<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1996
1933 Act File No. 2-25383
1940 Act File No. 811-1383
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. 44 / X /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 32 / X /
(Check appropriate box or boxes)
BERGER ONE HUNDRED AND ONE FUND, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
210 University Boulevard, Suite 900, Denver, Colorado 80206
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (303) 329-0200
--------------------------
Rodney L. Linafelter, 210 University Boulevard, Suite 900, Denver, CO 80206
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective: (check appropriate box)
/ / immediately upon filing pursuant to paragraph (b)
/x/ on November 28, 1996, pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / on (date) pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/ / on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
Registrant has registered an indefinite number of shares of capital stock under
the Securities Act of 1933 pursuant to Rule 24f-2(a) and intends to file its
Rule 24f-2 Notice on or about November 15, 1996, for the fiscal year ended
September 30, 1996.
<PAGE>
CALCULATION OF REGISTRATION FEES UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TITLE OF AMOUNT PROPOSED PROPOSED AMOUNT OF
SECURITIES BEING MAXIMUM MAXIMUM REGISTRATION
BEING REGISTERED OFFERING AGGREGATE FEE
REGISTERED PRICE PER OFFERING PRICE
UNIT
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Shares of Indefinite (1) N/A N/A N/A
Capital
Stock, par
value $.01
- ----------------------------------------------------------------------------------------
Shares of 5,531,864 $14.24(2) $78,773,743(2)(3) $100.00(3)
Capital
Stock, par
value $.01
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
(1) Registrant continues its election to register an indefinite number of
shares of Common Stock pursuant to Rule 24f-2 under the Investment Company Act
of 1940.
(2) Estimated pursuant to Rule 457(d) of the Securities Act of 1933, based on
net asset value per share on October 23, 1996.
(3) Calculation of the maximum aggregate offering price is made pursuant to
Rule 24e-2 of the Investment Company Act of 1940. The total amount of
securities redeemed during the fiscal year ended September 30, 1996, was
9,195,938 shares. No redeemed securities have been used for reductions pursuant
to paragraph (a) of Rule 24e-2 in any previous filing during the current fiscal
year. The total amount of redeemed securities used for reductions pursuant to
paragraph (c) of Rule 24f-2 was 4,137,248 shares. The amount of redeemed
securities being used for reduction of the registration fee in this Amendment is
5,508,690. While no fee is required for the 5,508,690 shares, the Registrant
has elected to register, for the minimum fee of $100, an additional $330,000 of
shares (approximately 23,174 shares at $14.24 per share).
<PAGE>
BERGER ONE HUNDRED AND ONE FUND, INC.
CAPITAL STOCK
($.01 Par Value)
Cross-Reference Sheet Pursuant to Rule 481
<TABLE>
<CAPTION>
ITEM NO. AND CAPTION IN FORM N-1A NUMBER OF SECTION
- ------------------------------------------------------------------------------
<S> <C>
A. PROSPECTUS
------------
1. Cover Page Cover Page
2. Synopsis Section 1
3. Condensed Financial Information Section 2
4. General Description of Registrant Sections 3, 4, 5 and 16
5. Management of the Fund Sections 6, 7 and 8
5A. Management's Discussion of Fund Annual Report
Performance
6. Capital Stock and Other Securities Sections 15, 16 and 17
7. Purchase of Securities Being Offered Sections 8, 9, 10, 11, 13 and 14
8. Redemption or Repurchase Section 12
9. Pending Legal Proceedings Not Applicable
B. STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Section 14
13. Investment Objectives and Policies Sections 1 and 2
14. Management of the Fund Section 3
15. Control Persons and Principal Sections 3 and 14
Holders of Securities
16. Investment Advisory and Other Services Sections 3, 4, 5 and 14
17. Brokerage Allocation and Other Practices Sections 1 and 6
18. Capital Stock and Other Securities Section 14
19. Purchase, Redemption and Pricing of Securities Sections 7, 8,
Being Offered 10, 11 and 12
20. Tax Status Section 9
21. Underwriters Not Applicable
22. Calculations of Performance Data Section 13
23. Financial Statements Financial Statements
</TABLE>
<PAGE>
PROSPECTUS
The One Hundred Fund, Inc., doing business as Berger One Hundred Fund, Inc.
("Berger 100 Fund"), Berger One Hundred and One Fund, Inc., doing business as
Berger Growth and Income Fund, Inc. ("Berger Growth and Income Fund"), Berger
Small Company Growth Fund and Berger New Generation Fund (together, the "Funds")
are "no-load" mutual funds. This Prospectus describes each of these Funds which
have many features in common but have different investment objectives and
different investment emphases.
BERGER 100 FUND-Registered Trademark- - The investment objective of the
Berger 100 Fund is long-term capital appreciation. The Berger 100 Fund seeks to
achieve this objective by investing primarily in common stocks of established
companies which the Fund's advisor believes offer favorable growth prospects.
BERGER GROWTH AND INCOME FUND - The primary investment objective of the
Berger Growth and Income Fund is capital appreciation. A secondary objective is
to provide a moderate level of current income. The Berger Growth and Income
Fund seeks to achieve these objectives by investing primarily in common stocks
and other securities, such as convertible securities or preferred stocks, which
the Fund's advisor believes offer favorable growth prospects and are expected to
also provide current income.
BERGER SMALL COMPANY GROWTH FUND-Registered Trademark- - The investment
objective of the Berger Small Company Growth Fund is capital appreciation. The
Berger Small Company Growth Fund seeks to achieve this objective by investing
primarily in equity securities (including common and preferred stocks,
convertible debt securities and other securities having equity features) of
small growth companies with market capitalization of less than $1 billion at the
time of initial purchase.
BERGER NEW GENERATION FUND - The investment objective of the Berger New
Generation Fund is capital appreciation. The Fund pursues this objective by
investing primarily in equity securities (including common and preferred stocks,
convertible debt securities and other securities having equity features) of
companies which the Fund's advisor believes have the potential for significant
growth. In particular, the Fund's advisor seeks to identify companies which
develop, manufacture, sell or provide new or innovative products, services or
methods of doing business that it believes have the potential to change the
direction or dynamics of the industries in which they operate or to
significantly influence the way businesses or consumers conduct their affairs.
This Prospectus concisely sets forth information about each of the
Funds that a prospective investor should consider before investing. Investors
are advised to retain this Prospectus for future reference. Additional
information about the Funds has been filed with the Securities and Exchange
Commission. A copy of the Statement of Additional Information, dated November
28, 1996, is incorporated by reference into this Prospectus in its entirety and
is available upon request without charge by writing to the Funds at P.O. Box
5005, Denver, CO 80217, or by calling 1-800-333-1001. The Securities and
Exchange Commission maintains an Internet Web site (http://www.sec.gov) that
contains the Statement of Additional Information, material incorporated by
reference and other information regarding the Funds.
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.
DATED NOVEMBER 28, 1996
<PAGE>
Table of Contents
Section Page
- ------- ----
1. Fee Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Condensed Financial Information. . . . . . . . . . . . . . . . . . . . . 2
3. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. Investment Objectives and Policies and Risk Factors. . . . . . . . . . . 6
5. Portfolio Turnover . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6. Management and Investment Advice . . . . . . . . . . . . . . . . . . . . 12
7. Expenses of the Funds. . . . . . . . . . . . . . . . . . . . . . . . . . 14
8. Policies of the Funds to Promote Sales of Fund Shares. . . . . . . . . . 15
9. How to Purchase Shares in the Funds. . . . . . . . . . . . . . . . . . . 16
10. How the Net Asset Value Is Determined . . . . . . . . . . . . . . . . . 18
11. Open Account System and Share Certificates. . . . . . . . . . . . . . . 18
12. How to Redeem or Sell Fund Shares . . . . . . . . . . . . . . . . . . . 18
13. Exchange Privilege and Systematic Withdrawal Plan . . . . . . . . . . . 21
14. Tax-Sheltered Retirement Plans. . . . . . . . . . . . . . . . . . . . . 22
15. Income Dividends, Capital Gains Distributions and Tax Treatment . . . . 23
16. Additional Information. . . . . . . . . . . . . . . . . . . . . . . . . 24
17. Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
<PAGE>
1. FEE TABLES
SHAREHOLDER TRANSACTION EXPENSES (APPLICABLE TO ALL FOUR BERGER FUNDS)
Maximum Sales Load Imposed on Purchases 0%
Maximum Sales Load Imposed on Reinvested Dividends 0%
Deferred Sales Load 0%
Redemption Fees 0%*
Exchange Fee 0%
* There will be a $10 wire service charge if redemption proceeds are
requested by wire.
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
<TABLE>
<CAPTION>
Investment 12b-1 Fee Other Total Fund
Advisory Expenses* Operating
Fee Expenses
<S> <C> <C> <C> <C>
Berger 100 Fund .75% .25% .42% 1.42%
Berger Growth and .75% .25% .56% 1.56%
Income Fund
Berger Small .90% .25% .53% 1.68%
Company Growth Fund
Berger New .71%** .25% .94% 1.90%**
Generation Fund
</TABLE>
* Other Expenses primarily include transfer agency fees, shareholder report
expenses, registration fees and custodian fees. Other Expenses for the
Berger New Generation Fund are based on estimated expenses for the Fund's
first full year of operations.
** After fee waiver. The Fund's investment advisor has voluntarily agreed to
waive its advisory fee to the extent that the Fund's normal operating
expenses in any fiscal year, including the management fee and the 12b-1
fee, but excluding brokerage commissions, interest, taxes and extraordinary
expenses, exceed 1.90% of the Fund's average daily net assets for that
fiscal year. Absent the waiver, the Fund's Investment Advisory Fee would
be 0.90% and Total Fund Operating Expenses would be estimated to be 2.09%.
EXAMPLES
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return, and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Berger 100 Fund $ 14 $ 45 $ 78 $170
-1-
<PAGE>
Berger Growth and $ 16 $ 49 $ 85 $186
Income Fund
Berger Small $ 17 $ 53 $ 91 $199
Company Growth Fund
Berger New $ 19 $ 60 $103 $222
Generation Fund
</TABLE>
THE EXPENSES SET FORTH IN THE PRECEDING TABLES SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. THE ASSUMED 5% ANNUAL RETURN IS
HYPOTHETICAL AND SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
ANNUAL RETURNS, WHICH MAY BE GREATER OR LESS THAN THE ASSUMED AMOUNT.
As a result of the 12b-1 fees paid by the Funds, over time long-term
shareholders in the Funds may pay more than the economic equivalent of the
maximum front end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc. The investment advisory fees are higher
than those paid by most other mutual funds.
The purpose of the preceding tables is to assist the investor in
understanding the various costs and expenses that an investor in any of the
Funds will bear directly or indirectly. The Funds' expenses are described in
greater detail under "Management and Investment Advice", "Expenses of the
Funds", and "Policies of the Funds to Promote Sales of Fund Shares".
2. CONDENSED FINANCIAL INFORMATION
On the following pages are tables setting forth certain financial
highlights of each Fund. The information provided for the years ended September
30, 1995 and 1996, has been audited by Price Waterhouse LLP, whose report
thereon is incorporated by reference from the Funds' 1996 Annual Reports into
the Statement of Additional Information. The information provided in the tables
for fiscal years ending September 30, 1994, and before was audited by other
independent accountants. The most recent Annual Reports for the Funds,
including additional performance information, may be obtained upon request and
without charge by calling the Funds at 1-800-333-1001.
-2-
<PAGE>
BERGER ONE HUNDRED FUND
Financial Highlights
<TABLE>
<CAPTION>
For a Share Outstanding Throughout the Year Ended September 30,
----------------------------------------------------------------------------------------------------
1996** 1995** 1994** 1993** 1992** 1991** 1990 1989 1988 1987
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of Period*. . . . . $18.89 $15.96 $16.54 $11.73 $11.13 $6.67 $8.93 $6.14 $8.21 $6.72
----- ----- ----- ----- ----- ---- ---- ---- ---- ----
Income From
Investment
Operations:
Net Investment
Income (Loss)* (.08) (.04) (.12) (.14) (.09) (.10) (.02) (.05) (.01) (.03)
Net Realized and
Unrealized
Gains
(Losses) on
Securities* . . 1.76 2.97 (.46) 4.95 .86 5.15 (1.34) 2.92 (.48) 1.91
---- ---- --- ---- --- ---- ---- ---- --- ----
Total From Investment
Operations* . . . . 1.68 2.93 (.58) 4.81 .77 5.05 (1.36) 2.87 (.49) 1.88
---- ---- --- ---- --- ---- ---- ---- --- ----
Less Distributions:
Dividends (from
net
investment
income)*. . . . .00 .00 .00 .00 .00 .00 .00 .00 .00 .00
Distributions
(from capital
gains)* . . . . (.93) .00 .00 .00 (.17) (.59) (.90) (.08) (1.58) (.39)
--- --- --- --- --- --- --- --- ---- ---
Total Distributions*. (.93) .00 .00 .00 (.17) (.59) (.90) (.08) (1.58) (.39)
--- --- --- --- --- --- --- --- ---- ---
Net Asset Value, End
of Period*. . . . . $19.64 $18.89 $15.96 $16.54 $11.73 $11.13 $6.67 $8.93 $6.14 $8.21
----- ----- ----- ----- ----- ----- ---- ---- ---- ----
----- ----- ----- ----- ----- ----- ---- ---- ---- ----
Total Return. . . . . 9.36% 18.36%+ (3.51)%+ 41.01%+ 6.97% 83.02% (16.84)% 47.31% (4.78)% 29.36%
---- ----- ---- ----- ---- ----- ----- ----- ---- -----
---- ----- ---- ----- ---- ----- ----- ----- ---- -----
Ratios/Supplemental
Data:
Net Assets, End of
Period
(in thousands). . . $2,012,706 $2,205,679 $2,228,743 $1,407,849 $384,089 $76,847 $12,941 $14,008 $10,601 $11,694
Ratio of Expenses to
Average Net Assets. 1.42%# 1.48%+# 1.70%+ 1.69%+ 1.89% 2.24% 2.13% 1.62% 1.72% 1.61%
Ratio of Net Income
(Loss) to
Average Net
Assets. . . . . . . (.43)% (.28)%+ (.74)%+ (1.00)%+ (.75)% (1.06)% (.71)% (.54)% (.57)% (.27)%
Portfolio Turnover
Rate. . . . . . . . 122% 114% 64% 74% 51% 78% 145% 83% 166% 106%
Average
Commission Rate . . $.0600 -- -- -- -- -- -- -- -- --
</TABLE>
* Per share amounts for periods 1987 through 1989 have been adjusted to
reflect the 3 for 1 split which was effective December 15, 1989.
