
MBL GROWTH FUND, INC.
(Exact name of Registrant as specified in charter)
520 Broad Street
Newark, New Jersey 07102-3111
(Address of principal executive offices)
Registrant's Telephone Number including Area Code 1-800-435-3191
KATHLEEN M. KOERBER
President
MBL Growth Fund, Inc.
520 Broad Street
Newark, New Jersey 07102-3111
Please send copies of all communications to:
PAUL J. MASON, Esq.
Sutherland, Asbill & Brennan LLP
1275 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2515
This filing shall become effective on May 1, 1998, pursuant to Rule
485(b) under the Securities Act of 1933.
_____________________________________________________________
MBL GROWTH FUND, INC.
___________________________________________________________
CROSS REFERENCE SHEET
Cross reference sheet showing location in the prospectus of
information required by the Items in Part A of Form N-1A.
ITEM NUMBER HEADING IN PROSPECTUS
1 Cover Page
2 Fee Table
3 Financial Highlights
4 General Description of Registrant;
Investment Policies
5 Management
6 Rights accompany Fund shares;
Cover Page; Tax Considerations
7 How to purchase and redeem Fund shares.
How the net asset value is determined.
8 How to purchase and redeem Fund shares.
9 *
______________________________________________________
* Indicates inapplicable or negative.
PROSPECTUS
MBL GROWTH FUND, INC.
MBL Life Assurance Corporation
520 Broad Street, Newark, New Jersey 07102
May 1, 1998
MBL Growth Fund, Inc. (the "Fund") is an open-end, diversified
management investment company, whose primary investment objective is
long-term appreciation of capital. It seeks to achieve this objective
through investment primarily in equity-type securities including
common stocks, as well as securities convertible into, or
exchangeable for, common stocks. The Fund also seeks to earn income,
but this is a secondary objective. To the extent that management
believes it would best achieve the Fund's objectives, the Fund may
adopt a defensive position and hold its assets in cash or in other
kinds of securities such as preferred stocks, bonds, debentures,
notes, government obligations, or other evidences of indebtedness.
See "Investment Policies".
This Prospectus sets forth concisely the information about the
Fund that a prospective investor should know before investing.
Additional information about the Fund has been filed with the
Securities and Exchange Commission ("SEC") in a Statement of
Additional Information which is incorporated herein by reference. The
Statement of Additional Information is available upon request and
without charge from the MBL Life Assurance Corporation. Write to:
Pension and Investment Products, MBL Life Assurance Corporation, 520
Broad Street, Newark, New Jersey, 07102-3111, Attn: MBL Growth Fund,
Inc., or telephone: 1-800-435-3191. Shareholder inquiries may be
made to the same address or telephone number.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
The date of this Prospectus and the date of the Statement of
Additional Information is May 1, 1998.
TABLE OF CONTENTS
Page
FEE TABLE 3
FINANCIAL HIGHLIGHTS 4
GENERAL DESCRIPTION OF REGISTRANT 5
INVESTMENT POLICIES
Objectives 5
Investments 6
MANAGEMENT 7
Preparing for the Year 2000 8
SHARES
How to purchase and redeem Fund shares. 8
How the net asset value is determined. 9
Rights accompanying Fund shares. 10
TAX CONSIDERATIONS 11
STATEMENT OF ADDITIONAL INFORMATION
Table of Contents 12
MBL GROWTH FUND, INC.
FEE TABLE
The purpose of the Fee Table below is to help owners of group
and individual variable annuity contracts funded through separate
accounts of MBL Life Assurance Corporation, which invest in the Fund,
to understand the various Fund expenses that are, in effect, passed
on to those separate accounts and contract owners. The Fee Table,
including the Example below, shows only expenses that are deducted
from the assets of the Fund. For a description of these expenses and
the services provided to the Fund, see "Management" in this
Prospectus. Deductions and charges, including sales charges,
applicable to the various insurance products that invest in the Fund,
are not reflected in this Fee Table. Deductions and expenses
regarding such insurance products are separately described in the
prospectuses related to those products.
ANNUAL FUND OPERATING EXPENSES (1997)
(As a Percentage of Average Net Assets)
Management fees .61%
Other expenses .31%
----
Total .92%
EXAMPLE
A $1,000 investment in the Fund would be subject to the expenses
indicated, assuming (1) a 5% annual return and (2) redemption (no
charges imposed upon redemption) at the end of each time period
shown:
1 Year 3 Years 5 Years 10 Years
$9 $29 $51 $113
This Example should not be considered a representation of past
or future expenses for the Fund. Actual expenses may be greater or
less than those shown above. Similarly, the annual rate of return
assumed in the Example is not an estimate or guarantee of future
investment performance.
FINANCIAL HIGHLIGHTS
Selected data for each share of capital stock outstanding throughout the
years indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Year $10.68 $10.27 $ 8.36 $ 9.55 $ 9.36 $11.00 $15.45 $17.18 $14.06 $11.69
Net investment income 0.13 0.23 0.26 0.21 0.17 0.31 0.66 0.56 0.44 0.46
Net realized and un-
realized gain (loss)
on investments. 3.16 2.24 2.59 (0.01) 1.10 1.25 2.72 (1.46) 3.57 2.735
Net increase (decrease)
in net assets from
operations 3.29 2.47 2.85 0.20 1.27 1.56 3.38 (0.90) 4.01 3.195
Dividends from net
investment income (0.13) (0.24) (0.26) (0.21) (0.17) (0.31) (0.66) (0.58) (0.47) (0.44)
Distributions from net
realized gain from
security transact. (1.67) (1.82) (0.68) (1.18) (0.91) (2.89) (7.17) (0.25) (0.42) (0.385)
Total Distributions (1.80) (2.06) (0.94) (1.39) (1.08) (3.20) (7.83) (0.83) (0.89) (0.825)
Net Asset Value,
End of Year $12.17 $10.68 $10.27 $ 8.36 $ 9.55 $ 9.36 $11.00 $15.45 $17.18 $14.06
Total Return* 31.12% 24.57% 34.75% 2.13% 13.77% 14.67% 22.71% -5.33% 28.51% 27.61%
Ratios/Supplemental Data:
Net Assets, End of
Year (thousands) $57,421 $45,992 $40,151 $32,000 $35,864 $33,685 $37,523 $59,108 $56,805 $40,166
Ratio of Expenses to
Average Net Assets 0.92 % 0.83 % 0.86 % 1.13 % 1.20 % 0.99 % 0.57 % 0.68 % 1.06 % 0.94%
Ratio of Net Investment
Income to Average
Net Assets 1.05 % 2.07 % 2.73 % 2.15 % 1.67 % 2.39 % 3.26 % 3.62 % 2.80 % 3.39%
Portfolio Turnover
Rate 60.47 % 65.37 % 47.49 % 78.29 % 47.46 % 48.10 % 33.74 % 7.11 % 14.69 % 19.43%
Average Commission
Rate Paid $ 0.0228 $ 0.0250 ---- ---- ---- ---- ---- ---- ---- ----
<FN>
* Total Return does not reflect fees and charges deducted by the separate
accounts which invest in the Fund. If such fees and charges were deducted,
the Total Return of the Fund, as shown, would be lower.
</FN>
</TABLE>
See notes to financial statements, which are incorporated by reference
into the Statement of Additional Information.
The information for the five years ended December 31, 1997 in the
table above is taken from the Fund's audited financial statements, which
have been incorporated by reference into the Fund's Statement of Additional
Information from the Fund's 1997 Annual Report. Further information about
the Fund's performance is also contained in the Annual Report. The Fund
will furnish without charge, an additional copy of the Fund's 1997 Annual
Report upon request made to: Pension and Investment Products, MBL Life
Assurance Corporation, 520 Broad Street, Newark, New Jersey 07102-3111,
Attn: MBL Growth Fund, Inc., or by telephoning 1-800-435-3191.
GENERAL DESCRIPTION OF REGISTRANT
The Fund was incorporated under the laws of Maryland on June 30,
1982. The Fund is registered with the SEC under the Investment
Company Act of 1940 (the "1940 Act"), as an open-end, diversified
management investment company commonly known as a "mutual fund". As
do other mutual funds, the Fund offers its own shares of stock
continuously and invests the proceeds of sales in securities of
various other companies in an effort to achieve financial gain.
Shares of the Fund provide the underlying investment for MBL
Variable Contract Account-2 ("VCA-2") and MBL Variable Contract
Account-3 ("VCA-3") (collectively the "Separate Accounts"), and are
not available for direct purchase by the general public.
As of April 1, 1998, the Separate Accounts owned 98% of the
Fund's shares and, consequently, may be deemed to "control" the Fund,
as that term is defined in the 1940 Act. However, voting rights are
provided to holders of variable annuity contracts funded through the
Separate Accounts as described below under "What rights accompany
Fund Shares?"
INVESTMENT POLICIES
OBJECTIVES
The Fund, like other mutual funds, provides an opportunity to:
1. invest in securities of a variety of companies and
industries on a diversified and collective basis, and
2. receive continuous professional investment management.
The Fund's primary investment objective is long-term
appreciation of capital. The Fund also seeks to earn income, but
this is a secondary objective. Since investment involves both
opportunities for gain and risk of loss, no assurance can be given
that the Fund will achieve its objectives. In seeking to achieve its
investment objectives, the Fund follows the investment policies
summarized below. The Fund's policies include the requirements of
the New Jersey Statutes Annotated which are applicable to the Fund in
order that Fund shares may serve as an authorized investment of the
Separate Accounts. Those policies which are required by New Jersey
statutes are described in the Statement of Additional Information,
"Description of Certain Investments" and "Investment Restrictions".
Such statutes are subject to amendment.
INVESTMENTS
It is the Fund's policy to invest primarily, but not
exclusively, in equity-type securities, including common stocks, as
well as securities convertible into, or exchangeable for, common
stocks. Common stocks represent ownership, rather than debt
interests, and fluctuate in value depending on such factors as the
performance of the companies whose securities are held and general
economic conditions. Securities convertible into or exchangeable for
common stocks consist primarily of warrants and bonds or preferred
stocks which have warrants attached, or which are exchangeable into a
specified number of shares of common stock.
In selecting specific securities for investment, emphasis is
placed on securities that are out of favor where a catalyst exists
for turning disappointment into opportunity. Any number of factors
can indicate value. These can include statistical indications such
as relatively low multiples of book value or cash flow. More
fundamental factors include industry consolidations and large tax
loss carryforwards on the books of companies that are moving toward
profitability. On a seasonal basis, in December there is often value
in stocks that have performed poorly during the year that are further
depressed by year end tax selling. Value can also be reflected by a
competitive advantage such as a brand name, a license or a copyright.
These businesses usually require only modest capital investment and
little debt, producing enough cash to spend substantial sums in
product development and marketing.
Besides value, emphasis is also placed on the presence of a
catalyst that will unlock a company's potential. Management changes,
published purchases by officers, write-offs, restructuring, employee
reductions, sales of underperforming assets, larger stock repurchases
by a company, and tax law changes on such things as capital gains and
investment tax credits are examples of events which might indicate
the potential for positive developments.
Importance is placed on assessing the judgment, quality, and
integrity of management, such as the way management has allocated
capital over a long period of time and whether management has
repurchased shares when returns have warranted it. Also important
are the track record of product development, and managers who have a
substantial personal investment in the enterprise, taking most of
their compensation in incentives, and placing more emphasis on
profitability than growth.
The Fund diversifies its investments among a number of
industries and companies in order to spread the normal risks of
investing in securities. The degree of diversification may be
varied, within the limits of the Fund's investment restrictions, to
best achieve the Fund's objectives.
There may be periods during which the Fund's investment adviser
has determined that investment opportunities in the equity markets
are diminished (due to either fundamental changes in those markets or
an anticipated general decline in the value of equity securities).
To the extent that the investment adviser believes it would best
achieve the Fund's objectives, the Fund may adopt without limitation
a defensive position and hold its assets in cash or in other kinds of
securities such as preferred stocks, bonds, debentures, notes,
government obligations, or other evidences of indebtedness.
Investments are made primarily in securities traded on national
securities exchanges and, to a lesser extent, in securities traded in
the "over-the-counter" market.
The Fund normally holds its investments until the under-
valuation that the Fund's investment adviser believes existed is
corrected. This can be for a relatively long period of time while
the Fund seeks its objective of long-term capital appreciation.
However, investments may be sold whenever the investment adviser
believes that the opportunity for current profits or the risk of
market decline outweighs the prospect of long-term and short-term
capital appreciation. Certain securities may be acquired from time
to time in an effort to earn short-term profits. To the extent that
the Fund engages in short-term trading, it incurs greater brokerage
charges than would otherwise be the case.
The investment objectives and policies stated above may be
changed without shareholder approval. The Fund is subject to certain
investment restrictions which are considered fundamental policies of
the Fund and which may not be changed without the approval by vote of
a majority of the Fund's shareholders. These fundamental investment
restrictions are described in the Statement of Additional
Information, "Investment Restrictions".
MANAGEMENT
The Fund's Board of Directors and officers are responsible for
its management. The officers carry out the day-to-day functions of
the Fund, subject to the supervision of the Fund's Board of
Directors, which has final responsibility for the management of the
Fund's affairs and which may exercise such responsibility between
meetings through an Executive Committee.
The Fund's investment adviser is Markston Investment Management
("Markston"), 1 North Lexington Avenue, White Plains, New York 10601.
Markston is a partnership between Markston International, Inc. and
MBL Sales Corporation, an indirect subsidiary of MBL Life Assurance
Corporation ("MBL Life"). Markston is a registered investment
adviser under the Investment Advisers Act of 1940.
Investment decisions for the Fund have been made by two or more
of a team of three individuals (Michael Mullarkey, John Stone, and
Roger Lob) since 1987, and by one or more of two of those three
(Mullarkey and Stone) since 1981. Michael Mullarkey and John Stone
are founders of Markston Investment Management. Michael Mullarkey
has been the Fund's primary portfolio manager since 1993.
Fund assets are divided among the managers within certain
parameters. Markston reviews this asset allocation by manager
periodically, and may adjust this allocation based on investment
performance and new investment opportunities identified by each
manager. This multi-manager investment structure achieves the Fund's
objective of prudent diversification while allowing each manager to
focus his research on a limited number of companies.
Under the Investment Advisory Agreement, Markston provides the
Fund with investment advisory and management services, and, subject
to the authority of the Board of Directors, is responsible for
overall management of the Fund's business affairs. A description of
the services provided by Markston pursuant to this Agreement appears
in the Fund's Statement of Additional Information, "Investment
Advisory and Other Services".
For the services rendered by Markston, Markston receives a basic
fee, adjusted for investment performance, on the basis of a
percentage of net assets. A description of how the fee is computed
appears in the Statement of Additional Information, "Investment
Advisory and Other Services". During 1997, Markston received from
the Fund an advisory fee of .61% of the Fund's average net assets for
that year.
The Fund pays all corporate expenses incurred in its operation
not assumed by Markston or the Fund's distributor. The Fund's total
operating expenses for the year ended December 31, 1997, including
advisory fees, were .92% of the Fund's average net assets for that
year.
Markston also serves as investment adviser for MAP-Equity Fund,
a mutual fund whose shares are available for purchase by the general
public. Markston also acts as investment adviser for equity
investments of MBL Life and for other advisory clients.
State Street Bank & Trust Company, P.O. Box 8500, Boston,
Massachusetts 02266-8500, is custodian of the Fund's investment
securities and other assets and also serves as the Fund's transfer
agent and dividend disbursing agent.
PREPARING FOR THE YEAR 2000
The Fund relies on service providers, including, among others,
its investment adviser, custodian and transfer agent for the systems
and resources necessary to perform the shareholder services described
in this prospectus. The Fund has confirmed with its service
providers that they have developed and are in the process of
implementing a Year 2000 transition plan. The resources being
devoted to this effort by these service providers are substantial.
It is difficult to predict with precision whether the amount of
resources ultimately devoted or the outcome of these efforts will
have a negative impact on the Fund. However, as of the date of this
Prospectus, it is not anticipated that the shareholders will
experience any negative effects on their investment, or on the
services provided in connection therewith, as a result of Year 2000
transition implementation. The service providers currently
anticipate that their systems will be Year 2000 compliant on or about
January 1, 1999, but there can be no assurance that these service
providers will be successful or that interaction with the service
providers will not impair the Fund's ability to meet shareholder
requirements at that time.
SHARES
HOW TO PURCHASE AND REDEEM FUND SHARES.
Shares of the Fund are sold in a continuous offering and may be
purchased by separate accounts of any life insurance company.
First Priority Investment Corporation ("First Priority"), a
registered broker/dealer under the Securities Exchange Act of 1934
and a member of the National Association of Securities Dealers, Inc.,
is the distributor of the Fund. First Priority, incorporated in 1993
under the laws of New Jersey, is a wholly-owned indirect subsidiary
of MBL Life. First Priority's principal office is 520 Broad Street,
Newark, New Jersey 07102.
The Separate Accounts fund variable annuity contracts issued by
Mutual Benefit Life Insurance Company and assumed by MBL Life
effective May 1, 1994. Under these contracts, net purchase payments
made by a contract purchaser are placed in a Separate Account. The
Separate Account, in turn, invests in shares of the Fund.
Annuity contracts funded through the Separate Accounts and the
Fund are used in connection with individual retirement, Keogh and
other retirement plans. Information regarding these plans is
contained in the prospectuses for the Separate Accounts.
Shares of the Fund are purchased and redeemed by the Separate
Accounts at net asset value, without charge. However, the annuity
contracts funded through the Separate Accounts are sold subject to
certain fees and charges. These fees and charges for annuity
contracts are more fully described in the prospectuses for the
Separate Accounts, which should be read together with this
Prospectus.
If MBL Life receives purchase or redemption requests under
variable annuity contracts prior to 4:00 p.m., New York City time,
on any day that the Fund's net asset value is calculated, MBL Life,
based on the net amount of such requests, transmits to the Fund an
order to purchase or redeem Fund shares. Such purchase or redemption
is effected at the Fund's net asset value per share calculated as of
such date.
Payment to the Separate Accounts for Fund shares redeemed will
ordinarily be made within seven days after receipt of the redemption
request. The Fund may suspend the right of redemption or postpone
the date of payment on redemption during any period when (1) the New
York Stock Exchange is closed (for reasons other than holidays and
weekends), or trading on the New York Stock Exchange is restricted,
(2) an emergency exists, as determined by the SEC, making disposal of
the Fund's investment securities or valuation of the Fund's assets
not reasonably practicable, or (3) the SEC has so permitted by
order for the protection of the Fund's shareholders.
It is not anticipated that shares will be redeemed for other
than cash. However, the Fund reserves the right to pay the
redemption price to the Separate Account, in whole or in part, by a
distribution in kind from the Fund's investment portfolio, in lieu of
cash, taking the securities at their value employed for determining
such redemption price, and selecting the securities in such manner as
the Board of Directors may deem fair and equitable. If shares are
redeemed in this way, brokerage costs will ordinarily be incurred by
the Separate Account in converting such securities into cash.