** Per share calculations for the period were based on average shares
outstanding.
+ Ratios are net of a voluntary waiver made under the Fund's former 12b-1
Plan, which reduced 12b-1 payments from 1.0% to .75% during the period
February 1, 1993, to October 13, 1994. Effective October 14, 1994, a new
12b-1 Plan was adopted with shareholder approval that reduces payments
under the Plan to .25% per year. Had the waiver not been made, the Ratio
of Expenses to Average Net Assets would have been 1.49% in 1995, 1.95% in
1994 and 1.88% in 1993. Absent the waiver, the Ratio of Net Income
(Loss) to Average Net Assets would have been (.29)% in 1995, (.99)% in 1994
and (1.19)% in 1993. The Total Return would have remained 18.36% in 1995,
and would have been (3.63)% in 1994 and 40.84% in 1993.
# Ratio reflects total expenses, including fees paid indirectly with
brokerage commissions and fees offset by earnings credits, for 1995 and
1996 only.
-3-
<PAGE>
BERGER GROWTH AND INCOME FUND
Financial Highlights
<TABLE>
<CAPTION>
For a Share Outstanding Throughout the Year Ended September 30,
------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period* . . . . . . . . . $12.89 $11.48 $11.27 $8.96 $9.20 $5.88 $7.08 $6.46 $8.61 $8.93
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
Income From Investment
Operations:
Net Investment Income
(Loss)* . . . . . . .20 .16 .12 .08 .13 .18 .17 .32 .23 .33
Net Realized and
Unrealized Gains
(Losses) on
Securities* 1.17 1.43 .21 2.29 .54 (3.25) (1.23) .74 1.40 1.15
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
Total From Investment
Operations*. . . . . . . . 1.37 1.59 .33 2.37 .67 3.43 (1.06) 1.06 (1.17) 1.48
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
Less Distributions:
Dividends (from net
investment
income)*. . . . . . . . (.20) (.18) (.12) (.06) (.17) (.11) (.14) (.44) (.30) (.30)
Distributions (from
capital gains)* . . . . .00 .00 .00 .00 (.74) .00 .00 .00 (.68) (1.50)
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
Total Distributions* . . . (.20) (.18) (.12) (.06) (.91) (.11) (.14) (.44) (.98) (1.80)
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
Net Asset Value, End of
Period* . . . . . . . . . $14.06 $12.89 $11.48 $11.27 $8.96 $9.20 $5.88 $7.08 $6.46 $8.61
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
Total Return . . . . . . 10.66% 14.05%+ 2.91%+ 26.48%+ 7.96% 58.76% (15.18)% 17.33% (12.72)% 19.89%
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
------ ------ ------ ----- ----- ----- ----- ----- ----- -----
Ratios/Supplemental Data:
Net Assets, End of Period
(in thousands). . . . . $351,538 $354,396 $391,570 $112,932 $32,942 $4,081 $4,166 $1,845 $2,161 $2,798
Ratio of Expenses to
Average Net
Assets . . . . . . . . 1.56%# 1.63%+^ 1.81%+ 2.10%+ 2.56% 2.66% 2.48% 2.00% 2.00% 1.79%
Ratio of Net Income
(Loss) to
Average Net
Assets . . . . . . . . 1.39% 1.33%+ 1.19%+ 1.05%+ 1.05% 1.99% 1.74% 5.09% 3.48% 4.04%
Portfolio Turnover Rate. . 112% 85% 23% 62% 42% 143% 139% 132% 159% 241%
Average Commission Rate. . $.0600 -- -- -- -- -- -- -- -- --
</TABLE>
* Per share amounts for periods 1987 through 1989 have been adjusted to
reflect the 2 for 1 split which was effective December 15, 1989.
+ Ratios are net of a voluntary waiver made under the Fund's former 12b-1
Plan, which reduced 12b-1 payments from 1.0% to .75% during the period
February 1, 1993, to October 13, 1994. Effective October 14, 1994, a new
12b-1 Plan was adopted with shareholder approval that reduces payments
under the Plan to .25% per year. Had the waiver not been made, the Ratio
of Expenses to Average Net Assets would have been 1.64% in 1995, 2.06% in
1994 and 2.29% in 1993. Absent the waiver, the Ratio of Net Income
(Loss) to Average Net Assets would have been 1.32% in 1995, .94% in 1994
and .86% in 1993. The Total Return would have remained 14.05% in 1995, and
would have been 2.73% in 1994 and 26.34% in 1993.
# Ratio reflects total expenses, including fees paid indirectly with
brokerage commissions and fees offset by earnings credits, for
1996 only.
^ Ratio reflects total expenses, including fees offset by earnings
credits, for 1995 only.
-4-
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
Financial Highlights
<TABLE>
<CAPTION>
For a Share Outstanding Throughout the
Year Ended September 30,
--------------------------------------
1996 1995 1994*
---- ---- -----
<S> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . $3.61 $2.74 $2.50
----- ----- -----
Income From Investment Operations:
Net Investment Income (Loss) . . . . . (.03) (.02) .00
----- ----- -----
Net Realized and Unrealized Gains
(Losses) on Securities . . . . . . . 1.16 .89 .24
----- ----- -----
Total From Investment Operations . . . . . . . 1.13 .87 .24
----- ----- -----
Less Distributions:
Dividends (from net investment income) . .
.00 .00** .00
Distributions (from capital gains) . . . . .00 .00 .00
----- ----- -----
Total Distributions . . . . . . . . . . . . . . .00 .00 .00
----- ----- -----
Net Asset Value, End of Period . . . . . . . . $4.74 $3.61 $ 2.74
----- ----- -----
----- ----- -----
Total Return . . . . . . . . . . . . . . . . . 31.30% 31.90% 9.60%
----- ----- -----
----- ----- -----
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) . . . $871,467 $522,667 $211,852
Ratio of Expenses to Average Net Assets . . . . 1.68%# 1.89%^ 2.05%+~
Ratio of Net Income (Loss) to Average Net
Assets . . . . . . . . . . . . . . . . . (.97) (.74) .32%+
Portfolio Turnover Rate . . . . . . . . . . . . 91% 109% 108%
Average Commission Rate . . . . . . . . . . . . $.0584 -- --
</TABLE>
* Covers period from December 30, 1993 (commencement of operations) to
September 30, 1994.
** Dividend from net investment income less than $.01 per share.
# Ratio reflects total expenses, including fees paid indirectly with
brokerage commissions and fees offset by earnings credits, for
1996 only.
^ Ratio reflects total expenses, including fees offset by earnings
credits, for 1995 only.
+ Annualized.
~ Restated.
-5-
<PAGE>
BERGER NEW GENERATION FUND
Financial Highlights
For a Share Outstanding
Throughout the Period
Ended September 30,
--------------------
1996*
-----
Net Asset Value, Beginning of Period . . . . . . $10.00
-----
Income From Investment Operations:
Net Investment Income (Loss) . . . . . . . .56
Net Realized and Unrealized Gains (Losses)
on Securities . . . . . . . . . . . . . 1.26
-----
Total From Investment Operations . . . . . . . . 1.82
-----
Less Distributions:
Dividends (from net investment income) . . . .00
Distributions (from capital gains) . . . . . .00
-----
Total Distributions . . . . . . . . . . . . . . . .00
-----
Net Asset Value, End of Period . . . . . . . . . $11.82
-----
-----
Total Return . . . . . . . . . . . . . . . . . . 18.20%
-----
-----
Ratios/Supplemental Data:
Net Assets, End of Period (in thousands) . . . . $116,912
Ratio of Expenses to Average Net Assets . . . . . 2.09%+#
Ratio of Net Income (Loss) to Average Net
Assets . . . . . . . . . . . . . . . . . . . 12.35%+
Portfolio Turnover Rate . . . . . . . . . . . . . 474%^
Average Commission Rate . . . . . . . . . . . . . $.0291
* Covers period from March 29, 1996 (commencement of operations) to September
30, 1996.
# Ratio reflects total expenses, including fees offset by earnings credits
and investment advisory fee waivers.
+ Annualized.
^ The Fund experienced higher than anticipated turnover during this period
as a result of portfolio transactions undertaken in response to volatile
markets and the short tax year for its initial period of operations.
-6-
<PAGE>
3. INTRODUCTION
The Berger 100 Fund, the Berger Growth and Income Fund, the Berger
Small Company Growth Fund and the Berger New Generation Fund are all mutual
funds or, to use the technical name, open-end, diversified, management
investment companies. The Funds are "no-load" funds, meaning that a buyer pays
no commissions or sales load when buying shares of the Funds, although each Fund
pays certain costs of distributing its shares. See "Policies of the Funds to
Promote Sales of Fund Shares".
This Prospectus describes the securities offered by each of the Funds.
The Berger 100 Fund and the Berger Growth and Income Fund are separate
corporations, and the Berger Small Company Growth Fund and the Berger New
Generation Fund are separate series of the Berger Investment Portfolio Trust, a
Delaware business trust. Each of the Funds is offering only its own shares.
Because the Funds have the same investment advisor, officers and directors or
trustees and have similar investment restrictions and investment privileges, the
Funds believe you will find this combined Prospectus useful and informative in
understanding the important features of the Funds and their similarities and
differences. Although each Fund is offering only its own shares and is not
participating in the sale of the shares of the other Funds, it is possible that
a Fund might become liable for any misstatement, inaccuracy or incomplete
disclosure in the Prospectus concerning the other Funds.
4. INVESTMENT OBJECTIVES AND POLICIES AND RISK FACTORS
The Berger 100 Fund, the Berger Growth and Income Fund, the Berger
Small Company Growth Fund and the Berger New Generation Fund are separate Funds,
each with its own portfolio of securities selected to achieve its particular
investment objective. Since the shares of the Funds primarily represent an
investment in common stocks, the net asset value of each Fund will reflect
changes in the market value of the securities held in that Fund's portfolio, and
the value of a Fund share will therefore go up and down.
BERGER 100 FUND-Registered Trademark-. The investment objective of
the Berger 100 Fund is long-term capital appreciation. Current income is not an
investment objective of the Berger 100 Fund, and any income produced will be a
by-product of the effort to achieve the Fund's objective.
In selecting its portfolio securities, the Berger 100 Fund places
primary emphasis on established companies which it believes to have favorable
growth prospects, regardless of the company's size. Common stocks usually
constitute all or most of the Fund's investment portfolio, but the Fund remains
free to invest in securities other than common stocks, and may do so when deemed
appropriate by the investment advisor to achieve the objective of the Fund. The
Fund may, from time to time, take substantial positions in securities
convertible into common stocks, and it may also purchase government securities,
preferred stocks and other senior securities if its advisor believes these are
likely to be the best suited at that time to achieve the Fund's objective. The
Fund's policy of investing in securities believed to have a potential for
capital growth means that a Fund share may be subject to greater fluctuations in
value than if the Fund invested in other securities.
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BERGER GROWTH AND INCOME FUND. The primary investment objective of
the Berger Growth and Income Fund is capital appreciation. A secondary
objective is to provide a moderate level of current income. However, neither
capital appreciation nor a fixed or moderate rate of current income can be
assured, and in periods of low interest rates and yields on securities, the
income available for distribution to the Fund shareholders will likely be
substantially reduced or eliminated.
In selecting its portfolio securities, the Berger Growth and Income
Fund places primary emphasis on securities which it believes offer favorable
growth prospects and are expected to also provide current income. Common stocks
of companies with mid-sized to large market capitalizations usually constitute
the majority of the Fund's investment portfolio. Market capitalization is
defined as total current market value of a company's outstanding common stock.
The Fund also invests in senior securities such as convertible securities,
preferred stocks, government securities and corporate bonds, as seems
appropriate from time to time. Attention is given to the anticipated
reliability of income as well as to its indicated current level.
BERGER SMALL COMPANY GROWTH FUND-Registered Trademark-. The
investment objective of the Berger Small Company Growth Fund is capital
appreciation. The Fund seeks to achieve its investment objective by investing
its assets principally in a diversified group of equity securities of small
growth companies with market capitalization of less than $1 billion at the time
of initial purchase. Market capitalization is defined as total current market
value of a company's outstanding common stock. Under normal circumstances, the
Berger Small Company Growth Fund will invest at least 65% of its assets in
equity securities of such companies, consisting of common and preferred stock
and other securities having equity features such as convertible bonds, warrants
and rights (subject to certain restrictions). The balance of the Fund may be
invested in equity securities of companies with market capitalization in excess
of $1 billion, government securities, short-term investments or other securities
as described on the following pages. Because income is not an objective of the
Berger Small Company Growth Fund, any income produced will be a by-product of
the effort to achieve the Fund's objective of capital appreciation.
In selecting its portfolio securities, the Berger Small Company Growth
Fund places primary emphasis on companies which it believes have favorable
growth prospects. The Fund seeks to identify small growth companies that either
occupy a dominant position in an emerging industry or a growing market share in
larger fragmented industries. While these companies may present above average
risk, management believes they may have the potential to achieve long-term
earnings growth rates substantially in excess of the growth of earnings of other
companies.
Investments in small growth companies may involve greater risks and
volatility than more traditional equity investments due to some of these
companies potentially having limited product lines, reduced market liquidity for
the trading of their shares and less depth in management than more established
companies. For this reason, the Berger Small Company Growth Fund is not
intended as a complete investment vehicle but rather as an investment for
persons who are in a financial position to assume above average risk and share
price volatility over time. Realizing the full potential of small growth
companies frequently takes time. As a
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result, the Berger Small Company Growth Fund should be considered as a long-term
investment vehicle.
BERGER NEW GENERATION FUND. The investment objective of the Berger
New Generation Fund is capital appreciation. The Fund pursues this objective by
investing primarily in equity securities (including common and preferred stocks,
convertible debt securities and other securities having equity features) of
companies which the Fund's advisor believes have the potential for significant
growth. In particular, the Fund's advisor seeks to identify companies which
develop, manufacture, sell or provide new or innovative products, services or
methods of doing business that it believes have the potential to change the
direction or dynamics of the industries in which they operate or to
significantly influence the way businesses or consumers conduct their affairs.