HOW THE NET ASSET VALUE IS DETERMINED.
The net asset value of Fund shares is computed each day on which
the New York Stock Exchange is open for trading, as of the close of
regular trading of that Exchange. The net asset value of Fund shares
is computed by dividing the value of the Fund's investment
securities, plus cash and all other assets, less all liabilities, by
the number of Fund shares outstanding. The value of the Fund's
investment securities is generally their market value for securities
traded on a national securities exchange or over-the-counter and for
which there are readily available market quotations, amortized cost
for debt securities having a remaining maturity of 60 days or less,
or fair value as calculated by the Fund's Board of Directors for all
other securities or assets. A more detailed description of the
methods of valuing the Fund's investment securities appears in the
Statement of Additional Information, "Purchase, Redemption and
Pricing of Securities".
RIGHTS ACCOMPANYING FUND SHARES.
The Fund is authorized by its Articles of Incorporation to issue
21,000,000 shares of $1 par value common stock. Shares, when issued,
are fully-paid and nonassessable and have no pre-emptive, conversion
or exchange rights.
All shares of common stock have equal rights as to redemption
and participation in dividends, earnings, and assets remaining upon
liquidation. Shares may be issued as full or fractional shares, and
each fractional share has proportionately the same rights, including
voting rights, as are provided for a full share. The rights
accompanying Fund shares are legally vested in the Separate Accounts.
However, as a matter of policy, holders of variable annuity contracts
funded through the Separate Accounts have the right to instruct MBL
Life as to voting Fund shares held by the Separate Accounts on
all matters to be voted on by Fund shareholders.
The Fund holds shareholder meetings in any year in which any of
the following is required to be acted on by shareholders: election of
a majority of the Fund's Board of Directors, approval of a new
investment advisory or distribution agreement, or ratification of a
change of independent accountants. Voting rights of the participants
in the Separate Accounts are more fully set forth in the prospectuses
relating to those accounts which should be read together with this
Prospectus.
VOTING NON-CUMULATIVE RIGHTS. Each share of common stock is
entitled to one vote. The shares have "non-cumulative" voting
rights, which means that the holders of more than 50% of the shares
voting for the election of directors can elect all of the directors
if they choose to do so, and, in such event, the holders of the
remaining voting shares will not be able to elect any directors.
DIVIDENDS AND CAPITAL GAINS. The Fund distributes semiannually
to the Separate Accounts any net investment income, such as
dividends, and distributes annually any net realized capital gains.
More frequent distributions may be made to the extent permitted or
required by law. Any such distribution is ordinarily credited in the
form of additional Fund shares, purchased at their net asset value on
the date that the distribution is payable. Such distributions are
not taxable to participants in the Separate Accounts. Since shares
of the Fund will be offered only through Separate Accounts, reference
is made to the prospectus relating thereto for information regarding
the federal income tax treatment accorded distributions of investment
income and capital gains to the Separate Accounts, and distributions
by the Separate Accounts pursuant to the terms of the contracts.
EVIDENCE OF OWNERSHIP. Each purchase is confirmed to the
Separate Accounts in a written statement of the number of shares
purchased and the aggregate number of shares currently held. The
Separate Accounts have the right to receive stock certificates, but
have elected not to exercise this right. Participants in the Separate
Accounts do not have a corresponding right.
TAX CONSIDERATIONS
The Fund has qualified and expects to continue to qualify as a
regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). As such, the Fund is not
subject to Federal income tax on that part of its investment company
taxable income (consisting generally of net investment income, net
gains from certain foreign currency transactions, and net short-term
capital gain, if any) and any net capital gain (the excess of net
long-term capital gain over net short-term capital loss) that it
distributes to its shareholders. It is the Fund's intention to
distribute substantially all such income and gains.
Shares of the Fund are offered only insurance company separate
accounts that fund annuity contracts. Under the Code, no tax is
imposed on an insurance company with respect to income of a
qualifying separate account properly allocated to the value of
eligible variable annuity or variable life insurance contracts. For
a discussion of the taxation of life insurance companies and the
Separate Accounts, as well as the tax treatment of the annuity
contracts and the holders thereof, see "Federal Income Tax Status"
included in the respective prospectuses related to the annuity
contracts.
The Fund also intends to comply with the diversification
requirements imposed by section 817(h) of the Code and the
regulations thereunder.
The foregoing is only a summary of some of the important Federal
income tax considerations generally affecting the Fund and its
shareholders; see the Statements of Additional Information for a more
detailed discussion. Prospective investors are urged to consult
their tax advisors.
STATEMENT OF ADDITIONAL INFORMATION
Page
Table of Contents
General Information and History 1
Description of Certain Investments 1
Investment Restrictions 3
Management of the Fund 5
Investment Advisory and Other Services 7
Brokerage Allocation 10
Personal Investing 11
Purchase, Redemption and Pricing of Securities 12
Taxes 13
Financial Statements 14
Additional Information 14
FOR FURTHER INFORMATION CONCERNING THE FUND, PLEASE CONSULT THE
FUND'S STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 1998.
MBL GROWTH FUND, INC.
520 Broad Street
Newark, New Jersey 07102-3111
1-800-435-3191
DISTRIBUTOR
First Priority Investment Corporation
520 Broad Street
Newark, New Jersey 07102-3111
1-800-559-5535
INVESTMENT ADVISER
Markston Investment Management
1 North Lexington Avenue
White Plains, New York 10601-1702
(914) 761-4700
CUSTODIAN AND TRANSFER AGENT
State Street Bank & Trust Company
P.O. Box 8500
Boston, Massachusetts 02266-8500
1-800-343-0529
SPECIAL COUNSEL
Sutherland, Asbill & Brennan LLP
Washington, D.C.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
New York, New York
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION
IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE. NO PERSON IS
AUTHORIZED TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS
OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS.
MBL GROWTH FUND, INC.
________________________________________________________
CROSS REFERENCE SHEET
Cross reference sheet showing location in the Statement of
Additional Information of information required by the Items in
Part B of Form N-1A.
HEADING IN STATEMENT OF
ITEM NUMBER ADDITIONAL INFORMATION
10 Cover Page
11 Table of Contents
12 General Information and History;
Investment Advisory and Other
Services
13 Description of Certain Investments;
Investment Restrictions
14 Management of the Fund
15 Management of the Fund; Investment
Advisory and Other Services
16 Investment Advisory and
Other Services
17 Brokerage Allocation
18 *
19 Purchase, Redemption and
Pricing of Securities
20 Taxes
21 Investment Advisory and
Other Services
22 *
23 Financial Statements**
______________________________________________________
* Indicates inapplicable or negative.
** Financial Statements are incorporated by reference to
the 1997 Annual Report to Shareholders.
MBL GROWTH FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
May 1, 1998
This Statement of Additional Information is not a prospectus but
has been incorporated by reference into, and should be read in
conjunction with, the Prospectus of MBL Growth Fund, Inc. dated May 1,
1998. A copy of the Prospectus may be obtained from MBL Life Assurance
Corporation ("MBL Life"). Write to: Pension and Investment Products,
MBL Life Assurance Corporation, 520 Broad Street, Newark, New Jersey
07102-3111, Attn: MBL GROWTH FUND, INC. or telephone 1-800-435-3191.
TABLE OF CONTENTS
Cross-Reference
to Page in
Page Prospectus
General Information and History . . . . . 1 3
Description of Certain Investments. . . . 1 3
Investment Restrictions . . . . . . . . . 3 4
Management of the Fund. . . . . . . . . . 5 5
Investment Advisory and Other Services. . 7 5
Brokerage Allocation. . . . . . . . . . . 10 -
Personal Investing. . . . . . . . . . . . 11 -
Purchase, Redemption and
Pricing of Securities . . . . . . . . . 12 5
Taxes . . . . . . . . . . . . . . . . . . 13 7
Financial Statements. . . . . . . . . . . 14 -
Additional Information. . . . . . . . . . 14 -
GENERAL INFORMATION AND HISTORY
The business history of MBL Growth Fund, Inc. (the "Fund") is
described in its Prospectus.
DESCRIPTION OF CERTAIN INVESTMENTS
The Fund's investment objectives and policies are described in the
Fund's Prospectus under "Investment Policies".
The following is a description of certain types of investments
which may be made by the Fund and certain investment restrictions
imposed on the Fund in seeking to achieve its objectives:
A warrant is a right which entitles its holder, for a specified
period of time, to acquire a specified number of shares of common stock
for a specified price per share. If the share price at the time the
warrant is exercised exceeds the total of the exercise price of the
warrant and its purchase price, the Fund experiences a gain to the
extent by which this total is exceeded by the share price. However, if
the share price at the time the warrant expires is less than the
exercise price of the warrant, the Fund will suffer a loss to the extent
of the purchase price of the warrant.
The Fund will not invest more than 5% of its net assets in
warrants and not more than 2% in warrants not listed on the New York or
American Stock Exchanges, except when they are acquired in a unit or are
attached to other securities.
The Fund limits its investments in stock and evidences of
indebtedness in accordance with the New Jersey Statutes Annotated. No
investment, except as noted below, is made in the stock of any company
unless, during each of the five years preceding purchase, (1) a cash
dividend has been paid on the stock, or (2) the earnings of the company
were sufficient to support the payment of dividends at an annual rate of
4% of the stock's par value or, in the case of stock having no par
value, upon the stated capital in respect thereto. No investment,
except as noted below, is made in an evidence of indebtedness of any
company which is in default of interest. An investment not otherwise
eligible under these limitations may be made if, after giving effect to
the investment, the total cost of such non-eligible investments does not
exceed 5% of the total assets of the Fund.
The foregoing limitations do not apply to any stock or evidence of
indebtedness acquired pursuant to court-ordered or voluntary
reorganizations, as payment of an existing indebtedness, as realization
of collateral for a loan in default or through the exercise of rights of
conversion, warrants or rights to purchase stock or preemptive rights to
subscribe to stock, contained in or attached to a then existing
investment of the Fund. The foregoing limitation on stock investments
does not apply to stock which is preferred as to dividends over any
class the purchase of which is not prohibited, or to stock of a
corporation engaged primarily in the business of owning, developing or
leasing real property.
Investments are made primarily in securities traded on national
securities exchanges and, to a lesser extent, in securities traded in
the "over-the-counter" market. In accordance with the Statutes of New
Jersey, no investment is made in common stock or shares which are not:
listed or traded on a securities exchange in the United States or
Canada; included in the national price listings of over-the-counter
securities of the National Association of Securities Dealers, Inc.; or
determined by the Commissioner of Banking and Insurance of New Jersey to
be publicly held or traded.
The Fund restricts its investment in securities of foreign issuers
to not more than 10% of the value of the Fund's total net assets. Such
securities may be subject to additional federal taxes which would have
the effect of increasing the cost of such investments and may be subject
to foreign government taxes which could reduce the income yield on such
securities.
In addition, foreign investments may be affected favorably or
unfavorably by changes in currency rates and exchange control
regulations. There may be less publicly available information about a
foreign company than about a United States ("U.S.") company, and foreign
companies may not be subject to accounting, auditing and financial
reporting standards and requirements comparable to those applicable to
U.S. companies. Securities of some foreign companies are less liquid or
more volatile than securities of U.S. companies, and foreign brokerage
commissions are generally higher than in the United States. Investments
in foreign securities may also be subject to other risks different from
those affecting U.S. investments, including local political or economic
developments, expropriation or nationalization of assets and imposition
of withholding taxes on dividend or interest payments.
In addition to the investments described in the Fund's Prospectus,
the Fund may also buy "restricted" securities which cannot be sold
publicly until registered under the Securities Act of 1933. The Fund's
ability to dispose of investments in "restricted" securities at
reasonable price levels might be limited unless and until their
registration under the Securities Act of 1933 has been completed. The
Fund will endeavor to have the issuing company pay all the expenses of
any such registration, but there is no assurance that the Fund will not
have to pay all or some of these expenses. The Fund has not invested in
any "restricted" securities to date, and has no current intention of
doing so in the future.
INVESTMENT RESTRICTIONS
The investment objectives and policies stated above, as well as
those described in the Prospectus, may be changed without shareholder
approval. The following investment restrictions are fundamental
policies of the Fund and may not be changed without the approval by vote
of the majority of the outstanding shares of the Fund, pursuant to the
voting procedures applicable to MBL Variable Contract Account-2 ("VCA-
2"), MBL Variable Contract Account-3 ("VCA-3") (collectively the
"Separate Accounts"), and any other separate accounts to which shares of
the Fund are being sold.
The Fund does not:
1. invest more than 10% of the value of its total net assets in
securities which are not readily marketable, such as
restricted stock, debt obligations acquired in private
transactions, and securities which are secured by interests
in real estate, or more than 5% of the value of its total
assets in equity securities which are not readily marketable,
2. invest in real estate, although it may buy securities of
companies which deal in real estate and securities which are
secured by interests in real estate, including interests in
real estate investment trusts,
3. invest in commodities or commodity contracts,
4. invest in securities of other registered investment
companies, except by purchases in the open market involving
only customary broker's commissions or as part of a merger,
consolidation, or acquisition, subject to limitations in the
Investment Company Act of 1940,
5. make loans, except by the purchase of bonds or other debt
obligations customarily distributed privately to
institutional investors,
6. invest more than 25% of the value of its total assets in
securities of any one industry,
7. invest more than 5% of the value of its total assets in
securities (except U.S. Government securities) of any one
issuer,
8. invest in more than 8% of the outstanding voting securities,
or in more than 10% of any other class of securities, of any
one issuer,
9. invest more than 5% of the value of its total assets in
securities of companies having a record of less than three
years of continuous operations,
10. act as an underwriter of securities of other issuers, except
to the extent that it may be deemed to be an underwriter in
reselling securities, such as restricted securities, acquired
in private transactions and subsequently registered under the
Securities Act of 1933,
11. borrow money, except that, as a temporary measure for
extraordinary or emergency purposes and not for investment
purposes, the Fund may borrow from banks up to 10% of its
total assets taken at cost, provided the total borrowings
have an asset coverage, based on value, of at least 300%,
12. pledge more than 15% of its total assets taken at cost (as an
operating policy, the Fund will not pledge its assets to the
extent that the percentage of net assets pledged plus sales
load will exceed 10% of the Fund's offering price),
13. sell securities short,
14. buy securities on margin, except that it may obtain such
short-term credits as may be necessary for the clearance of
purchases and sales of securities,
15. invest in, or write, puts, calls, or combinations thereof,
16. invest in interests in oil, gas or other mineral exploration
or development programs,
17. buy or hold the securities of any issuer, if the officers and
directors of the Fund or of its investment adviser, who
individually own beneficially more than one-half of 1% of the
securities of such issuer, together own more than 5% of the
securities of such issuer,
18. participate on a joint or joint and several basis in any
trading account in securities, or
19. invest in companies for the purpose of exercising control of
management.
The Fund does not issue senior securities except to the extent set
out in paragraph 11 above.
The Fund also intends to comply with Section 817(h) of the
Internal Revenue Code and the regulations adopted thereunder which
impose certain diversification requirements on the Separate Accounts
investing in the Fund, and, therefore, may affect the securities in
which the Fund may invest. Further information regarding the impact of
Section 817(h) is contained in the prospectuses for the Separate
Accounts.
MANAGEMENT OF THE FUND
The directors and officers of the Fund, together with a brief
description of their occupations during the past five years, are as
follows:
*+ Kathleen M. Koerber, President and Director
520 Broad Street
Newark, New Jersey 07102-3111
Executive Vice President - Insurance Operations and Chief
Operating Officer, MBL Life since September 1991; Director,
First Priority Investment Corporation ("First Priority");
Member of the Management Committee of Markston Investment
Management ("Markston").
* + William G. Clark, Executive Vice President and Director
520 Broad Street
Newark, New Jersey 07102-3111
Senior Vice President - Pension and Investment Products, MBL
Life since 1995, prior thereto Vice President - Group Pension
Operations; Director and President, First Priority; Member of
the Management Committee of Markston.
Horace J. DePodwin, Director
One Gateway Center, Suite 420
Newark, New Jersey 07102
President, Economic Studies, Inc.; Professor and Dean
Emeritus, Graduate School of Management, Rutgers - The State
University of New Jersey.
Herbert M. Groce, Jr., Director
875 Berkshire Valley Road
Wharton, New Jersey 07885
The Most Reverend, Archbishop of the Diocese of St. Paul,
Metropolitan of the Anglican Rite, Synod of the Americas, The
Holy Catholic Church as of November, 1996; prior thereto The
Right Reverend, Missionary Bishop of the Diocese of St. Paul,
The American Anglican Church as of January 8, 1994; prior
thereto The Venerable Archdeacon of the East of the Episcopal
Missionary Church from February, 1993 to January, 1994.
Jerome M. Scheckman, Director
P.O. Box 807
Plandome, New York 11030
Formerly Consultant and Managing Director, Salomon Brothers
Inc.; Member of the Corporation, Babson College; Member of
the Auxiliary Board, Mt. Sinai Hospital; Member of the
Business Advisory Counsel, Alfred University.
* Albert W. Leier, Vice President and Treasurer
520 Broad Street
Newark, New Jersey 07102-3111
Vice President and Controller, MBL Life; Director, Vice
President and Treasurer, First Priority.
* Judith C. Keilp, Vice President and Secretary
520 Broad Street
Newark, New Jersey 07102-3111
Counsel, MBL Life since 1993; Vice President and Secretary,
First Priority.
* Christine M. Dempsey, Assistant Treasurer
520 Broad Street
Newark, New Jersey 07102-3111
Director of Financial Reporting, MBL Life since 1994; prior
thereto Manager of Financial Reporting Department, MBL Life.
* Vicki J. Herbst, Assistant Secretary
520 Broad Street
Newark, New Jersey 07102-3111
Registered Products Compliance Manager, MBL Life since 1994,
prior thereto Legal Assistant, MBL Life.
___________________________
* Interested person of the Fund. Prior to May 1, 1994, each
individual maintained a similar position and/or title with The
Mutual Benefit Life Insurance Company in Rehabilitation ("Mutual
Benefit Life") that he or she now holds with MBL Life.
+ Member of the Executive Committee.
All of the above-named directors and officers serve in the same
capacities for MAP-Equity Fund and MAP-Government Fund, Inc.
Mr. Scheckman also serves as a Member of the Management Committee
of the MBL Variable Contract Account-7, a managed separate account
sponsored by MBL Life.
The officers carry out the Fund's day-to-day functions, subject to
the supervision of the Fund's Board of Directors which has final
responsibility for the management of the Fund's affairs and which
exercises such responsibility between meetings through its Executive
Committee. The Fund pays no remuneration to directors who also serve as
directors, officers or employees of MBL Life, Markston or First
Priority. Aggregate compensation of other directors who are not
interested persons of MBL Life, Markston or First Priority, during 1997
is shown below. The Fund does not pay pension or retirement benefits to
the Directors.