The Fund may also invest in equity securities of other types of companies,
government securities, short-term investments or other securities as described
on the following pages, if its advisor believes these are likely to be the best
suited at that time to achieve the Fund's objective. Because income is not an
objective of the Fund, any income produced will be a by-product of the effort to
achieve the Fund's objective of capital appreciation.
Because the Fund seeks to identify growth companies of the type
described in the preceding paragraph, the Fund's portfolio is expected to be
weighted toward, but not limited to, companies in business sectors that are
characterized by rapid change, current examples of which are information and
communications technology; electronics; healthcare, pharmaceuticals and
biotechnology; media and entertainment; and environmental services. The
portfolio is also expected to be weighted toward companies with small- to mid-
sized market capitalizations, although the Fund is free to invest in companies
with larger market capitalizations as well. Market capitalization is defined as
total current market value of a company's outstanding common stock.
Investments in companies in rapidly changing industries may involve
greater risks and price volatility than those in more stable industries due to
the intense competition for market share and the fact that those companies may
be developing or marketing new products or services for which markets are not
yet established and may never become established. In addition, products or
services in such industries may be subject to rapid obsolescence and may require
regulatory approvals prior to their use. Moreover, investments in companies
with small- to mid-sized capitalizations may involve greater risks and price
volatility than investments in larger, more mature companies. See below under
"Securities of Smaller Companies".
Because the portfolio of the Berger New Generation Fund is expected to
be weighted toward companies in business sectors characterized by rapid change,
the Fund will frequently focus its investments in a relatively small number of
industries. Since the business sectors characterized by rapid change will vary
over time, so will the industries in which the Fund's investments are focussed.
Although the Fund will not invest 25% or more of its total assets in the
securities of companies in any one industry, focussing on a relatively small
number of industries may cause the net asset value of the Fund's shares to be
more volatile than if the Fund's investments were spread over many different
industries. Additionally, certain economic factors or specific events may exert
a disproportionate impact upon the prices of securities of
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companies within a particular industry relative to their impact on the prices of
companies in other industries.
While many of the companies in the Fund's portfolio may present above
average risk, management believes they may have the potential to achieve long-
term earnings growth rates substantially in excess of the growth of earnings of
other companies. For this reason, the Berger New Generation Fund is not
intended as a complete or balanced investment vehicle but rather as an
investment for persons who are in a financial position to assume greater risk
and share price volatility over time. Realizing the full potential of investing
in the type of companies sought by the Fund frequently takes time. As a
result, the Berger New Generation Fund should be considered as a long-term
investment vehicle.
* * *
In general, investment decisions for the Funds are based on an
approach which seeks out successful companies because they are believed to be
more apt to become profitable investments. To evaluate a prospective
investment, the investment advisor analyzes information from various sources,
including industry economic trends, earnings expectations and fundamental
securities valuation factors to identify companies which in management's opinion
are more likely to have predictable, above average earnings growth, regardless
of the company's geographic location. The advisor also takes into account a
company's management and its innovations in products and services in evaluating
its prospects for continued or future earnings growth.
The investment objective of the Berger 100 Fund, the Berger Small
Company Growth Fund and the Berger New Generation Fund, and the primary
investment objective of the Berger Growth and Income Fund, are considered
fundamental, meaning that they cannot be changed without a shareholders' vote.
The secondary investment objective of the Berger Growth and Income Fund is not
considered fundamental, and therefore may be changed in the future by action of
the directors without shareholder vote. However, the Berger Growth and Income
Fund will not change its secondary investment objective without giving its
shareholders such notice as may be required by law. If the Berger Growth and
Income Fund changes its secondary investment objective, shareholders should
consider whether the Fund remains an appropriate investment in light of their
then current financial position and needs. There can be no assurance that any
of the Funds' investment objectives will be realized.
Any of the Funds may increase their investment in government
securities and other short-term interest-bearing securities without limit when
the advisor believes market conditions warrant a temporary defensive position,
during which period it may be more difficult for a Fund to achieve its
investment objective. Following is additional information about some of the
other specific types of securities and other instruments in which the Funds may
invest.
FOREIGN SECURITIES. Each of the Funds may invest in both domestic and
foreign securities. The Funds' investments may include American Depositary
Receipts (ADRs). The Funds may also invest in European Depositary Receipts
(EDRs) which are similar to ADRs, in bearer form, designed for use in the
European securities markets, and in Global Depositary Receipts (GDRs).
Investments in foreign securities involve some risks that are different from
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the risks of investing in securities of U.S. issuers, such as the risk of
adverse political, social, diplomatic and economic developments and, with
respect to certain countries, the possibility of expropriation, taxes imposed by
foreign countries or limitations on the removal of monies or other assets of the
Fund. Moreover, the economies of individual foreign countries will vary in
comparison to the U.S. economy with respect to growth of gross domestic product,
rates of inflation, capital reinvestment, resources, self-sufficiency and
balance of payments position. Securities of some foreign companies,
particularly those in developing countries, are less liquid and more volatile
than securities of comparable domestic companies. Investing in the securities
of developing countries may involve exposure to economic structures that are
less diverse and mature, and to political systems that can be expected to have
less stability than developed countries.
There also may be less publicly available information about foreign
issuers and securities than domestic issuers and securities, and foreign issuers
generally are not subject to accounting, auditing and financial reporting
standards, requirements and practices comparable to those applicable to domestic
issuers. Also, there is generally less government supervision and regulation of
exchanges, brokers, financial institutions and issuers in foreign countries than
there is in the U.S. Foreign financial markets typically have substantially
less volume than U.S. markets. Foreign markets also have different clearance
and settlement procedures and, in certain markets, delays or other factors could
make it difficult to effect transactions, potentially causing a Fund to
experience losses or miss investment opportunities.
Costs associated with transactions in foreign securities are generally
higher than with transactions in U.S. securities. A Fund will incur greater
costs in maintaining assets in foreign jurisdictions and in buying and selling
foreign securities generally, resulting in part from converting foreign
currencies into U.S. dollars. In addition, a Fund might have greater difficulty
taking appropriate legal action with respect to foreign investments in non-U.S.
courts than with respect to domestic issuers in U.S. courts, which may heighten
the risk of possible losses through the holding of securities by custodians and
securities depositories in foreign countries.
Since a Fund may invest in securities denominated or quoted in
currencies other than the U.S. dollar, changes in foreign currency exchange
rates will affect the value of the investments in its portfolio and the
unrealized appreciation or depreciation of investments insofar as U.S. investors
are concerned. If the currency in which a security is denominated appreciates
against the U.S. dollar, the dollar value of the security will increase.
Conversely, a decline in the exchange rate of the currency would adversely
affect the value of the securities expressed in dollars. Foreign currency
exchange rates are determined by forces of supply and demand on the foreign
exchange markets, which are in turn affected by the international balance of
payments and other economic and financial conditions, government intervention,
speculation and other factors.
CONVERTIBLE SECURITIES. Each Fund may purchase securities which are
convertible into common stock when the Funds' advisor believes they offer the
potential for a higher total return than nonconvertible securities. While fixed
income securities generally have a priority claim on a corporation's assets over
that of common stock, some of the convertible securities
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which the Funds may hold are high-yield/high-risk securities that are subject to
special risks, including the risk of default in interest or principal payments
which could result in a loss of income to the Funds or a decline in the market
value of the securities. Convertible securities often display a degree of
market price volatility that is comparable to common stocks. The credit risk
associated with convertible securities generally is reflected by their being
rated below investment grade by organizations such as Moody's Investors Service,
Inc., Standard & Poor's Corporation or being of similar creditworthiness in the
determination of the Funds' advisor. The Funds have no pre-established minimum
quality standards for convertible securities and may invest in convertible
securities of any quality, including lower rated or unrated securities.
However, none of the Funds will invest in any security in default at the time of
purchase or in any nonconvertible debt securities rated below investment grade,
and each Fund will invest less than 20% of the market value of its assets at the
time of purchase in convertible securities rated below investment grade. If
convertible securities purchased by a Fund are downgraded following purchase, or
if other circumstances cause 20% or more of the Fund's assets to be invested in
convertible securities rated below investment grade, the directors or trustees
of the Fund, in consultation with the Fund's advisor, will determine what
action, if any, is appropriate in light of all relevant circumstances. For a
further discussion of debt security ratings, see Appendix A to the Statement of
Additional Information.
SECURITIES OF SMALLER COMPANIES. All of the Funds may invest in, and
the portfolios of the Berger Small Company Growth Fund and the Berger New
Generation Fund will be weighted toward, securities of companies with small- or
mid-sized market capitalizations. Market capitalization is defined as total
current market value of a company's outstanding common stock. Investments in
companies with smaller market capitalizations may involve greater risks and
price volatility (that is, more abrupt or erratic price movements) than
investments in larger, more mature companies since smaller companies may be at
an earlier stage of development and may have limited product lines, reduced
market liquidity for their shares, limited financial resources or less depth in
management than larger or more established companies. Smaller companies also
may be less significant factors within their industries and may have difficulty
withstanding competition from larger companies. While smaller companies may be
subject to these additional risks, they may also realize more substantial growth
than larger or more established companies.
UNSEASONED ISSUERS. The Funds may invest to a limited degree in
securities of unseasoned issuers. Unseasoned issuers are companies with a
record of less than three years' continuous operation, even including the
operations of any predecessors and parents. Unseasoned issuers by their nature
have only a limited operating history which can be used for evaluating the
company's growth prospects. As a result, investment decisions for these
securities may place a greater emphasis on current or planned product lines and
the reputation and experience of the company's management and less emphasis on
fundamental valuation factors than would be the case for more mature growth
companies. In addition, many unseasoned issuers may also be small companies and
involve the risks and price volatility associated with smaller companies. The
Berger New Generation Fund may invest up to 15% of its total assets in
securities of unseasoned issuers, the Berger Small Company Growth Fund may
invest up to 10% of its total assets in securities of unseasoned issuers, and
each of the
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Berger 100 Fund and the Berger Growth and Income Fund may invest up to 5% of its
total assets in such securities.
ZEROS/STRIPS. The Berger 100 Fund and the Berger Growth and Income
Fund may each invest in zero coupon bonds or in "strips". Zero coupon bonds do
not make regular interest payments; rather, they are sold at a discount from
face value. Principal and accreted discount (representing interest accrued but
not paid) are paid at maturity. "Strips" are debt securities that are stripped
of their interest coupon after the securities are issued, but otherwise are
comparable to zero coupon bonds. The market values of "strips" and zero coupon
bonds generally fluctuate in response to changes in interest rates to a greater
degree than do interest-paying securities of comparable term and quality. None
of the Funds will invest in mortgage-backed or other asset-backed securities.
REPURCHASE AGREEMENTS. Each Fund is authorized to invest in
repurchase agreements. A repurchase agreement is a means of investing cash for
a short period. In a repurchase agreement, a seller (typically a U.S.
commercial bank or recognized U.S. securities dealer) sells securities to the
Fund and agrees to repurchase the securities at the Fund's cost plus interest
within a specified period (normally one day). In these transactions, the
securities purchased by the Fund will have a total value equal to, or in excess
of, the value of the repurchase agreement, and will be held by the Fund's
custodian bank until repurchased. These transactions must be fully
collateralized at all times by debt securities (generally a security issued or
guaranteed by the U.S. Government or an agency thereof, a banker's acceptance or
a certificate of deposit), but involve some credit risk to the Fund if the other
party defaults on its obligation and the Fund is delayed or prevented from
liquidating the collateral. Repurchase agreements maturing in more than seven
days will be considered illiquid for purposes of the restriction on each Fund's
investment in illiquid and restricted securities.
LENDING PORTFOLIO SECURITIES. Each of the Berger Small Company Growth
Fund and the Berger New Generation Fund may lend its portfolio securities to
qualified institutional investors such as brokers, dealers or other financial
organizations. This practice permits a Fund to earn income, which, in turn, can
be invested in additional securities to pursue the Fund's investment objective.
Loans of securities by a Fund will be collateralized by cash, letters of credit,
or securities issued or guaranteed by the U.S. Government or its agencies. The
collateral will equal at least 100% of the current market value of the loaned
securities, marked-to-market on a daily basis. A Fund bears a risk of loss in
the event that the other party to a securities lending transaction defaults on
its obligations and the Fund is delayed in or prevented from exercising its
rights to dispose of the collateral, including the risk of a possible decline in
the value of the collateral securities during the period in which the Fund seeks
to assert these rights, the risk of incurring expenses associated with asserting
these rights and the risk of losing all or a part of the income from the
transaction. Neither of the Funds will lend any security if, as a result of
such loan, the aggregate value of securities then on loan would exceed 33-1/3%
of the market value of the Fund's total assets.
FINANCIAL FUTURES, FORWARDS AND OPTIONS. Each Fund is authorized to
make limited use of certain types of futures, forwards and options, but only for
the purpose of hedging, that is, protecting against the risk of market movements
that may adversely affect the
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value of a Fund's securities or the price of securities that a Fund is
considering purchasing. Although a hedging transaction may, for example,
partially protect a Fund from a decline in the value of a particular security or
its portfolio generally, hedging may also limit the Fund's opportunity to profit
from favorable price movements, and the cost of the transaction will reduce the
potential return on the security or the portfolio. Following is a summary of
the futures, forwards and options which the Funds may utilize, provided that no
more than 5% of a Fund's net assets at the time of purchase may be utilized as
initial margins for financial futures transactions and premiums for options.
Financial futures and forwards are contracts on financial instruments
(such as securities, securities indices and foreign currencies) that obligate
the holder to take or make future delivery of a specified quantity of the
underlying financial instrument. Futures are exchange traded instruments that
may be physically settled or settled with cash or by entering into an offsetting
transaction, while forwards are privately negotiated and contemplate actual
delivery of the underlying financial instrument (usually a foreign currency).
An option gives the holder the right, but not the obligation, to purchase or
sell something (such as a security or a futures contract) at a specified price
at any time until the expiration date. An option on a securities index is
similar, except that upon exercise, settlement is made in cash rather than in
specific securities. Securities options may be either exchange-traded or
privately negotiated, whereas options on futures contracts are always exchange-
traded. Each Fund may only write call options (that is, issue options that
obligate the Fund to deliver if the option is exercised by the holder) that are
"covered" and only up to 25% of a Fund's total assets. A call option is
considered "covered" if a Fund already owns the security on which the option is
written or, in the case of an option written on a securities index, if a Fund
owns a portfolio of securities believed likely to substantially replicate
movement of the index.