TOTAL COMPENSATION
FROM FUND AND FUND
NAME OF PERSON, AGGREGATE COMPEN- COMPLEX PAID TO
POSITION SATION FROM FUND DIRECTORS
Horace J. DePodwin, $2,500 $7,500
Director
Herbert M. Groce, Jr., $2,500 $7,900
Director
Jerome M. Scheckman, $2,500 $10,700
Director
As of the date of this Statement of Additional Information, the
directors and officers of the Fund each owned directly or beneficially
less than 1% of its outstanding shares.
Investment Advisory and Other Services
Markston, the Fund's investment adviser, is a New Jersey
partnership between Markston International, Inc. and MBL Sales
Corporation. Markston International, Inc. which is wholly-owned by
Michael J. Mullarkey, John R. Stone, and other Markston employees, is a
49% general partner of Markston, and MBL Sales Corporation, an indirect
wholly-owned subsidiary of MBL Life, is a 51% general partner.
On December 2, 1982 Mutual Benefit Life provided the Fund's
initial capital by buying, for investment purposes, 10,000 shares of
common stock at $10.00 per share. In accordance with the Rehabilitation
Plan of Mutual Benefit Life, Mutual Benefit Life's direct investment in
the Fund was transferred to MBL Life as of May 1, 1994. The
Rehabilitation Plan requires a reallocation over time of what were
Mutual Benefit Life's assets, including what was Mutual Benefit Life's
direct investment in the Fund, which could result in a reduction of the
amounts currently invested in the Fund. As of April 1, 1998, MBL Life
owned beneficially and of record 2% of the shares of the Fund. As of
April 1, 1998, VCA-2 owned beneficially and of record 92% of the shares
of the Fund and consequently may be deemed to "control" the Fund, as
that term is defined in the Investment Company Act of 1940. As of April
1, 1998, VCA-3 owned beneficially and of record 6% of the shares of the
Fund. Voting rights, however, are provided to holders of variable
annuity contracts funded through Separate Accounts as described in the
Fund's Prospectus, "Rights accompanying Fund shares".
Markston, pursuant to an Investment Advisory Agreement, provides
the Fund with investment advisory and management services, including
investment recommendations based on a continual study of the general
economy and specific industries and companies, placement of orders for
the purchase and sale of investment securities, office space, all
necessary office facilities, all personnel reasonably necessary for the
Fund's operations and ordinary clerical services, and all compensation
of directors, officers and employees of the Fund except for compensation
of the Fund's directors who are not interested persons of MBL Life,
Markston or First Priority.
For the services rendered by Markston, Markston receives a
periodic fee (the "basic fee") at the annual rate of .50% of the first
$200,000,000 of the Fund's daily net assets, .45% of the next
$100,000,000 of such value, .40% of the next $100,000,000 of such value
and .35% of all such value in excess of $400,000,000. The fee is
computed and accrued daily and paid quarterly.
The basic fee may be increased or decreased by an amount (the
"adjustment amount") determined according to a formula based on the
Fund's performance in relation to the Standard and Poor's 500 Composite
Stock Index (the "Index"). A period of 104 consecutive weeks is the full
period over which performance is computed. This period is a rolling
period with each calendar week designated as a subperiod, with the most
recent subperiod substituted for the earliest subperiod as time passes.
The performance related portion of the fee is computed over this rolling
period, and the fee is payable quarterly.
This formula provides for an increase or decrease in the basic fee
by an "adjustment rate" equal to .05% per annum (.00096% per week) for
each full two percentage points that the Fund's investment performance
(reflecting reinvestment of cash distributions) is better or worse
respectively, than the investment record of the Index (with cash
distributions also reinvested) for the 104 calendar week period. The
maximum adjustment is .30% per annum (.00577% per week) for performance
better or worse than that of the Index by 12 percentage points or more.
The investment performance of the Fund for any period is equal to
the change in the Fund's net asset value per share during such period
expressed as a percentage of the Fund's net asset value per share at the
beginning of such period. The investment record of the Index for the
same period is the change in the level of the Index during such period
expressed as a percentage of the Index level at the beginning of the
period.
Because the adjustment to the basic fee rate is based on the
comparative performance of the Fund and the Index, the controlling
factor is not whether Fund performance is up or down per se, but whether
it is up or down more or less than the Index. Moreover, the comparative
investment performance of the Fund is based solely on the relevant
performance period without regard to the cumulative performance over a
longer or shorter period of time.
Markston has entered into a separate Service Agreement with the
Fund and MBL Life under which MBL Life furnishes, on a cost
reimbursement basis, investment advisory and other personnel, research
and statistical facilities, and services required by Markston in
connection with its performance under the Investment Advisory Agreement.
During 1995, 1996, and 1997, respectively, Markston received from
the Fund advisory fees of $130,570, $181,194, and $317,043.
During 1995, 1996, and 1997, Markston reimbursed MBL Life $27,142,
$20,859, and $28,811 respectively, under the Service Agreement.
The present Investment Advisory Agreement and Service Agreement
were last approved by the Fund's shareholders on April 12, 1995, and by
the Fund's Board of Directors on March 11, 1998.. The Investment
Advisory Agreement and Service Agreement will continue from year to
year, provided that such continuance is approved at least annually (1)
by the vote, at a meeting, of a majority of the directors who are not
parties to the Agreement or interested persons, as defined in the
Investment Company Act of 1940, of such parties and (2) by the Fund's
Board of Directors or by the vote of a majority of the outstanding
voting securities of the Fund. Each Agreement may be terminated at any
time by the Fund on written notice of not more than 60 days, nor less
than 30 days, and automatically terminates in the event of assignment.
The Investment Advisory Agreement may be terminated at any time by
Markston on written notice to the Fund of not less than one year.
Under a Distributor's Agreement, First Priority distributes the
Fund's shares on a best efforts basis. As distributor First Priority
does not act as the Fund's agent, but rather as principal which
purchases securities from the Fund and resells them for its own account.
First Priority assumes certain expenses in connection with the offering
and sale of Fund shares, including the expenses of printing and
distributing Fund prospectuses and preparing, printing and distributing
advertising and sales literature (including copies of reports to
shareholders used as sales literature).
The Fund pays all corporate expenses incurred in its operation not
assumed by Markston or First Priority, including brokers' commissions;
interest charges; taxes and governmental fees attributable to
transactions for the Fund; all other applicable taxes arising out of the
investment operations of the Fund, including income and capital gains
taxes, if any; expenses of the issue or redemption of shares; expenses
of registering or qualifying shares for sale; charges of custodians (for
custodial, bookkeeping, and daily share-pricing services), transfer
agents (including the cost of printing and mailing reports, proxy
statements and notices to shareholders), and registrars; costs of
auditing and legal services provided by independent firms; and premiums
for investment company errors and omission insurance.
To the extent that any expenses are allocated between the Fund and
any other entity, the method of allocation is approved by the Fund's
Board of Directors.
Markston and First Priority perform similar services for MAP-
Equity Fund, a mutual fund whose shares are available for purchase by
the general public.
First Priority serves as both investment adviser and distributor
for MAP-Government Fund, Inc., a money market fund, and for MBL Variable
Contract Account-7, a separate account of MBL Life, registered as an
investment company. Markston and First Priority provide investment
advisory and distribution services, respectively, to other entities.
In view of the terms and conditions of the Rehabilitation Plan,
applications for new contracts are currently not being accepted by the
Separate Accounts. Additional purchase payments under the existing VCA-
2 Contracts are being accepted, and the Fund continues to issue shares
with respect to reinvestment of dividends and capital gain
distributions, if any. Redemptions from the Separate Accounts continue
as requested. Sales of VCA-3 contracts were discontinued in January
1985.
State Street Bank & Trust Company, P.O. Box 8500, Boston,
Massachusetts 02266-8500 is custodian of the Fund's investment
securities and other assets. The Bank also serves as the Fund's
transfer agent and dividend disbursing agent through an affiliate,
Boston Financial Data Services, Inc., Two Heritage Drive, Quincy,
Massachusetts 02171. In carrying out these functions, neither the Bank
nor its affiliate perform managerial or policymaking functions for the
Fund.
BROKERAGE ALLOCATION
Markston makes decisions as to buying and selling investment
securities. In placing orders with brokers and dealers for the purchase
and sale of the Fund's investment securities, Markston seeks the best
execution at the most favorable prices, considering all of the
circumstances. Purchases and sales of securities in the over-the-
counter market are transacted with principal market makers, except where
it is believed that better prices and executions are available
elsewhere.
While Markston does not intend to limit the placement of orders to
any particular broker, it generally gives preference to those brokers
who are believed to give best execution at the most favorable prices and
who also provide research and other brokerage services to Markston and
the Fund. Research services include written and oral advice, analyses
and reports concerning issuers, industries, securities, markets,
economic factors and trends, and portfolio strategy.
Commissions charged to the Fund by brokers who provide these
services have been higher than commissions charged by those who do not
provide them. These higher commissions are paid only if Markston
determines that they are reasonable in relation to the value of the
services provided and it has reported to the Board of Directors of the
Fund, on a periodic basis, to that effect. Markston investment
personnel determine the overall reasonableness of commissions paid by
rating brokers on such general factors as execution capabilities,
quality of research and financial condition, as well as the net results
of specific transactions, taking into account such factors as price,
promptness, size of order and difficulty of execution. Markston will
not use broker commissions to offset business operating expenses. The
availability of those services was taken into account in establishing
the investment advisory fee. Markston has not entered into any agreement
with brokers whereby brokers pay designated fund expenses if brokerage
commissions generated by the Fund reach specified levels.
Markston does not purchase securities for the Fund from dealers in
principal transactions, including underwritten public offerings, with
the intention of receiving research, although Markston frequently
receives the standard published research of these dealers. Markston
believes that the Fund could receive no better prices, consistent with
the best execution, for the securities purchased, even if Markston were
to receive no research.