Use of these instruments by a Fund involves the potential for a loss
that may exceed the amount of initial margin the Fund would be permitted to
commit to the contracts under its investment limitation, or in the case of a
call option written by a Fund, may exceed the premium received for the option.
However, each Fund will be permitted to use such instruments for hedging
purposes only, and only if the aggregate amount of its obligations under these
contracts does not exceed the total market value of the assets the Fund is
attempting to hedge, such as a portion or all of its exposure to equity
securities or its holding in a specific foreign currency. To help ensure that
each Fund will be able to meet its obligations under its futures and forward
contracts and its obligations under options written by that Fund, each Fund will
be required to maintain liquid assets in a segregated account with its custodian
bank or to set aside portfolio securities to "cover" its position in these
contracts.
The principal risks of the Funds utilizing futures transactions,
forward contracts and options are: (a) losses resulting from market movements
not anticipated by the Funds; (b) possible imperfect correlation between
movements in the prices of futures, forwards and options and movements in the
prices of the securities or currencies hedged or used to cover such positions;
(c) lack of assurance that a liquid secondary market will exist for any
particular futures or options at any particular time, and possible exchange-
imposed price fluctuation limits, either of which may make it difficult or
impossible to close a position when so desired; (d) lack of assurance that the
counterparty to a forward contract would be willing to negotiate an offset
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or termination of the contract when so desired; (e) the need for additional
information and skills beyond those required for the management of a portfolio
of traditional securities; and (f) possible need to defer closing out certain
futures or options contracts in order to continue to qualify for beneficial tax
treatment afforded "regulated investment companies" under the Internal Revenue
Code of 1986, as amended. In addition, when a Fund enters into an over-the-
counter contract with a counterparty, the Fund will assume counterparty credit
risk, that is, the risk that the counterparty will fail to perform its
obligations, in which case the Fund could be worse off than if the contract had
not been entered into. Additional detail concerning the Funds' use of futures,
forwards and options and the risks of such investments can be found in the
Statement of Additional Information.
ILLIQUID SECURITIES. Each Fund is authorized to invest in securities
which are illiquid or not readily marketable because they are subject to
restrictions on their resale ("restricted securities") or because, based upon
their nature or the market for such securities, no ready market is available.
However, none of the Funds may purchase any security, the purchase of which
would cause the Fund to invest more than 15% of its net assets, measured at the
time of purchase, in illiquid securities. If securities become illiquid
following purchase or other circumstances cause more than 15% of a Fund's net
assets to be invested in illiquid securities, the directors or trustees, in
consultation with the Fund's advisor, will determine what action, if any, is
appropriate in light of all relevant circumstances. Repurchase agreements
maturing in more than seven days will be considered as illiquid for purposes of
this restriction. Certain restricted securities, such as Rule 144A securities,
may be treated as liquid under this restriction if a determination is made that
such securities are readily marketable. Investments in illiquid securities
involve certain risks to the extent that a Fund may be unable to dispose of such
a security at the time desired or at a reasonable price or, in some cases, may
be unable to dispose of it at all. In addition, in order to resell a restricted
security, a Fund might have to incur the potentially substantial expense and
delay associated with effecting registration.
INVESTMENT RESTRICTIONS
In addition to its investment objective, each Fund has adopted a
number of restrictions on its investments and other activities that may not be
changed without shareholder approval. For example, neither the Berger 100 Fund
nor the Berger Growth and Income Fund may purchase securities of any issuer
(except U.S. Government securities) if, immediately after and as a result of
such purchase, the value of such Fund's holdings in the securities of that
issuer exceeds 5% of the value of its total assets or it owns more than 10% of
the outstanding voting securities or of any class of securities of such issuer.
The Berger Small Company Growth Fund and the Berger New Generation Fund are
similarly restricted with respect to 75% of their total assets.
Further, neither the Berger 100 Fund nor the Berger Growth and Income
Fund may borrow in excess of 5% of its total assets or pledge assets taken at
market value to an extent greater than 10% of its total assets taken at cost
(and no borrowing may be undertaken except from banks as a temporary measure for
extraordinary or emergency purposes), subject to certain exclusions, and neither
may make loans (except that each Fund may enter into repurchase agreements in
accordance with the Fund's investment policies). Neither the Berger Small
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Company Growth Fund nor the Berger New Generation Fund may borrow money, except
borrowing undertaken from banks for temporary or emergency purposes in amounts
not to exceed 25% of the market value of its total assets (including the amount
borrowed), and neither may make loans (except that the Fund may enter into
repurchase agreements and may lend portfolio securities in accordance with the
Fund's investment policies). None of the Funds may invest in any one industry
more than 25% of the value of its assets at the time of investment, nor invest
in commodities, except, only for the purpose of hedging, in certain futures,
forwards and options as specified in greater detail above and in the Statement
of Additional Information.
Also, none of the Funds currently intends to make short sales of
securities, except short sales of securities which the Fund owns or has the
right to acquire at no additional cost (i.e., short sales "against the box"),
and does not intend to purchase or sell securities on a when-issued or delayed
delivery basis if as a result, more than 5% of its assets are invested in such
securities, although these restrictions may be changed without shareholder
approval. For more detail about the Funds' investment restrictions, see the
Statement of Additional Information.
5. PORTFOLIO TURNOVER
In pursuit of each Fund's investment objective, management
continuously monitors the Fund's investments and makes portfolio changes
whenever changes in the market, industry trends or the outlook for the growth of
any portfolio security indicate to management that the objective could be better
achieved by investment in another security, regardless of portfolio turnover.
In addition, portfolio turnover may increase as a result of large amounts of
purchases and redemptions of shares of a Fund due to economic, market or other
factors that are not within the control of management. The annual portfolio
turnover rates of the Funds may at times exceed 100%. An annual turnover rate
of 100% or more would be higher than that of most other funds. Increased
portfolio turnover would necessarily result in correspondingly higher brokerage
costs for the Funds and may result in the acceleration of net taxable gains.
The portfolio turnover rates are shown in the tables in Section 2 beginning on
page 3.
6. MANAGEMENT AND INVESTMENT ADVICE
The directors or trustees of each Fund are responsible for major
decisions relating to that Fund's policies and objectives. They also oversee
the operation of each Fund by its officers and review the investment performance
of the Funds on a regular basis.
The investment advisor to each of the Funds is Berger Associates,
210 University Boulevard, Suite 900, Denver, CO 80206. Berger Associates
furnishes continuous advice and recommendations to each Fund regarding
securities to be purchased and sold by the Fund. Berger Associates, therefore,
formulates a continuing program for management of the assets of each Fund
consistent with the investment objectives and policies established by the
directors or trustees of each Fund. Berger Associates also provides office
space for each Fund and pays the salaries, fees and expenses of all Fund
officers and directors or trustees of the Funds who are interested persons of
Berger Associates. Berger Associates serves as investment advisor to mutual
funds, pension and profit-sharing plans, and institutional and private
investors.
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Rodney L. Linafelter, Vice President and Chief Investment Officer of
Berger Associates, is the portfolio manager for the Berger 100 Fund and the
Berger Growth and Income Fund and as such is responsible for the investments of
both of these Funds, including the day-to-day investment decisions for the
Funds. Mr. Linafelter is also the President and a director of the Berger 100
Fund and the Berger Growth and Income Fund and President and a trustee of Berger
Investment Portfolio Trust, of which the Berger Small Company Growth Fund and
the Berger New Generation Fund are series. As Chief Investment Officer of
Berger Associates, Mr. Linafelter has management responsibilities with respect
to all investment activities of the Funds.
Mr. Linafelter joined Berger Associates in January 1990, where he has
served as a portfolio manager for the Berger 100 Fund and the Berger Growth and
Income Fund, as well as for retirement plans and institutional and private
investors. From April 1986 to December 1989, Mr. Linafelter was employed as a
Financial Consultant (registered representative) with Merrill Lynch, Pierce,
Fenner & Smith, Inc., providing investment advice to institutions and
individuals.
William R. Keithler is the President and portfolio manager of the
Berger Small Company Growth Fund and the Berger New Generation Fund and is
primarily responsible for the investments of both of these Funds, including the
day-to-day investment decisions for the Funds. Mr. Keithler joined Berger
Associates as Vice President-Investment Management in December 1993.
Previously, he was employed by INVESCO Trust Company, Denver, Colorado, as
Senior Vice President (January 1993 to December 1993), Vice President (January
1991 to January 1993) and Portfolio Manager (January 1988 to January 1991).
During his seven years with INVESCO, Mr. Keithler was portfolio manager of
several mutual funds, most recently INVESCO Dynamics Fund and INVESCO Emerging
Growth Fund. From 1982 to 1986, Mr. Keithler was Vice President and portfolio
manager with First Trust St. Paul, in St. Paul, Minnesota.
William M.B. Berger is a director (Chairman of the Board) of Berger
Associates, and a director of the Berger 100 Fund and the Berger Growth and
Income Fund and a trustee of the Berger Investment Portfolio Trust. Although he
is no longer involved in making investment decisions for the Funds, he was
founder of Berger Associates and its President from 1973 until 1994, and he was
a principal shareholder and executive officer of predecessor investment advisory
firms which served as investment advisors to mutual funds and other investors
from 1960. From 1950 to 1960, he was an investment officer in the trust
department of The Colorado National Bank of Denver in charge of common stock
investments.
Under their Investment Advisory Agreements, the Berger 100 Fund and
the Berger Growth and Income Fund each have agreed to compensate Berger
Associates for its investment advisory services to the Fund by the payment of a
fee at the annual rate of .75 of 1% (0.75%) of the average daily net assets of
the Fund. Under the Investment Advisory Agreement for the Berger Small Company
Growth Fund and the Berger New Generation Fund, Berger Associates is compensated
for its investment advisory services to those Funds by the payment of a fee at
the annual rate of .9 of 1% (0.90%) of the average daily net assets of each
Fund.
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Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80%
of the outstanding shares of Berger Associates. KCSI is a publicly traded
holding company with principal operations in rail transportation, through its
subsidiary The Kansas City Southern Railway Company, and financial asset
management businesses. KCSI also owns approximately 41% of the outstanding
shares of DST Systems, Inc. ("DST"), a publicly traded information and
transaction processing company which acts as the Funds' sub-transfer agent.
7. EXPENSES OF THE FUNDS
Each of the Funds has appointed Investors Fiduciary Trust Company
("IFTC") as its recordkeeping and pricing agent to calculate the daily net asset
value of such Fund and to perform certain accounting and recordkeeping functions
required by the Fund. In addition, IFTC also serves as the Funds' custodian,
transfer agent and dividend disbursing agent. IFTC has engaged DST as sub-agent
to provide transfer agency and dividend disbursing services for the Funds. As
noted above, approximately 41% of the outstanding shares of DST are owned by
KCSI.
For custodian, recordkeeping and pricing services, each Fund pays fees
to IFTC based on a percentage of its assets, subject to certain minimums. Each
Fund also pays a monthly fee based primarily on the number of accounts
maintained on behalf of the Fund for transfer agency and dividend disbursing
services, which fees are paid by the Funds to IFTC and in turn passed through to
DST as sub-agent. In addition, the Funds reimburse IFTC and DST for certain
out-of-pocket expenses.
The Funds and Berger Associates have entered into arrangements with
certain organizations (broker-dealers, recordkeepers and administrators) to
provide sub-transfer agency, recordkeeping, shareholder communications, sub-
accounting and/or other services to investors purchasing shares of the Funds
through investment programs or pension plans established or serviced by those
organizations. The Funds and/or Berger Associates may pay fees to these
organizations for their services. Any such fees paid by a Fund will be for
services that otherwise would be provided or paid for by the Fund if all the
investors who own Fund shares through the organization were registered record
holders of shares in the Fund.
The directors or trustees of each of the Funds have authorized Berger
Associates to place portfolio transactions on an agency basis through DST
Securities, Inc., a wholly-owned broker-dealer subsidiary of DST ("DSTS"). When
transactions are effected through DSTS, the commission received by DSTS is
credited against, and thereby reduces, certain operating expenses that the Fund
would otherwise be obligated to pay. No portion of the commission is retained
by DSTS.
In addition, under a separate Administrative Services Agreement with
each Fund, Berger Associates performs certain administrative and recordkeeping
services not otherwise performed by IFTC, including the preparation of financial
statements and reports to be filed with regulatory authorities. Each Fund pays
Berger Associates a fee at the annual rate of one one-hundredth of one percent
(0.01%) of its average daily net assets for such services.
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The Funds also incur other expenses, including accounting,
administrative and legal expenses. Berger Associates has voluntarily
agreed to waive the advisory fee owed by the Berger New Generation Fund to the
extent that the Fund's normal operating expenses in any fiscal year, including
the management fee and the 12b-1 fee, but excluding brokerage commissions,
interest, taxes and extraordinary expenses, exceed 1.90% of the Fund's average
daily net assets for that fiscal year.
8. POLICIES OF THE FUNDS TO PROMOTE SALES OF FUND SHARES
Each Fund has adopted a 12b-1 plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940, which permits that Fund to pay certain
costs for the distribution of its own shares. Each Plan provides for the
payment to Berger Associates of a 12b-1 fee of .25 of 1% (0.25%) per annum of
that Fund's average daily net assets to finance activities primarily intended to
result in the sale of Fund shares. The expenses paid by Berger Associates may
include, but are not limited to, payments made to and expenses of persons
(including employees of Berger Associates) who are engaged in, or provide
support services in connection with, the distribution of Fund shares, such as
answering routine telephone inquiries and processing shareholder requests for
information; compensation (including incentive compensation and/or continuing
compensation based on the amount of customer assets maintained in a Fund) paid
to securities dealers, financial institutions and other organizations which
render distribution and administrative services in connection with the
distribution of the Funds' shares; costs related to the formulation and
implementation of marketing and promotional activities, including direct mail
promotions and television, radio, newspaper, magazine and other mass media
advertising; costs of printing and distributing prospectuses and reports to
prospective shareholders of the Funds; costs involved in preparing, printing and
distributing sales literature for the Funds; costs involved in obtaining
whatever information, analyses and reports with respect to market and
promotional activities on behalf of the Funds that Berger Associates deems
advisable; and such other costs as may from time to time be agreed upon by the
Funds. Such payments are to be made by each Fund to Berger Associates with
respect to each fiscal year of the Fund without regard to the actual
distribution expenses incurred by Berger Associates in such year; that is, if
the distribution expenditures incurred by Berger Associates are less than the
total of such payments in such year, the difference is not to be reimbursed to a
Fund by Berger Associates, and if the distribution expenditures incurred by
Berger Associates are more than the total of such payments, the excess is not to
be reimbursed to Berger Associates by the Fund. From time to time the Funds may
engage in activities which jointly promote the sale of the shares of the Funds
and other funds that are or may in the future be advised or administered by
Berger Associates, which costs are not readily identifiable as related to any
one fund. In such cases, Berger Associates allocates the cost of the activity
among the funds involved on the basis of their respective net assets, unless
otherwise directed by the directors or trustees.
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The current 12b-1 Plans will continue in effect until the end of April
1997, and from year to year thereafter if approved at least annually by each
Fund's directors or trustees and those directors or trustees who are not
interested persons of the Fund and have no direct or indirect financial interest
in the operation of the Plan or any related agreements by votes cast in person
at a meeting called for such purpose. None of the Plans may be amended to
increase materially the amount to be spent on distribution of shares of the Fund
without shareholder approval.
The directors or trustees of each Fund have authorized Berger
Associates to consider sales of shares of the Fund by a broker-dealer or the
recommendations of a broker-dealer to its customers that they purchase Fund
shares as a factor in the selection of broker-dealers to execute portfolio
transactions for the Fund. In placing portfolio business with such broker-
dealers, Berger Associates will seek the best execution of each transaction.
9. HOW TO PURCHASE SHARES IN THE FUNDS
(i) MINIMUM INITIAL INVESTMENT -- $2,000.00. To purchase shares in
any of the Funds, simply complete the application form enclosed with this
Prospectus. Then mail it with a check payable to "Berger Funds" to the Funds in
care of DST Systems, Inc., the Funds' sub-transfer agent, as follows:
Berger Funds
c/o DST Systems, Inc.
P.O. Box 419958
Kansas City, MO 64141
A confirmation indicating the details of the transaction will be sent to you
promptly. Unless you specify full shares only, the purchase will be made in
full and fractional shares calculated to three decimal places.
In addition, Fund shares may be purchased through certain broker-
dealers that have established mutual fund programs and certain other
organizations connected with pension and retirement plans. These broker-dealers
and other organizations may charge investors a transaction or other fee for
their services, may require different minimum initial and subsequent investments
than the Funds and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Funds directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will be paid by an
investor who purchases the Fund shares directly from the Fund as described
above.
The Funds will, at their discretion, accept orders transmitted by
these organizations although not accompanied by payment for the shares being
purchased. Payment must be received by the Fund within three business days
after acceptance of the order. The price at which a purchase will be effected
is based on the next calculation of net asset value after the order is received
by the Fund's transfer agent, sub-transfer agent or any other authorized agent
of the Fund.
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(ii) MINIMUM SUBSEQUENT INVESTMENTS -- $50.00. Shareholders may,
at any time, purchase additional shares subject to a minimum investment of
$50.00. A check made payable to "Berger Funds" in the amount to be invested,
should be sent to the Berger Funds, c/o DST Systems, Inc., P.O. Box 419958,
Kansas City, MO 64141. Please be sure to give your name and account number.
You will receive a confirmation of every transaction.
(iii) AUTOMATIC INVESTMENT PLAN. By completing the Automatic
Investment Plan section of the application, you may authorize each Fund in
which you are investing to debit your bank account for the periodic purchase
of Fund shares on or about the 5th or 20th day of each month. Automatic
investments are subject to the minimum initial investment of $2,000, a
minimum investment of $50.00 per month and are unrestricted as to the
permitted maximum. You will receive confirmation of automatic investments
after the end of each calendar quarter.
(iv) TELEPHONE AND ON-LINE INVESTMENTS. The Funds will, at their
discretion, accept purchase orders from existing shareholders by telephone,
or via their personal computer, through on-line service providers or other
on-line access points approved by the Fund, although not accompanied by
payment for the shares being purchased. To receive the net asset value for a
specific day, a telephone or on-line purchase request must be received before
the close of the New York Stock Exchange on that day. Payment for shares
ordered on-line must be made by electronic funds transfer. Payment for
shares ordered by telephone must be received by the Funds' transfer agent
within three business days after acceptance of the order. In order to make
sure that payment is received on time, shareholders are encouraged to remit
payment by electronic funds transfer. Shareholders may also remit payment by
wire or by overnight delivery. If payment is not received on time, a Fund
may cancel the order and redeem shares held in the shareholder's account to
compensate the Fund for any decline in the value of the purchased shares.
Telephone and on-line purchase orders may not exceed four times the value of
an account on the date the order is placed (shares previously purchased by
telephone or on-line are included in computing such value only if payment has
been received). See "How to Redeem or Sell Fund Shares - Telephone and
On-line Redemptions" for procedures for telephone transactions.
(v) PAYMENT AND TERMS OF OFFERING. Payment for shares purchased
should be made by check or money order drawn on a United States bank and made
payable to the Berger Funds. Checks not made payable to the Berger Funds,
the account registrant, transfer agent or retirement account custodian will
not be accepted. Alternatively, payment for shares purchased by telephone
may be made by wire or electronic funds transfer from the investor's bank to
DST Systems, Inc. Shares purchased on-line must be paid for by electronic
funds transfer. Please call 1-800-551-5849 for current wire or electronic
funds transfer instructions. The Funds will not accept purchases by cash or
credit card or checks drawn on foreign banks unless provision is made for
payment through a U.S. bank in U.S. dollars.
The Funds reserve the right in their sole discretion to withdraw
all or any part of the offering made by this Prospectus or to reject purchase
orders, when in the judgment of management, such withdrawal or rejection is
in the best interest of a Fund. The Funds also reserve the right at any time
to waive the minimum investment requirements applicable to initial or
subsequent investments or to increase the minimums following notice. No
application to purchase shares is binding on a Fund until accepted in writing.
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10. HOW THE NET ASSET VALUE IS DETERMINED
The price of each Fund's shares is based on the net asset value of
that Fund, which is determined at the close of the regular trading session of
the New York Stock Exchange (the "Exchange") (normally 4:00 p.m., New York time)
each day that the Exchange is open.
The per share net asset value of each Fund is determined by dividing
the total value of its securities and other assets, less liabilities, by the
total number of shares outstanding. In determining net asset value, securities
are valued at market value or, if market quotations are not readily available,
at their fair value determined in good faith pursuant to consistently applied
procedures established by the directors or trustees. Money market instruments
maturing within 60 days are valued at amortized cost, which approximates market
value.
All assets and liabilities initially expressed in terms of non-U.S.
dollar currencies are translated into U.S. dollars at the prevailing market
rates as quoted by one or more banks or dealers shortly before the close of the
Exchange. See the Statement of Additional Information for more detailed
information. A Fund's foreign securities may be listed primarily on foreign
exchanges or over-the-counter dealer markets which may trade on days when the
Exchange is closed (such as customary U.S. holidays) and the Fund's net asset
value is not calculated. As a result, the net asset value of the Fund may be
significantly affected by such trading on days when shareholders cannot purchase
or redeem shares of the Fund.
Since none of the Funds imposes any front end sales load or redemption
fee, both the purchase price and the redemption price of a Fund share are the
same and will be equal to the next calculated net asset value of a share of that
Fund.
11. OPEN ACCOUNT SYSTEM AND SHARE CERTIFICATES
Unless otherwise directed, all investor accounts are maintained on a
book-entry basis. Share certificates will not be issued unless requested by the
shareholder. Shares purchased by dividend reinvestment or under an Automatic
Investment Plan, and shares redeemed under a Systematic Withdrawal Plan, will be
confirmed after the end of each calendar quarter. Following any other
investment or redemption, the investor will receive a printed confirmation
indicating the dollar amount of the transaction, the per share price of the
transaction and the number of shares purchased or redeemed.
12. HOW TO REDEEM OR SELL FUND SHARES
(i) SHARE REDEMPTIONS BY MAIL. Each Fund will buy back (redeem), at
current net asset value, all shares of the Fund offered for redemption. The
redemption price of shares tendered for redemption will be the net asset value
next determined after receipt of all required documents by the Funds' transfer
agent, sub-transfer agent or other authorized agent of the Funds. To receive
the net asset value for a specific day, a redemption request must be received
before the close of the Exchange on that day. Shareholders who purchased their
shares directly from a Fund may redeem all or part of their shares in the Fund
by sending a written request to the Berger Funds, c/o DST Systems, Inc., P.O.
Box 419958, Kansas City, MO 64141. The
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written request for redemption must be signed by each registered owner exactly
as the shares are registered and must clearly identify the account and the
number of shares or the dollar amount to be redeemed. If a share certificate
has been issued, the certificate, properly endorsed by the registered owner,
must be submitted with the written redemption request.
The signatures of the redeeming shareholders must be guaranteed by a
national or state bank, a member firm of a domestic stock exchange or the
National Association of Securities Dealers (NASD), a credit union, a federal
savings and loan association or another eligible guarantor institution if the
redemption: exceeds $100,000; is being made payable other than exactly as
registered; is being mailed to an address which has been changed within 30 days
of the redemption request; or is being mailed to an address other than the one
on record. A notary public is not an acceptable guarantor. The Funds also
reserve the right to require a signature guarantee under other circumstances.
The signature guarantees must appear, together with the signatures of the
registered owners (i) on the written request for redemption which clearly
identifies the account and the number of shares to be redeemed, (ii) on a
separate instrument of assignment ("stock power") which may be obtained from a
bank or broker, or (iii) on any share certificates tendered for redemption. The
use of signature guarantees is intended to protect the shareholder and the Funds
from a possibly fraudulent application for redemption.
Additional documents are required for redemptions by corporations,
executors, administrators, trustees and guardians. If there is doubt as to what
additional documents are required, please write the Berger Funds, c/o DST
Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, or call DST at
1-800-551-5849.
(ii) TELEPHONE AND ON-LINE REDEMPTIONS. All shareholders have
Telephone and On-line Transaction Privileges to authorize purchases, exchanges
or redemptions unless they specifically decline this service on the account
application or by writing to the Berger Funds, c/o DST Systems, Inc., P.O. Box
419958, Kansas City, MO 64141. Shareholders may redeem shares by telephone or,
via their personal computer, through on-line service providers or other on-line
access points approved by the Funds. The telephone and on-line redemption
option is not available for shares held in retirement accounts sponsored by the
Funds. Telephone redemption requests may be made by calling DST Systems, Inc.,
at 1-800-551-5849. To receive the net asset value for a specific day, a
redemption request must be received before the close of the New York Stock
Exchange on that day. As discussed above, certain requests must be in writing
and the signature of a redeeming shareholder must be signature guaranteed, and
therefore shares may not be redeemed by telephone or on-line, if the redemption:
exceeds $100,000; is being made payable other than exactly as registered; is
being mailed to an address which has been changed within 30 days of the
redemption request; is being mailed to an address other than the one on record;
or the shares are represented by share certificates issued to the shareholder.
All telephone and on-line transactions are recorded and written
confirmations indicating the details of all telephone and on-line transactions
will promptly be sent to the shareholder of record. Prior to accepting a
telephone or on-line transaction, the shareholder placing the order may be
required to provide certain identifying information. A shareholder electing to
communicate instructions by telephone or on-line may be giving up some level of
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security that would otherwise be present were the shareholder to request a
transaction in writing. Neither the Funds nor their transfer agent or
investment advisor assume responsibility for the authenticity of instructions
communicated by telephone or on-line which are reasonably believed to be genuine
and which comply with the foregoing procedures. The Funds, and/or their
transfer agent, may be liable for losses resulting from unauthorized or
fraudulent telephone or on-line instructions in the event these procedures are
not followed.
In times of extreme economic or market conditions, redeeming shares by
telephone or on-line may be difficult. The Funds may terminate or modify the
procedures concerning the telephone or on-line redemption and wire transfer
services at any time, although shareholders of the Funds will be given at least
60 days' prior notice of any termination or material modification. Berger
Associates may, at its own risk, waive certain of these redemption requirements.
(iii) PAYMENT FOR REDEEMED SHARES. Payment for shares redeemed upon
written request will be made by check and generally will be mailed within three
business days after receipt by the transfer agent of the properly executed
redemption request and any outstanding certificates for the shares to be
redeemed. Payment for shares redeemed by telephone or on-line will be made by
check payable to the account name(s) and address exactly as registered, and
generally will be mailed within three business days following the date of the
request for redemption.
A shareholder may request that payment for redeemed shares of the
Funds be made by wire or electronic funds transfer. Shareholders may elect to
use these services on the account application or by providing the Funds with a
signature guaranteed letter requesting these services and designating the bank
to receive all wire or electronic funds transfers. A shareholder may change the
predesignated bank of record by providing the Funds with written, signature
guaranteed instructions. Wire and electronic funds transfers are subject to a
$1,000 minimum and a $100,000 maximum limitation. Redemption proceeds paid by
wire transfer will be transmitted to the shareholder's predesignated bank
account on the next business day after receipt of the shareholder's redemption
request. There is a $10 fee for each wire payment for shares redeemed by the
Funds. Redemption proceeds paid by electronic funds transfer will be
electronically transmitted to the shareholder's predesignated bank account on
the second business day after receipt of the shareholder's redemption request.
There is no fee for electronic funds transfer of proceeds from the redemption of
Fund shares.
A shareholder may also request that payment for redeemed shares of a
Cash Account Trust portfolio be made by wire or electronic funds transfer and
should review the Cash Account Trust portfolio prospectus for procedures and
charges applicable to redemptions by wire and electronic funds transfers. See
below under "Exchange Privilege and Systematic Withdrawal Plan" for more
information concerning the Cash Account Trust portfolios.