Because Markston's personnel also provide investment advisory
services to MBL Life, MAP-Equity Fund, and other advisory clients, it
may be difficult to quantify the relative benefits received by the Fund
and these other entities from research provided by brokers.
The Fund paid total brokerage commissions of $30,357 in 1995 (on
portfolio transactions amounting to $30,028,800), of which approximately
25% was paid to brokers that provided research, $33,328 in 1996 (on
portfolio transactions amounting to $36,324,947), of which approximately
20% was paid to brokers that provided research and $41,083.52 in 1997
(on portfolio transactions amounting to $58,080,205), of which
approximately 19.5% was paid to brokers that provided research.
In light of the fact that Markston also serves as investment
adviser to MBL Life and MAP-Equity Fund and to other advisory clients
that may or may not be registered investment companies, securities of
the same issuer may be included, from time to time, in the portfolios of
the Fund, MAP-Equity Fund, MBL Life, and these other entities where it
is consistent with their respective investment objectives. If these
entities desire to buy or sell the same portfolio security at about the
same time, combined purchases and sales are made and normally allocated
at the average price and as nearly as practicable on a pro-rata basis in
proportion to the amounts desired to be purchased or sold by each
entity. While it is conceivable that in certain instances this
procedure, "bunching", could adversely affect the price or number of
shares involved in the Fund's transaction, it is believed that the
procedure generally contributes to better overall execution of the
Fund's portfolio transactions.
PERSONAL INVESTING
Personal investing by "Access Persons" of the Fund is subject to
the Fund's Code of Ethics. Access Persons are permitted to trade for
their own accounts subject to certain restrictions. "Access Person"
means any director, officer, general partner, and "Investment Personnel"
of the Fund.
Trading in a security is not permitted generally if an Access
Person knows or should have known at the time of trade that such
security is being considered for purchase or sale by the Fund, or is
being purchased or sold by the Fund.
Generally, for Access Persons, personal investing is permitted if
trades are either not on Markston's list of securities held by or under
consideration for purchase by the Fund ("Prior Approval List"), or
exempt. Among the exemptions are: 1) de minimis purchases and sales,
2) trades in a large capitalization company (Standard & Poor's 100),
which transaction would provide a minimal potential for conflict, and 3)
preapproved (precleared) transactions. Preclearance will be granted
because the trade would be: (a) (i) very unlikely to be harmful to the
Fund, (ii) very unlikely to affect a highly institutional market, (iii)
clearly not related economically to the securities to be purchased, sold
or held by the Fund, (iv) outside a fifteen day window consisting of
seven days prior to trade date, the trade date, and seven days
thereafter; or (v) at a price which is not more favorable than that
obtained by the Fund. Access Persons must seek preclearance for trades
which appear on the Prior Approval List which are not otherwise exempt
as set forth in the Fund's Code of Ethics.
All Access Persons must report all trades subject to the Code of
Ethics on a quarterly basis. Access Persons who violate the Code of
Ethics are subject to sanctions as the Board of Directors deems
appropriate, and any profits realized on trades in violation of the Code
of Ethics may be disgorged to the Fund or to charity.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES
The purchase and redemption of Fund shares is described in the
Prospectus. Shares of the Fund are available for purchase by separate
accounts of any life insurance company.
Shares are purchased and redeemed at the Fund's net asset value
per share which is calculated by dividing the value of the Fund's
investment securities, plus cash and all other assets, less all
liabilities, by the number of Fund shares outstanding. The value of the
Fund's investment securities is determined as follows:
1. securities traded on a national securities exchange are
valued at the last sale price, on such securities exchange,
on the day the valuation is being computed;
2. securities traded on a national securities exchange for which
there is no sale on that day and securities traded over-the-
counter are valued at the last bid price; and
3. securities for which there are no readily available market
quotations and all other assets are valued at fair value by,
or under authority delegated by, the Fund's Board of
Directors. In determining the value of "restricted"
securities, suitable recognition will be given to such
factors as the amount of the discount at which the securities
were acquired, the extent of the Fund's right to require
registration under the Securities Act of 1933 and the
provisions as to payment of costs of such registration, the
nature of the market, if any, in which the securities are
traded, the amount of the floating supply of the securities,
and the prospects of the company issuing the securities.
Notwithstanding the foregoing, all debt securities having a
remaining maturity of 60 days or less are valued under the amortized
cost method of valuation. Under this method, securities are initially
valued at their acquisition date (or the date on which they first have a
maturity of 60 days or less), and their subsequent value is based on
such initial value, assuming a constant accretion of a discount or
amortization of a premium to maturity, regardless of any subsequent
minor fluctuations in the market value of the security.
TAXES
Shares of the Fund are offered only to separate accounts that fund
annuity contracts. See the prospectus related to the annuity contracts
for a discussion of the special taxation of insurance companies with
respect to the Separate Accounts and of the annuity contracts, and the
holders thereof.
The Fund intends to qualify and to continue to qualify as a
regulated investment company ("RIC") under the Internal Revenue Code of
1986, as amended (the "Code"). In order to qualify for that treatment,
the Fund must distribute to its shareholders for each taxable year at
least 90% of its investment company taxable income (consisting generally
of net investment income, net short-term capital gain, and net gains
from certain foreign currency transactions ("Distribution Requirement")
and must meet several additional requirements: (1) The Fund must derive
at least 90% of its gross income each taxable year from dividends,
interest, payments with respect to securities loans, and gains from the
sale or other disposition of securities or foreign currencies, or other
income (including gains from options, futures, or forward contracts)
derived with respect to its business of investing in securities or those
currencies ("Income Requirement"); (2) At the close of each quarter of
the Fund's taxable year, at least 50% of the value of its total assets
must be represented by cash and cash items, U.S. Government securities,
securities of other RIC's, and other securities that, with respect to
any one issuer, do not exceed 5% of the value of the Fund's total assets
and that do not represent more than 10% of the outstanding voting
securities of the issuer; and (3) At the close of each quarter of the
Fund's taxable year, not more than 25% of the value of its total assets
may be invested in securities (other than U.S. Government securities or
the securities of other RIC's) of any one issuer.
As noted in the Prospectus, the Fund must, and intends to, comply
with the diversification requirements imposed by Section 817(h) of the
Code and the regulations thereunder. These requirements, which are in
addition to the diversification requirements mentioned above, place
certain limitations on the proportion of the Fund's assets that may be
represented by any single investment (which includes all securities of
the same issuer). For these purposes, each U.S. Government agency or
instrumentality is treated as a separate issuer. For information
concerning the consequences of failure to meet the requirements of
Section 817(h), see the respective prospectuses for the Separate
Accounts.
The Fund will not be subject to the 4% Federal excise tax imposed
on RICs that do not distribute substantially all their income gains each
calendar year because that tax does not apply to a RIC whose only
shareholders are segregated asset accounts of life insurance companies
held in connection with variable annuity contracts and/or variable life
insurance policies.
Dividends and interest received by the Fund may be subject to
income, withholding, or other taxes imposed by foreign countries and
U.S. possessions that would reduce the yield on its securities. Tax
conventions between certain countries and the United States may reduce
or eliminate these foreign taxes, however, and foreign countries
generally do not impose taxes on capital gains in respect to investments
by foreign investors.
The foregoing is only a general summary of some of the important
Federal income tax considerations generally affecting the Fund and its
shareholders. No attempt is made to present a complete explanation of
the Federal tax treatment of the Fund's activities, and this discussion
and the discussion in the prospectuses and/or statements of additional
information for the Separate Accounts are not intended as a substitute
for careful tax planning. Accordingly, potential investors are urged to
consult their own tax advisors for more detailed information and for
information regarding any state, local, or foreign taxes applicable to
the annuity contracts and the holders thereof.
FINANCIAL STATEMENTS
The Fund incorporates by reference into this Statement of
Additional Information the Financial Statements, including the Schedule
of Portfolio Investments and Financial Highlights, and the Report of
Independent Accountants contained in its 1997 Annual Report to
Shareholders.
Copies of the Fund's financial statements are mailed to each
shareholder and Separate Account Participant semiannually. The Fund's
annual financial statements are audited by a firm of independent
accountants. The firm of Price Waterhouse LLP has been selected to
audit the Fund's financial statements for the current fiscal year. The
Fund will furnish, without charge, an additional copy of the Annual
Report upon request made to: Pension and Investment Products, MBL Life
Assurance Corporation, 520 Broad Street, Newark, New Jersey, 07102-3111,
Attn: MBL GROWTH FUND, INC., or by telephoning 1-800-435-3191.
ADDITIONAL INFORMATION
This Statement of Additional Information, and the Prospectus to
which it relates, omit some information contained in the registration
statement filed with the Securities and Exchange Commission, Washington,
D.C. Copies of such information may be obtained from the Commission
upon payment of the prescribed fees.
MBL GROWTH FUND, INC.
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS & EXHIBITS:
(a) Financial Statements filed pursuant to Item 23 of Part B:
The following Financial Statements are incorporated into Part B of
this Registration Statement by reference to the Annual Report to
Shareholders dated December 31, 1997, as filed with the Commission
pursuant to Rule 30b2-1 under the Investment Company Act of 1940
on February 23, 1998 (Accession No. 0001047469-98-007221).
Report of Independent Accountants
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations, Year Ended December 31, 1997
Statement of Changes in Net Assets, for Each of the Two
Years in the Period Ended December 31, 1997
Schedule of Portfolio Investments, December 31, 1997
Financial Highlights for Each of the Five Years
in the Period Ended December 31, 1997
(b) Exhibits *
(1) Articles of Incorporation, as amended, incorporated by
reference to earlier filing on November 2, 1982, SEC
File No. 2-80164, Form N-1.