Shareholders may encounter delays in redeeming shares purchased by
check (other than cashier's or certified checks), electronic funds transfer or
through the Automatic Investment Program if the redemption request is made
within 15 days after the date of purchase. In those situations, the redemption
check will be mailed within 15 days after the transfer agent's receipt
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of the purchase instrument, provided that it has not been dishonored or
cancelled during that time. The foregoing policy is to ensure that all payments
for the shares being redeemed have been honored. In addition to the foregoing
restrictions, no redemption payment can be made for shares which have been
purchased by telephone or on-line order until full payment for the shares has
been received. In any event, valid redemption requests concerning shares for
which full payment has been made will be priced at the net asset value next
determined after receipt of the request.
(iv) REDEMPTIONS BY THE FUND. As a means of reducing its expenses,
the Berger Growth and Income Fund, the Berger Small Company Growth Fund and the
Berger New Generation Fund are authorized to redeem involuntarily all shares
held in accounts with a value of less than $2,000. (Minimum account value
requirements are reduced for shareholders who opened accounts prior to the date
of this Prospectus: For shareholders who opened accounts in the Berger Growth
and Income Fund or the Berger Small Company Growth Fund prior to January 26,
1996, the account minimum is $250, and for shareholders who opened their
accounts in those Funds on or after January 26, 1996, but before the date of
this Prospectus, the account minimum is $500. The account minimum is $1,000 for
shareholders who opened accounts in the Berger New Generation Fund prior to the
date of this Prospectus.) Such redemptions will be permitted only when the
account is reduced below the minimum value by redemption, and not by declines in
per share net asset value. As a result, accounts established with the
applicable minimum investment might be subject to redemption after only a small
redemption has been made by the shareholder. At least 60 days' written notice
will be given to a shareholder before such an account is redeemed. During that
time, the shareholder may add sufficient funds to the account. If such amount
is not added to the account, the shares will be redeemed, at the per share net
asset value next determined after the 60th day following the notice. A check
for the proceeds will be sent to the shareholder unless a share certificate has
been issued, in which case payment will be made upon surrender of the
certificate.
13. EXCHANGE PRIVILEGE AND SYSTEMATIC WITHDRAWAL PLAN
(i) EXCHANGES. By telephoning the Fund at 1-800-551-5849, or writing
to the Fund at P.O. Box 419958, Kansas City, MO 64141, or, via their personal
computer through on-line service providers or other on-line access points
approved by the Funds, any shareholder may exchange, without charge, any or all
of the shareholder's shares in any of the Funds for shares of any of the other
publicly available Berger Funds, or for shares of the Money Market Portfolio,
the Government Securities Portfolio or the Tax-Exempt Portfolio of the Cash
Account Trust (the "CAT Portfolios"), separately managed, unaffiliated money
market funds. Exchanges may be made only if the Berger Fund or CAT Portfolio
with which you wish to exchange your shares is registered in your state of
residence. The exchange privilege with the CAT Portfolios does not constitute
an offering or recommendation of the shares of any such CAT Portfolio by any of
the Berger Funds or Berger Associates. Berger Associates is compensated for
administrative services it performs with respect to the CAT Portfolios.
It is your responsibility to obtain and read a prospectus of the
Berger Fund or CAT Portfolio into which you are exchanging. By giving exchange
instructions, a shareholder will be deemed to have acknowledged receipt of the
prospectus for the Berger Fund or CAT
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Portfolio being purchased. You may make up to four exchanges out of each Fund
during the calendar year. This limit helps keep each Fund's net asset base
stable and reduces the Fund's administrative expenses. There currently is no
limit on exchanges out of the three CAT Portfolios. In times of extreme
economic or market conditions, exchanging Fund or CAT Portfolio shares by
telephone or on-line may be difficult. See "How to Redeem or Sell Fund Shares -
Telephone and On-line Redemptions" for procedures for telephone and on-line
transactions.
Redemptions of shares in connection with exchanges into or out of the
Funds are made at the net asset value per share next determined after the
exchange request is received. To receive a specific day's price, your letter,
call or on-line order must be received before that day's close of the New York
Stock Exchange. A day or more delay may be experienced prior to the investment
of the redemption proceeds into a CAT Portfolio. Each exchange represents the
sale of shares from one fund and the purchase of shares in another, which may
produce a gain or loss for Federal income tax purposes.
All exchanges are subject to the minimum and subsequent investment
requirements of the Fund or CAT Portfolio into which shares are being exchanged.
Exchanges will be accepted only if the registration of the two accounts is
identical. Neither the Funds nor the CAT Portfolios, or their transfer agents
or advisors assume responsibility for the authenticity of exchange instructions
communicated in writing or by telephone or on-line which are believed to be
genuine. See "How to Redeem or Sell Fund Shares - Telephone and On-line
Redemptions" for procedures for telephone and on-line transactions. All
shareholders have Telephone and On-line Transaction Privileges to authorize
exchanges unless they specifically decline this service on the account
application or by writing to the Berger Funds, c/o DST Systems, Inc., P.O. Box
419958, Kansas City, MO 64141.
(ii) SYSTEMATIC WITHDRAWAL PLAN. A shareholder who owns shares of any
of the Funds worth at least $5,000 at the current net asset value may establish
a Systematic Withdrawal account from which a fixed sum, minimum of $50, will be
paid to the shareholder monthly, quarterly, semiannually or annually. You will
receive confirmation of systematic withdrawals after the end of each calendar
quarter.
For more information regarding the Systematic Withdrawal Plan and
forms to open such accounts, please write to the Berger Funds, c/o DST Systems,
Inc., P.O. Box 419958, Kansas City, MO 64141, or call 1-800-551-5849.
14. TAX-SHELTERED RETIREMENT PLANS
The Funds offer several tax-qualified retirement plans for adoption by
individuals and employers. Participants in these plans can accumulate shares of
the Funds on a tax-deferred basis.
The Funds offer both a profit-sharing plan and a money purchase
pension plan for employers and self-employed persons. Contributions to these
plans are tax-deductible and earnings are tax-exempt until distributed. Under
the profit-sharing plan, the employer or
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self-employed person can adjust their contributions from year to year. Under
the money purchase pension plan, the employer or self-employed person must
commit to a contribution each year. When these plans are adopted by
self-employed persons, they are commonly referred to as Keogh or HR 10 plans.
The Funds also offer an Individual Retirement Account ("IRA").
Individuals who have compensation, but who are either not covered by existing
qualified retirement plans and do not have spouses covered by such plans, or do
not have incomes which exceed certain amounts, may contribute tax-deductible
dollars to an IRA. Individuals who are covered by existing retirement plans or
have spouses covered by such plans, and whose incomes exceed the applicable
amounts, are not permitted to deduct their IRA contributions for Federal income
tax purposes. However, whether an individual's contributions are deductible or
not, the earnings on his or her IRA are not taxed until the account is
distributed.
The Funds also offer a 403(b) Custodial Account. Employees of certain
tax-exempt organizations and public schools may contribute tax-deductible
dollars to these accounts, on which earnings are tax-exempt until distributed.
In order to receive the necessary materials to create a profit-sharing
or money purchase pension plan account, an IRA account or a 403(b) Custodial
Account, please write to the Funds, c/o Berger Associates, Inc., P.O. Box 5005,
Denver, CO 80217, or call 1-800-333-1001. Trustees for existing 401(k) or other
plans interested in utilizing Fund shares as an investment or investment
alternative in their plans should contact the Funds at 1-800-333-1001.
15. INCOME DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX TREATMENT
The policies of the Funds on payments of dividends and capital gains
distributions are described below.
BERGER 100 FUND-Registered Trademark-, BERGER SMALL COMPANY GROWTH
FUND-Registered Trademark- AND BERGER NEW GENERATION FUND. The Berger 100 Fund,
the Berger Small Company Growth Fund and the Berger New Generation Fund each
intends to declare dividends representing the Fund's net investment income
annually, normally in December. It is also the present policy of each of these
Funds to distribute annually all of its net realized capital gains.
BERGER GROWTH AND INCOME FUND. The Berger Growth and Income Fund
intends to declare dividends representing net investment income four times
annually, generally in the months of March, June, September and December. It is
also the present policy of the Fund to distribute annually all of its net
realized capital gains.
Each of the Funds is treated as a separate entity for tax purposes and
has elected and intends to maintain its qualification to be treated as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended. If they so qualify and meet certain minimum distribution
requirements, the Funds generally will not be liable for Federal income tax on
the amount of their earnings that are timely distributed. If a Fund distributes
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annually less than 98% of its income and gain, it may be subject to a
nondeductible excise tax equal to 4% of the shortfall.
All dividends and capital gains distributions paid by a Fund will be
automatically reinvested in shares of that Fund at the net asset value on the
ex-dividend date unless an investor specifically requests that either dividends
or distributions, or both, be paid in cash. The election to receive dividends
or distributions in cash or to reinvest them in Fund shares may be changed by
calling the Berger Funds at 1-800-551-5849 or by written request to the Berger
Funds, c/o DST Systems, Inc., P.O. Box 419958, Kansas City, MO 64141, and must
be received at least ten days prior to the record date of any dividend or
capital gains distribution.
Each Fund will inform its shareholders of the amount and nature of
such income or gains resulting from their investment in the Fund. Dividends
declared and payable to shareholders of record on a specified date in December
will be deemed to have been received by shareholders on December 31 for tax
purposes if paid during January the following year. Dividends paid by a Fund
from net investment income and distributions from net short-term capital gains
in excess of any net long-term capital losses, whether received in cash or
reinvested, generally will be taxable as ordinary income. Distributions
received from a Fund designated as long-term capital gains (net of capital
losses), whether received in cash or reinvested, will be taxable as long-term
capital gains without regard to the length of time a shareholder has owned
shares in the Fund. Any loss on the redemption or other sale or exchange of a
Fund's shares held for six months or less will be treated as a long-term capital
loss to the extent of any long-term capital gain distribution received on the
shares. A portion of the dividends (but not capital gains distributions) paid
by a Fund may be eligible for the dividends received deduction for corporate
shareholders to the extent that the Fund's income consists of dividends paid by
United States corporations. If a shareholder is exempt from Federal income tax,
the shareholder will not generally be taxed on amounts distributed by a Fund.
Dividends and interest received by the Funds on foreign securities may
give rise to withholding and other taxes imposed by foreign countries. It is
expected that foreign taxes paid by the Funds will be treated as expenses of the
Funds. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes.
At certain levels of taxable income, the Internal Revenue Code
provides a preferential tax rate for long-term capital gains. Long-term capital
gains of taxpayers other than corporations are taxed at a 28% maximum rate,
whereas ordinary income is taxed at a 39.6% maximum rate. Capital losses
continue to be deductible only against capital gains plus (in the case of
taxpayers other than corporations) $3,000 of ordinary income annually ($1,500
for married individuals filing separately).
Some shareholders may be subject to 31% "backup withholding" on
dividends, capital gains distributions and redemption payments made by a Fund.
Backup withholding generally will apply to shareholders who fail to provide a
Fund with their correct taxpayer identification number or to make required
certifications. Backup withholding is not an additional
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tax. Any amounts withheld may be credited against a shareholder's U.S. Federal
income tax liability.
The foregoing is only a brief summary of the Federal income tax
considerations affecting the Funds and their shareholders. Accordingly,
potential investors should consult their tax advisors with specific reference to
their own tax situation.
16. ADDITIONAL INFORMATION
The Berger 100 Fund and Berger Growth and Income Fund are separate
corporations which were incorporated under the laws of the State of Maryland on
March 10, 1966, as "The One Hundred Fund, Inc." and "The One Hundred and One
Fund, Inc.", respectively. The names "Berger One Hundred Fund-Registered
Trademark-" and "Berger 100 Fund-Registered Trademark-" were adopted by the
Berger 100 Fund as service marks and trade names in November 1989. In 1990, the
shareholders of the Berger Growth and Income Fund approved changing its formal
corporate name to "Berger One Hundred and One Fund, Inc." and the Fund began
doing business under the trade name "Berger Growth and Income Fund, Inc." in
January 1996.
Each of the Berger 100 Fund and the Berger Growth and Income Fund has
only one class of securities, its Capital Stock, with a par value of one cent
per share, of which 200,000,000 shares are authorized for issue by the
Berger 100 Fund and 100,000,000 shares are authorized for issue by the
Berger Growth and Income Fund. Shares of the Funds are fully paid and
nonassessable when issued. All shares issued by a Fund participate equally in
dividends and other distributions by the Fund, and in the residual assets of the
Fund in the event of its liquidation.
The Berger Small Company Growth Fund and the Berger New Generation
Fund are separate series or portfolios established under the Berger Investment
Portfolio Trust, a Delaware business trust. The Berger Small Company Growth
Fund was established on August 23, 1993. The name "Berger Small Company Growth
Fund-Registered Trademark-" was registered as a service mark in September 1995.
The Berger New Generation Fund was established on December 21, 1995. The Trust
is authorized to issue an unlimited number of shares of beneficial interest in
series or portfolios. Currently, the Berger Small Company Growth Fund and the
Berger New Generation Fund are the only series established under the Trust,
although others may be added in the future. Shares of the Funds are fully paid
and nonassessable when issued. Each share has a par value of $.01. All shares
issued by each Fund participate equally in dividends and other distributions by
the Fund, and in the residual assets of the Fund in the event of its
liquidation.
Shareholders of the Berger 100 Fund and the Berger Growth and Income
Fund vote separately on matters relating to those respective Funds.
Shareholders of the Berger Small Company Growth Fund and the Berger New
Generation Fund generally vote separately on matters relating to those
respective Funds, although they will vote together and along with the
shareholders of other series of the Trust issued in the future in the election
of trustees of the Trust and on all matters relating to the Trust as a whole.
Each full share of each Fund has one vote. Shares of each Fund have non-
cumulative voting rights, which means that the holders of
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more than 50% of the shares voting for the election of directors or trustees can
elect 100% of the directors or trustees if they choose to do so and, in such
event, the holders of the remaining less than 50% of the shares voting for the
election of directors or trustees will not be able to elect any person or
persons as directors or trustees. None of the Funds is required to hold annual
shareholder meetings unless required by the Investment Company Act of 1940 or
other applicable law or unless called by the directors or trustees.