(2) By-Laws, as amended, incorporated by reference to
earlier filing on April 28, 1989, SEC File No. 2-96199,
Exhibit (2) of Post-Effective Amendment #5 to Form N-
1A.
(3) Not applicable.
(4) Stock Certificate, incorporated by reference to earlier
filing on November 2, 1982, SEC File No. 2-80164, Form
N-1.
(5) (a)(i) Investment Advisory Agreement, dated April 25,
1983, between the Registrant and Markston
International, Inc. and amended December 31, 1987 and
October 16, 1991, between the Registrant and Markston
Investment Management as successor to Markston
International, Inc., incorporated by reference to
earlier filing on April 30, 1992, SEC File No. 2-96199,
Exhibit (5)(a) of Post-Effective Amendment # 8 to Form
N-1A.
(5) (a)(ii) Amendment to Investment Advisory Agreement,
dated February 9, 1995 and effective April 12, 1995,
incorporated by reference to earlier filing on April
27, 1995, SEC File No 2-96199, Exhibit (5)(a)(ii) of
Post-Effective Amendment #11 to Form N-1A.
(5) (b) Service Agreement, dated April 29, 1994, among the
Registrant, Markston Investment Management, and MBL
Life Assurance Corporation, incorporated by reference
to earlier filing on April 29, 1994, SEC File No 2-
96199, Exhibit (5)(b) of Post-Effective Amendment #10
to Form N-1A.
(6) Distributor's Agreement, dated April 29, 1994, between
the Registrant and First Priority Investment
Corporation, incorporated by reference to earlier
filing on April 29, 1994, SEC File No 2-96199, Exhibit
(5)(b) of Post-Effective Amendment #10 to Form N-1A.
(7) Not applicable.
(8) Custodian Fee Schedule, revised December 18, 1992, to
the Custodian Agreement between Registrant and State
Street Bank and Trust Company dated March 4, 1988,
incorporated by reference to earlier filing on April
29, 1988, SEC File No. 2-96199, Exhibit (8) of Post-
Effective Amendment #4 to Form N-1A. Revision dated
December 18, 1992, incorporated by reference to earlier
filing on April 30, 1993, SEC File No. 2-96199, Exhibit
(8) of Post-Effective Amendment #9 to Form N-1A.
(9) Fee Information for Services as Plan, Transfer, and
Dividend Disbursing Agent to the Transfer Agent
Agreement between Registrant and State Street Bank and
Trust Company dated March 4, 1988, as amended February
3, 1992, incorporated by reference to earlier filing on
April 30, 1992, SEC File No. 2-96199, Exhibit (9) of
Post-Effective Amendment # 8 to Form N-1A.
(10) Opinion Letter of Counsel, incorporated by reference to
earlier filing on December 10, 1982, SEC File No. 2-
80164, Pre-Effective Amendment #1 to Form N-1.
(11) Consent of Price Waterhouse LLP, Independent
Accountants.
(12) Not applicable.
(13) Investment Letter of Mutual Benefit Life, incorporated
by reference to earlier filing on December 10, 1982,
SEC File No. 2-80164, Pre-Effective Amendment #1 to
Form N-1.
(14) Not applicable.
(15) Not applicable.
(16) Price Make-up Sheet. **
(27) Financial Data Schedule.
_____________________________________________________________
* Page numbers inserted in manually signed copy only.
** Incorporated by reference to the 1997 Annual Report
to Shareholders.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
REGISTRANT.
Shares of the Registrant are sold to and owned by MBL
Variable Contract Account-2 and MBL Variable Contract
Account-3, sponsored by MBL Life Assurance Corporation ("MBL
Life"), to fund benefits under certain variable annuity
contracts issued by it.
MBL Life is a stock life insurance company organized under
the laws of New Jersey. The voting stock of MBL Life was
transferred to a Stock Trust established by the Plan having
the Commissioner of Banking and Insurance of the State of New
Jersey, as Trustee. The Trust will terminate no later than
December 31, 1999.
Pursuant to a settlement agreement, an Order was issued on
January 9, 1997 ending all Plan-related litigation, and
awarding 30% of the value of the Trust at its termination to
eligible MBL Life policyholders, and 70% to the Class Four
Creditors (as defined in the Plan) of Mutual Benefit Life.
As of April 1, 1998, those persons under common control with
MBL Life are as follows:
MBL LIFE ASSURANCE CORPORATION (NJ)
Hawaiian Macadamia Company, Inc. (HI)
MBLLAC Holding Corporation (NJ)
First Priority Investment Corporation (NJ)
Metro IRB, Inc. (NJ)
Fisher Island Corporation (NJ)
Pelican Apartment Properties, Inc. (NJ)
Metro JV, Inc. (NJ)
Mutual Benefit Marketing Group Inc. (NJ)
MAP Advisors, Inc. (NJ)
MBL Sales Corporation (NJ)
Markston Investment Management (Partnership)
EHC Companies, Inc. (WA)
Infotech Corp.(WA)
Extraspace Inc. (WA)
EDC, Inc.(WA)
NWD Investment Company (WA)
WD Holdings, Inc. (WA)
International Corporate Marketing Group (40%)(CT)
Tong Yang Benefit Life Insurance Company (2%) (Korea)
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
(1) (2)
Title of Class Number of Record Holders
Common Stock As of April 1, 1998: 4
ITEM 27. INDEMNIFICATION.
(a) Insurance Policies:
The Registrant maintains investment errors and omissions
insurance covering those directors who are not interested
persons of the Registrant. This policy, subject to the terms
and conditions of the policy, protects those directors from
legal liabilities and expenses which they may incur as a result
of claims for breach of duty, negligent acts, errors,
omissions, misstatements or misleading statements committed or
alleged to have been committed by them in their capacity as
directors of the Registrant. The policy, subject to the terms
and conditions of the policy, would also insure the Registrant.
The policy excludes expenses and liabilities based upon, among
other things, any claim alleging dishonesty or fraudulent acts
or omissions, or any criminal or malicious acts or omissions.
The limits on the policy are $3,000,000 each wrongful act and
$3,000,000 aggregate. Notwithstanding any agreement or
document to the contrary, the Registrant undertakes not to
insure any director for any liability, the insurance of which
has been determined to be prohibited under the federal
securities laws.
The Registrant is the joint owner of the policy with MAP-Equity
Fund, MAP-Government Fund, Inc., and MBL Variable Contract
Account-7, and the premiums are divided based on the proportion
of each entity's net assets to the total net assets of all the
joint insureds.
The Registrant also maintains an Investment Companies Blanket
Bond covering the Registrant against larceny and embezzlement
committed by any director, officer, or employee of the
Registrant or its adviser who may have access to securities or
funds of the Registrant.
(b) Maryland Law and By-Law Provision:
Set forth below is a composite summary of the general effect of
applicable provisions of Maryland law and the Registrant's By-
Laws regarding indemnification of and advancement of legal
expenses to the Registrant's officers and directors
(collectively, "Indemnitees").
The Registrant shall indemnify any Indemnitee who is or is
threatened to be made, a party to any legal proceeding by
reason of his service to the Registrant, if the Indemnitee (1)
acted in good faith; (2) reasonably believed (a) that his
conduct was in the Registrant's best interest, or (b), if the
conduct was not in an official capacity, that the conduct was
at least not opposed to the best interests of the Registrant;
(3) in the case of any criminal proceedings, had no reasonable
cause to believe that the conduct was unlawful; (4) in any
proceeding by or in the right of the Registrant, is not
adjudged to be liable to the Registrant; and (5) in any
proceeding charging improper personal benefit, is not adjudged
to be liable on the basis that personal benefit was improperly
received. Such indemnification shall be made against judgments,
penalties, fines, settlements and reasonable expenses actually
incurred by the Indemnitee, except that in the case of an
action by or in the right of the Registrant, such
indemnification shall be limited to reasonable expenses only.
The determination whether the Indemnitee has met the foregoing
standards shall be made (1) by a majority vote of a quorum of
the Board of Directors consisting of directors not, at the
time, parties to the proceeding; (2) if such a quorum cannot be
obtained, by a majority vote of a committee of the Board of
Directors consisting solely of two or more directors (a) not at
the time parties to the proceeding and (b) duly designated to
act in the matter by a majority vote of the entire Board of
Directors (including any parties to the proceeding); (3) by
special legal counsel selected by a majority vote of (a) a
quorum of the Board of Directors consisting of directors not,
at the time, parties to the proceeding, (b) a committee of the
Board selected as set forth in (2) above, or (c) if the
requisite quorum of the Board cannot be obtained and the
committee cannot be established, the entire Board, in which
directors who are parties may participate; or (4) by majority
vote of all the shares of the capital stock of the Registrant
at the time outstanding and entitled to vote, except that
shares held by any Indemnitees who are parties to the
proceeding may not be voted.
In advance of the final disposition of any proceeding, after a
determination as provided in the preceding paragraph that the
facts then known do not show that the Indemnitee has not met
the standards of indemnification set forth above, the
Registrant shall pay or reimburse reasonable expenses incurred
by an Indemnitee party to a proceeding upon receipt of (1) a
written affirmation by the Indemnitee of his good faith belief
that he has met the standards for indemnification and (2) a
written undertaking, in the form of an unsecured unlimited
general obligation by or on behalf of the Indemnitee, to repay
the amount advanced, if it is ultimately determined that he did
not meet such standards.