If shareholders owning at least 10% of the outstanding shares of the
Berger 100 Fund, the Berger Growth and Income Fund or the Berger Investment
Portfolio Trust so request, a special shareholders' meeting will be held for the
purpose of considering the removal of a director of a Fund or a trustee of the
Trust, as the case may be. Special meetings will be held for other purposes if
the holders of at least 25% of the outstanding shares of a Fund or the Trust so
request. Subject to certain limitations, the Funds will facilitate appropriate
communications by shareholders desiring to call a special meeting for the
purpose of considering the removal of a director or a trustee.
The Funds' transfer agent and dividend disbursing agent is Investors
Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas City, MO 64105.
IFTC has engaged DST Systems, Inc., as sub-agent to provide transfer agency and
dividend disbursing services for the Funds. Accordingly, the address and
telephone number for DST Systems, Inc., set forth in this Prospectus should be
used for correspondence with the Funds' transfer agent.
17. PERFORMANCE
From time to time in advertisements, the Funds may discuss their
performance ratings as published by recognized mutual fund statistical services,
such as Lipper Analytical Services, Inc., CDA Investment Technologies, Inc., or
Morningstar, Inc., or Value Line Investment Survey or by publications of general
interest such as THE WALL STREET JOURNAL, INVESTOR'S BUSINESS DAILY, BARRON'S,
FINANCIAL WORLD or KIPLINGER'S PERSONAL FINANCE MAGAZINE. In addition, the
Funds may compare their performance to that of recognized broad-based securities
market indices, including the Standard & Poor's 500 Stock Index, the Dow Jones
Industrial Average, the Russell 2000 Stock Index, the Standard & Poor's 600
Small Cap Index or the Nasdaq Composite Index, or more narrowly-based indices
which reflect the market sectors in which that Fund invests.
The total return of each Fund is calculated for any specified period
of time by assuming the purchase of shares of the Fund at the net asset value at
the beginning of the period. Each dividend or other distribution paid by the
Fund is assumed to have been reinvested at the net asset value on the
reinvestment date. The total number of shares then owned as a result of this
process is valued at the net asset value at the end of the period. The
percentage increase is determined by subtracting the initial value of the
investment from the ending value and dividing the remainder by the initial
value.
Each Fund's total return reflects the Fund's performance over a stated
period of time. An average annual total return reflects the hypothetical
annually compounded return that would have produced the same total return if the
Fund's performance had been constant over the
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entire period. Total return figures are based on the overall change in value of
a hypothetical investment in each Fund. Because average annual total returns
for more than one year tend to smooth out variations in a Fund's return,
investors should recognize that such figures are not the same as actual year-by-
year results.
Any performance figures for the Funds are based upon historical
results and do not assure future performance. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
Shareholders with questions should write to the Berger Funds,
c/o Berger Associates, Inc., P.O. Box 5005, Denver, CO 80217, or call
1-303-329-0200 or 1-800-333-1001.
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STATEMENT OF ADDITIONAL INFORMATION
BERGER ONE HUNDRED FUND, INC.
BERGER GROWTH AND INCOME FUND
BERGER SMALL COMPANY GROWTH FUND
BERGER NEW GENERATION FUND
SHAREHOLDER SERVICES: 1-800-551-5849
This Statement of Additional Information about The One Hundred Fund, Inc.,
doing business as Berger One Hundred Fund, Inc. ("Berger 100 Fund"), Berger One
Hundred and One Fund, Inc., doing business as Berger Growth and Income Fund,
Inc. ("Berger Growth and Income Fund"), Berger Small Company Growth Fund and
Berger New Generation Fund (all of such funds together being sometimes referred
to as the "Funds") is not a prospectus. It should be read in conjunction with
the Prospectus describing the Funds, dated November 28, 1996, which may be
obtained by writing the Funds at P.O. Box 5005, Denver, Colorado 80217, or
calling 1-800-333-1001.
The Funds are all no-load mutual funds. This Statement of Additional
Information describes each of these Funds which have many features in common,
but have different investment objectives and different investment emphases.
BERGER 100 FUND-Registered Trademark- - The Berger 100 Fund's investment
objective is long-term capital appreciation. The Berger 100 Fund seeks to
achieve this objective by investing primarily in common stocks of established
companies which the Fund believes offer favorable growth prospects.
BERGER GROWTH AND INCOME FUND - The primary investment objective of the Berger
Growth and Income Fund is capital appreciation. A secondary objective is to
provide a moderate level of current income. The Fund seeks to achieve these
objectives by investing primarily in common stocks and other securities, such as
convertible securities or preferred stocks, which the Fund believes offer
favorable growth prospects and are expected to also provide current income.
BERGER SMALL COMPANY GROWTH FUND-Registered Trademark- - The investment
objective of the Berger Small Company Growth Fund is capital appreciation. The
Fund seeks to achieve this objective by investing primarily in equity securities
(including common and preferred stocks, convertible debt securities and other
securities having equity features) of small growth companies with market
capitalization of less than $1 billion at the time of initial purchase.
BERGER NEW GENERATION FUND - The investment objective of the Berger New
Generation Fund is capital appreciation. The Fund pursues this objective by
investing primarily in equity securities (including common and preferred stocks,
convertible debt securities and other securities having equity features) of
companies which the Fund's advisor believes have the potential for significant
growth. In particular, the Fund's advisor seeks to identify companies which
develop, manufacture, sell or provide new or innovative products, services or
methods of doing business that it believes have the potential to change the
direction or dynamics of the industries in which they operate or to
significantly influence the way businesses or consumers conduct their affairs.
NOVEMBER 28, 1996
<PAGE>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
Cross-References to
Related Disclosures
Table of Contents in Prospectus
----------------- -------------------
Introduction Section 2
1. Portfolio Policies of the Funds Section 3, 4, 5
2. Investment Restrictions Section 4
3. Management of the Funds Section 6
4. Investment Advisor Section 6
5. Expenses of the Funds Section 7, 8
6. Brokerage Policy Section 8
7. How to Purchase Shares in Section 9
the Funds
8. How the Net Asset Value is Section 10
Determined
9. Income Dividends, Capital Gains Section 15
Distributions and Tax Treatment
10. Suspension of Redemption Rights Section 12
11. Tax-Sheltered Retirement Plans Section 14
12. Special Purchase and Exchange Plans Section 13
13. Performance Information Section 17
14. Additional Information Section 16
Financial Statements
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INTRODUCTION
The Berger 100 Fund, the Berger Growth and Income Fund, the Berger Small
Company Growth Fund and the Berger New Generation Fund are Mutual Funds, or
open-end, diversified, management investment companies. The Berger 100 Fund's
investment objective is long-term capital appreciation. The primary investment
objective of the Berger Growth and Income Fund is capital appreciation, and its
secondary objective is to provide a moderate level of current income. The
investment objective of both the Berger Small Company Growth Fund and the Berger
New Generation Fund is capital appreciation.
1. PORTFOLIO POLICIES OF THE FUNDS
The Prospectus discusses the investment objective of each of the Funds and
the policies to be employed to achieve that objective. This section contains
supplemental information concerning the types of securities and other
instruments in which the Funds may invest, the investment policies and portfolio
strategies that the Funds may utilize and certain risks attendant to those
investments, policies and strategies.
ILLIQUID AND RESTRICTED SECURITIES. Each of the Funds is authorized to
invest in securities which are illiquid or not readily marketable because they
are subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities, no ready
market is available. However, none of the Funds will purchase any such
security, the purchase of which would cause the Fund to invest more than 15% of
its net assets, measured at the time of purchase, in illiquid securities.
Investments in illiquid securities involve certain risks to the extent that a
Fund may be unable to dispose of such a security at the time desired or at a
reasonable price or, in some cases, may be unable to dispose of it at all. In
addition, in order to resell a restricted security, a Fund might have to incur
the potentially substantial expense and delay associated with effecting
registration. If securities become illiquid following purchase or other
circumstances cause more than 15% of a Fund's net assets to be invested in
illiquid securities, the directors or trustees of that Fund, in consultation
with the Fund's advisor, will determine what action, if any, is appropriate in
light of all relevant circumstances.
Repurchase agreements maturing in more than seven days will be considered
as illiquid for purposes of this restriction. Pursuant to guidelines
established by the directors or trustees, the Funds' advisor will determine
whether securities eligible for resale to qualified institutional buyers
pursuant to SEC Rule 144A under the Securities Act of 1933 should be treated as
illiquid investments considering, among other things, the following factors:
(1) the frequency of trades and quotes for the security; (2) the number of
dealers wanting to purchase or sell the security and the number of other
potential purchasers; (3) dealer undertakings to
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make a market in the security; and (4) the nature of the security and the
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers, and the mechanics of the transfer). The liquidity of a
Fund's investments in Rule 144A securities could be impaired if qualified
institutional buyers become uninterested in purchasing these securities.
REPURCHASE AGREEMENTS. As discussed in the Prospectus, each Fund may
invest in repurchase agreements with various financial organizations, including
commercial banks, registered broker-dealers and registered government securities
dealers. A repurchase agreement is an agreement under which a Fund acquires a
debt security (generally a security issued or guaranteed by the U.S. government
or an agency thereof, a banker's acceptance or a certificate of deposit) from a
commercial bank, broker or dealer, subject to resale to the seller at an agreed
upon price and date (normally, the next business day). A repurchase agreement
may be considered a loan collateralized by securities. The resale price
reflects an agreed upon interest rate effective for the period the instrument is
held by a Fund and is unrelated to the interest rate on the underlying
instrument. In these transactions, the securities acquired by a Fund (including
accrued interest earned thereon) must have a total value equal to or in excess
of the value of the repurchase agreement and are held by the Fund's custodian
bank until repurchased. In addition, the directors or trustees will establish
guidelines and standards for review by the investment advisor of the
creditworthiness of any bank, broker or dealer party to a repurchase agreement
with a Fund. None of the Funds will enter into a repurchase agreement maturing
in more than seven days if as a result more than 15% of the Fund's total assets
would be invested in such repurchase agreements and other illiquid securities.
The use of repurchase agreements involves certain risks. For example, if
the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, a
Fund may incur a loss upon disposition of the security. If the other party to
the agreement becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by a Fund not within the control of
the Fund and therefore the realization by the Fund on such collateral may
automatically be stayed. Finally, it is possible that a Fund may not be able to
substantiate its interest in the underlying security and may be deemed an
unsecured creditor of the other party to the agreement. Although these risks
are acknowledged, it is expected that they can be controlled through careful
monitoring procedures.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Each Fund may purchase and
sell securities on a when-issued or delayed delivery basis. However, none of
the Funds currently intends to purchase or sell securities on a when-issued or
delayed delivery basis, if as a result more than 5% of its total assets taken at
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market value at the time of purchase would be invested in such securities.
When-issued or delayed delivery transactions arise when securities (normally,
equity obligations of issuers eligible for investment by a Fund) are purchased
or sold by the Fund with payment and delivery taking place in the future in
order to secure what is considered to be an advantageous price or yield.
However, the yield on a comparable security available when delivery takes place
may vary from the yield on the security at the time that the when-issued or
delayed delivery transaction was entered into. Any failure to consummate a
when-issued or delayed delivery transaction may result in a Fund missing the
opportunity of obtaining a price or yield considered to be advantageous.
When-issued and delayed delivery transactions may generally be expected to
settle within one month from the date the transactions are entered into, but in
no event later than 90 days. However, no payment or delivery is made by a Fund
until it receives delivery or payment from the other party to the transaction.
When a Fund purchases securities on a when-issued basis, it will maintain
in a segregated account with its custodian cash, U.S. government securities or
other liquid assets having an aggregate value equal to the amount of such
purchase commitments, until payment is made. If necessary, additional assets
will be placed in the account daily so that the value of the account will equal
or exceed the amount of the Fund's purchase commitments.
LENDING OF SECURITIES. As discussed in the Prospectus, the Berger Small
Company Growth Fund and the Berger New Generation Fund each may lend their
securities to qualified institutional investors who need to borrow securities in
order to complete certain transactions, such as covering short sales, avoiding
failures to deliver securities, or completing arbitrage operations. By lending
its securities, the Berger Small Company Growth Fund and the Berger New
Generation Fund will be attempting to generate income through the receipt of
interest on the loan which, in turn, can be invested in additional securities to
pursue the Fund's investment objective. Any gain or loss in the market price of
the securities loaned that might occur during the term of the loan would be for
the account of the Fund. The Fund may lend its portfolio securities to
qualified brokers, dealers, banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940, or the Rules and
Regulations or interpretations of the Securities and Exchange Commission (the
"Commission") thereunder, which currently require that (a) the borrower pledge
and maintain with the Fund collateral consisting of cash, an irrevocable letter
of credit or securities issued or guaranteed by the United States government
having a value at all times not less than 100% of the value of the securities
loaned, (b) the borrower add to such collateral whenever the price of the
securities loaned rises (i.e., the borrower "marks to the market" on a daily
basis), (c) the loan be made subject to termination by the Fund at any time and
(d) the Fund receive reasonable interest on the loan, which interest may include
the Fund's investing cash
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collateral in interest bearing short-term investments, and (e) the Fund receive
all dividends and distributions on the loaned securities and any increase in the
market value of the loaned securities.
The Berger Small Company Growth Fund and the Berger New Generation Fund
bear a risk of loss in the event that the other party to a securities lending
transaction defaults on its obligations and the Fund is delayed in or prevented
from exercising its rights to dispose of the collateral, including the risk of a
possible decline in the value of the collateral securities during the period in
which the Fund seeks to assert these rights, the risk of incurring expenses
associated with asserting these rights and the risk of losing all or a part of
the income from the transaction. Neither Fund will lend its portfolio
securities if, as a result, the aggregate value of such loans would exceed
33-1/3% of the value of the Fund's total assets. Loan arrangements made by a
Fund will comply with all other applicable regulatory requirements, including
the rules of the New York Stock Exchange, which rules presently require the
borrower, after notice, to redeliver the securities within the normal settlement
time of three business days. All relevant facts and circumstances, including
creditworthiness of the broker, dealer or institution, will be considered in
making decisions with respect to the lending of securities, subject to review by
the Fund's trustees.
SHORT SALES. Each Fund currently only intends to engage in short sales if,
at the time of the short sale, the Fund owns or has the right to acquire an
equivalent kind and amount of the security being sold short at no additional
cost (i.e., short sales "against the box").