The Registrant may also, in its discretion, indemnify or
advance expenses to any officer who is not a director, or any
other agent or employee of the Registrant, in which case the
foregoing standards, procedures or limitations may or may not
be observed.
Nevertheless, notwithstanding any of the foregoing, except as
provided by the statutory provisions referred to below, no
indemnification shall be made to any director or officer
against any liability to the Registrant or its security holders
to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless
disregard of duties involved in the conduct of his or her
office ("Disabling Conduct"). The means for determining
whether indemnification shall be (i) a final decision on the
merits by a court or other body before whom the proceeding was
brought that the Indemnitee was not liable by reason of
Disabling Conduct, or (ii) in the absence of such a decision a
reasonable determination, based upon a review of the facts,
that the Indemnitee was not liable by reason of Disabling
Conduct, by (a) the vote of a majority of a quorum of Directors
who are neither "interested persons" of the Registrant nor
parties to the proceeding ("Disinterested Non-Party
Directors"), or (b) an independent legal counsel in a written
opinion. Furthermore, no advancement of monies for the defense
of a proceeding brought against a director or officer of the
Registrant shall be made unless (1) such advance is limited to
attorney's fees or other expenses incurred or to be incurred in
defending the proceeding, (2) an undertaking is furnished by or
on behalf of the Indemnitee to repay the advance unless it is
ultimately determined that he or she is entitled to
indemnification, and (3) the Indemnitee complies with at least
one of the following conditions: (a) the Indemnitee shall
provide a security for his undertaking, (b) the Registrant
shall be insured against losses arising by reason of any lawful
advances, or (c) a majority of a quorum of the Disinterested
Non-Party Directors, or an independent legal counsel in a
written opinion, shall determine, based on a review of readily
available facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the Indemnitee ultimately will
be found entitled to indemnification.
The applicable Maryland statute further provides that an
Indemnitee shall be indemnified (1) against the reasonable
expenses of defending any proceeding which he is wholly
successful in defending, and (2) to such further extent as a
court may deem fair and reasonable under the circumstances,
provided that, in the latter case, the indemnification shall be
limited to expenses if the proceeding is by or in the right of
the Registrant, or if the Indemnitee has been adjudged liable
on the basis of improper receipt of personal benefit.
(c) Distributor's Agreement:
Under the Distributor's Agreement between the Registrant and
First Priority Investment Corporation ("First Priority"), First
Priority agrees to indemnify the Registrant and its officers
and directors and controlling persons from all liabilities and
expenses arising out of certain actual or alleged material
misstatements or other mistakes, negligence or willful
misconduct of First Priority, or any of its agents or employees
in connection with sales of the Registrant' shares.
(d) Undertaking:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act, and will be governed by the final
adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
See "Management" in the Prospectus constituting Part A of this
Registration Statement and "Investment Advisory and Other
Services" in the Statement of Additional Information constituting
Part B, for a description of Markston Investment Management
("Markston") (Registrant's investment adviser) and its business.
The Members of the Management Committee of the Investment Adviser
are as follows:
Other Substantial Business,
Profession, Vocation or
Employment within Past Two
Name Years
Kathleen M. Koerber Executive Vice President -
MBL Life Assurance Insurance Operations and Chief
Corporation ("MBL Life") Operating Officer, MBL Life;
520 Broad Street Director, First Priority.
Newark, NJ 07102
Robert T. Budwick Executive Vice President -
MBL Life Chief Investment Officer, MBL
520 Broad Street Life; Director and Chief
Newark, NJ 07102 Investment Officer, First
Priority.
Michael J. Mullarkey Managing Partner, Markston;
Markston International, Inc. Director and Executive Vice
1 North Lexington Ave. President, Markston
White Plains, New York 10601 International, Inc.
John R. Stone Managing Partner, Markston;
Markston International, Inc. Director and President, Markston
1 North Lexington Ave. International, Inc.
White Plains, New York 10601
William G. Clark Senior Vice President, Pension
MBL Life and Investment Products, MBL
520 Broad Street Life; President and Director,
Newark, NJ 07102 First Priority.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) First Priority, Registrant's exclusive distributor, also serves as
principal underwriter for the following registered investment
companies: MAP-Equity Fund, MAP-Government Fund, Inc., and MBL
Variable Contract Account-7; and for the following unit investment
trusts: MBL Variable Contract Account-2 and MBL Variable Contract
Account-3. First Priority also serves as investment adviser for
MAP-Government Fund, Inc. and MBL Variable Contract Account-7.
(b) Information regarding First Priority's officers and directors:
NAME AND PRINCIPAL POSITIONS WITH POSITION WITH
BUSINESS ADDRESS* FIRST PRIORITY REGISTRANT
William G. Clark Director and President Director and
Executive Vice
President
Robert T. Budwick Director and Chief ----
Investment Officer
Frank D. Casciano Director, Vice President ----
and General Counsel
Kathleen M. Koerber Director Director, and
President
Alan J. Bowers Director ----
Albert W. Leier Director, Vice Vice President
President and and Treasurer
Treasurer
Hal R. Rose Senior Vice President ----
Judith C. Keilp Vice President and Vice President
Secretary and Secretary
Richard C. Allen Vice President ----
Christopher S. Auda Vice President ----
James Switlyk Second Vice President ----
(c) None
_______________________________
* All the individuals named above maintain offices at
520 Broad Street, Newark, New Jersey 07102.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of
1940 and the Rules thereunder are maintained at the offices
of Registrant and Registrant's Custodian, State Street Bank
and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, or the Registrant's Distributor, First Priority
Investment Corporation, 520 Broad Street, Newark, New Jersey
07102.
ITEM 31. MANAGEMENT SERVICES.
Other than as set forth under the caption "Management" in the
Prospectus constituting Part A of this Registration Statement
and under the caption "Investment Advisory and Other
Services" in the Statement of Additional Information
constituting Part B, Registrant is not a party to any
management-related service contract.
ITEM 32. UNDERTAKINGS.
The Registrant undertakes to furnish to each person to whom a
prospectus is delivered, without charge, a copy of the Annual
Report to Shareholders, upon request made to: First Priority
Investment Corporation, 520 Broad Street, Newark, New Jersey
07102, ATTN: MBL GROWTH FUND, INC., or by telephoning 1-800-
435-3191.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets
the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment to the Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized, in the
City of Newark, and State of New Jersey, on the 28th day of April, 1998.
MBL GROWTH FUND, INC.
(Registrant)
By: KATHLEEN M. KOERBER
Kathleen M. Koerber, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the date
indicated.
Signature Title Date
KATHLEEN M. KOERBER President and April 28, 1998
(Kathleen M. Koerber) Director (Principal
Executive Officer)
WILLIAM G. CLARK Executive Vice April 28, 1998
(William G. Clark) President & Director
HORACE J. DEPODWIN Director April 28, 1998
(Horace J. DePodwin)
HERBERT M. GROCE, JR. Director April 28, 1998
(Herbert M. Groce, Jr.)
JEROME M. SCHECKMAN Director April 28, 1998
(Jerome M. Scheckman)
ALBERT W. LEIER Vice President April 28, 1998
(Albert W. Leier) and Treasurer
(Principal Financial
and Accounting Officer)
MBL GROWTH FUND, INC.
EXHIBIT INDEX
Exhibit
(11) - Report and Consent of Price Waterhouse
LLP, Independent Accountants.
(27) - Financial Data Schedule.
Exhibit (11)
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
and Statement of Additional Information constituting parts of this Post-
Effective Amendment No. 14 to the registration statement on Form N-1A
(the "Registration Statement") of our report dated February 9, 1998,
relating to the financial statements and financial highlights appearing
in the December 31, 1997 Annual Report to Shareholders of the MBL Growth
Fund, Inc., which are also incorporated by reference into the
Registration Statement. We also consent to the references to us under
the heading "Financial Highlights" in the Prospectus and under the
heading "Financial Statements" in the Statement of Additional
Information.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
April 27, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE ANNUAL REPORT OF MBL GROWTH FUND, INC. DATED DECEMBER 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000708952
<NAME> MBL GROWTH FUND, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 44157
<INVESTMENTS-AT-VALUE> 58844
<RECEIVABLES> 56
<ASSETS-OTHER> 50
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 58951
<PAYABLE-FOR-SECURITIES> 1413
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 116
<TOTAL-LIABILITIES> 1529
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36639
<SHARES-COMMON-STOCK> 4719
<SHARES-COMMON-PRIOR> 4307
<ACCUMULATED-NII-CURRENT> 43
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1333
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14688
<NET-ASSETS> 57421
<DIVIDEND-INCOME> 643
<INTEREST-INCOME> 388
<OTHER-INCOME> 0
<EXPENSES-NET> 482
<NET-INVESTMENT-INCOME> 549
<REALIZED-GAINS-CURRENT> 8154
<APPREC-INCREASE-CURRENT> 5262
<NET-CHANGE-FROM-OPS> 13964
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 541
<DISTRIBUTIONS-OF-GAINS> 6913
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 41
<NUMBER-OF-SHARES-REDEEMED> 247
<SHARES-REINVESTED> 619
<NET-CHANGE-IN-ASSETS> 11430
<ACCUMULATED-NII-PRIOR> 35
<ACCUMULATED-GAINS-PRIOR> 92
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 317
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 482
<AVERAGE-NET-ASSETS> 52255
<PER-SHARE-NAV-BEGIN> 10.68
<PER-SHARE-NII> 0.13
<PER-SHARE-GAIN-APPREC> 3.16
<PER-SHARE-DIVIDEND> 0.13
<PER-SHARE-DISTRIBUTIONS> 1.67
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.17
<EXPENSE-RATIO> 0.92
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