In a short sale, the seller does not immediately deliver the securities
sold and is said to have a short position in those securities until delivery
occurs. To make delivery to the purchaser, the executing broker borrows the
securities being sold short on behalf of the seller. While the short position
is maintained, the seller collateralizes its obligation to deliver the
securities sold short in an amount equal to the proceeds of the short sale plus
an additional margin amount established by the Board of Governors of the Federal
Reserve. If a Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain in a segregated custodial account an amount of securities convertible
into or exchangeable for such equivalent securities at no additional cost.
These securities would constitute the Fund's long position.
A Fund may make a short sale, as described above, when it wants to sell the
security it owns at a current attractive price, but also wishes to defer
recognition of gain or loss for Federal income tax purposes and for purposes of
satisfying certain tests applicable to regulated investment companies under the
Internal Revenue Code. In such a case, any future losses in the Fund's long
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position should be reduced by a gain in the short position. The extent to which
such gains or losses are reduced would depend upon the amount of the security
sold short relative to the amount the Fund owns. There will be certain
additional transaction costs associated with short sales, but the Fund will
endeavor to offset these costs with income from the investment of the cash
proceeds of short sales.
FINANCIAL FUTURES, FORWARDS AND OPTIONS. As described in the Prospectus,
each Fund is authorized to make limited use of certain types of futures,
forwards and options, but only for the purpose of hedging, that is, protecting
against market risk due to market movements that may adversely affect the value
of a Fund's securities or the price of securities that a Fund is considering
purchasing. The utilization of futures, forwards and options is also subject to
policies and procedures which may be established by the directors or trustees
from time to time. A hedging transaction may partially protect a Fund from a
decline in the value of a particular security or its portfolio generally,
although hedging may also limit a Fund's opportunity to profit from favorable
price movements, and the cost of the transaction will reduce the potential
return on the security or the portfolio. Following is additional information
concerning the futures, forwards and options in which the Funds may invest,
provided that no more than 5% of the Fund's net assets at the time the contract
is entered into may be used for initial margins for financial futures
transactions and premiums paid for the purchase of options. In addition, a Fund
may only write call options that are covered and only up to 25% of the Fund's
total assets. The following information should be read in conjunction with the
information concerning the Funds' use of futures, forwards and options and the
risks of such instruments contained in the Prospectus.
FUTURES CONTRACTS. Financial futures contracts are exchange-traded
contracts on financial instruments (such as securities and foreign
currencies) and securities indices that obligate the holder to take or make
delivery of a specified quantity of the underlying financial instrument, or
the cash value of an index, at a future date. Although futures contracts by
their terms call for the delivery or acquisition of the underlying
instruments or a cash payment based on the mark-to-market value of the
underlying instruments, in most cases the contractual obligation will be
offset before the delivery date by buying (in the case of an obligation to
sell) or selling (in the case of an obligation to buy) an identical futures
contract. Such a transaction cancels the original obligation to make or take
delivery of the instruments.
Each Fund may enter into contracts for the purchase or sale for future
delivery of financial instruments, such as securities and foreign currencies, or
contracts based on financial indices including indices of U.S. Government
securities, foreign government securities or equity securities. U.S. futures
contracts are traded on exchanges which have been designated "contract
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markets" by the Commodity Futures Trading Commission ("CFTC") and must be
executed through a futures commission merchant (an "FCM"), or brokerage firm,
which is a member of the relevant contract market. Through their clearing
corporations, the exchanges guarantee performance of the contracts as between
the clearing members of the exchange.
Both the buyer and seller are required to deposit "initial margin" for the
benefit of the FCM when a futures contract is entered into. Initial margin
deposits are equal to a percentage of the contract's value, as set by the
exchange on which the contract is traded, and may be maintained in cash or other
liquid assets. If the value of either party's position declines, that party
will be required to make additional "variation margin" payments to the other
party to settle the change in value on a daily basis. Initial and variation
margin payments are similar to good faith deposits or performance bonds or
party-to-party payments resulting from daily changes in the value of the
contract, unlike margin extended by a securities broker, and would be released
or credited to the Funds upon termination of the futures contract, assuming all
contractual obligations have been satisfied. Unlike margin extended by a
securities broker, initial and variation margin payments do not constitute
purchasing securities on margin for purposes of each Fund's investment
limitations. The Funds will incur brokerage fees when they buy or sell futures
contracts.
In the event of the bankruptcy of the FCM that holds margin on behalf of a
Fund, the Fund may be entitled to return of margin owed to the Fund only in
proportion to the amount received by the FCM's other customers. Each Fund will
attempt to minimize the risk by careful monitoring of the creditworthiness of
the FCMs with which the Fund does business and by depositing margin payments in
a segregated account with the Fund's custodian for the benefit of the FCM when
practical or otherwise required by law.
Each Fund intends to comply with guidelines of eligibility for exclusion
from the definition of the term "commodity pool operator" with the CFTC and the
National Futures Association, which regulate trading in the futures markets.
Accordingly, the Fund will not enter into any futures contract or option on a
futures contract if, as a result, the aggregate initial margin and premiums
required to establish such positions would exceed 5% of the Fund's net assets.
Although each Fund would hold cash and liquid assets in a segregated
account with a mark-to-market value sufficient to cover the Fund's open futures
obligations, the segregated assets would be available to the Fund immediately
upon closing out the futures position.
The acquisition or sale of a futures contract may occur, for example, when
a Fund is considering purchasing or holds equity securities and seeks to protect
itself from fluctuations in prices without buying or selling those securities.
For example, if prices
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were expected to decrease, the Fund might sell equity index futures contracts,
thereby hoping to offset a potential decline in the value of equity securities
in the portfolio by a corresponding increase in the value of the futures
contract position held by the Fund and thereby preventing the Fund's net asset
value from declining as much as it otherwise would have. A Fund also could
protect against potential price declines by selling portfolio securities and
investing in money market instruments. However, the use of futures contracts as
a hedging technique allows the Funds to maintain a defensive position without
having to sell portfolio securities.
Similarly, when prices of equity securities are expected to increase,
futures contracts may be bought to attempt to hedge against the possibility of
having to buy equity securities at higher prices. This technique is sometimes
known as an anticipatory hedge. Since the fluctuations in the value of futures
contracts should be similar to those of equity securities, a Fund could take
advantage of the potential rise in the value of equity securities without buying
them until the market has stabilized. At that time, the futures contracts could
be liquidated and the Fund could buy equity securities on the cash market.
The ordinary spreads between prices in the cash and futures markets, due to
differences in the nature of those markets, are subject to distortions. First,
all participants in the futures market are subject to initial margin and
variation margin requirements. Rather than meeting additional variation margin
requirements, investors may close out futures contracts through offsetting
transactions which could distort the normal price relationship between the cash
and futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced and prices in the futures market
distorted. Third, from the point of view of speculators, the margin deposit
requirements in the futures market are less than margin requirements in the
securities market. Therefore, increased participation by speculators in the
futures market may cause temporary price distortions. Due to the possibility of
the foregoing distortions, a correct forecast of general price trends by the
Funds still may not result in a successful use of futures.
Futures contracts entail additional risks. Although each Fund believes
that use of such contracts will benefit the Fund, if the Fund's investment
judgment is incorrect, the Fund's overall performance could be worse than if the
Fund had not entered into futures contracts. For example, if the Fund has
hedged against the effects of a possible decrease in prices of securities held
in the Fund's portfolio and prices increase instead, the Fund will lose part or
all of the benefit of the increased value of these securities because of
offsetting losses in the Fund's futures positions. In addition, if the Fund has
insufficient cash, it may
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have to sell securities from its portfolio to meet daily variation margin
requirements. Those sales may be, but will not necessarily be, at increased
prices which reflect the rising market and may occur at a time when the sales
are disadvantageous to the Fund. Although the buyer of an option cannot lose
more than the amount of the premium plus related transaction costs, a buyer or
seller of futures contracts could lose amounts substantially in excess of any
initial margin deposits made, due to the potential for adverse price movements
resulting in additional variation margin being required by such positions.
However, each Fund intends to monitor its investments closely and will attempt
to close its positions when the risk of loss to the Fund becomes unacceptably
high.
The prices of futures contracts depend primarily on the value of their
underlying instruments. Because there are a limited number of types of futures
contracts, it is possible that the standardized futures contracts available to a
Fund will not match exactly the Fund's current or potential investments. A Fund
may buy and sell futures contracts based on underlying instruments with
different characteristics from the securities in which it typically invests --
for example, by hedging investments in portfolio securities with a futures
contract based on a broad index of securities -- which involves a risk that the
futures position will not correlate precisely with the performance of the Fund's
investments.
Futures prices can also diverge from the prices of their underlying
instruments, even if the underlying instruments closely correlate with a Fund's
investments. Futures prices are affected by such factors as current and
anticipated short-term interest rates, changes in volatility of the underlying
instruments and the time remaining until expiration of the contract. Those
factors may affect securities prices differently from futures prices. Imperfect
correlations between a Fund's investments and its futures positions may also
result from differing levels of demand in the futures markets and the securities
markets, from structural differences in how futures and securities are traded,
and from imposition of daily price fluctuation limits for futures contracts. A
Fund may buy or sell futures contracts with a greater or lesser value than the
securities it wishes to hedge or is considering purchasing in order to attempt
to compensate for differences in historical volatility between the futures
contract and the securities, although this may not be successful in all cases.
If price changes in a Fund's futures positions are poorly correlated with its
other investments, its futures positions may fail to produce desired gains or
result in losses that are not offset by the gains in the Fund's other
investments.
Because futures contracts are generally settled within a day from the date
they are closed out, compared with a longer settlement period for most types of
securities, the futures markets can provide superior liquidity to the securities
markets. Nevertheless, there is no assurance a liquid secondary market will
exist for any particular futures contract at any particular time.
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In addition, futures exchanges may establish daily price fluctuation limits for
futures contracts and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days when the
price fluctuation limit is reached, it may be impossible for a Fund to enter
into new positions or close out existing positions. If the secondary market for
a futures contract is not liquid because of price fluctuation limits or
otherwise, a Fund may not be able to promptly liquidate unfavorable futures
positions and potentially could be required to continue to hold a futures
position until the delivery date, regardless of changes in its value. As a
result, a Fund's access to other assets held to cover its futures positions also
could be impaired.
OPTIONS ON FUTURES CONTRACTS. Each Fund may buy and write options on
futures contracts for hedging purposes. An option on a futures contract gives
the Funds the right (but not the obligation) to buy or sell a futures contract
at a specified price on or before a specified date. The purchase of a call
option on a futures contract is similar in some respects to the purchase of a
call option on an individual security. Depending on the pricing of the option
compared to either the price of the futures contract upon which it is based or
the price of the underlying instrument, ownership of the option may or may not
be less risky than ownership of the futures contract or the underlying
instrument. As with the purchase of futures contracts, a Fund may buy a call
option on a futures contract to hedge against a market advance, and a Fund might
buy a put option on a futures contract to hedge against a market decline.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the call option is below the exercise price,
a Fund will retain the full amount of the option premium which provides a
partial hedge against any decline that may have occurred in the Fund's portfolio
holdings. If a call option a Fund has written is exercised, the Fund will incur
a loss which will be reduced by the amount of the premium it received.
Depending on the degree of correlation between change in the value of its
portfolio securities and changes in the value of the futures positions, a Fund's
losses from existing options on futures may to some extent be reduced or
increased by changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put options on portfolio securities. For
example, a Fund may buy a put option on a futures contract to hedge the Fund's
portfolio against the risk of falling prices.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus
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related transaction costs. In addition to the correlation risks discussed
above, the purchase of an option also entails the risk that changes in the value
of the underlying futures contract will not be fully reflected in the value of
the options bought.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward contract is a
privately negotiated agreement between two parties in which one party is
obligated to deliver a stated amount of a stated asset at a specified time in
the future and the other party is obligated to pay a specified invoice amount
for the assets at the time of delivery. The Funds currently intend that they
will only use forward contracts or commitments for hedging purposes and will
only use forward foreign currency exchange contracts, although the Funds may
enter into additional forms of forward contracts or commitments in the future if
they become available and advisable in light of the Funds' objectives and
investment policies. Forward contracts generally are negotiated in an interbank
market conducted directly between traders (usually large commercial banks) and
their customers. Unlike futures contracts, which are standardized
exchange-traded contracts, forward contracts can be specifically drawn to meet
the needs of the parties that enter into them. The parties to a forward
contract may agree to offset or terminate the contract before its maturity, or
may hold the contract to maturity and complete the contemplated exchange.
The following discussion summarizes the Funds' principal uses of forward
foreign currency exchange contracts ("forward currency contracts"). A Fund may
enter into forward currency contracts with stated contract values of up to the
value of the Fund's assets. A forward currency contract is an obligation to buy
or sell an amount of a specified currency for an agreed price (which may be in
U.S. dollars or a foreign currency) on a specified date. A Fund will exchange
foreign currencies for U.S. dollars and for other foreign currencies in the
normal course of business and may buy and sell currencies through forward
currency contracts in order to fix a price (in terms of a specified currency)
for securities it has agreed to buy or sell ("transaction hedge"). A Fund also
may hedge some or all of its investments denominated in foreign currency against
a decline in the value of that currency (or a proxy currency whose price
movements are expected to have a high degree of correlation with the currency
being hedged) relative to the U.S. dollar by entering into forward currency
contracts to sell an amount of that currency approximating the value of some or
all of its portfolio securities denominated in that currency ("position hedge")
or by participating in futures contracts (or options on such futures) with
respect to the currency. A Fund also may enter into a forward currency contract
with respect to a currency where the Fund is considering the purchase or sale of
investments denominated in that currency but has not yet selected the specific
investments ("anticipatory hedge"). In any of these circumstances a Fund may,
alternatively, enter into a forward currency contract to purchase or sell a
foreign currency whose performance is expected to replicate the performance of
the currency being hedged if the portfolio manager believes there is a
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high degree of correlation between movements in the two currencies
("cross-hedge").
These types of hedging minimize the effect of currency appreciation as well
as depreciation, but do not eliminate fluctuations in the underlying U.S. dollar
equivalent value of the proceeds of or rates of return on a Fund's foreign
currency denominated portfolio securities. The matching of the increase in
value of a forward contract and the decline in the U.S. dollar equivalent value
of the foreign currency denominated asset that is the subject of the hedge
generally will not be precise. Shifting a Fund's currency exposure from one
foreign currency to another limits that Fund's opportunity to profit from
increases in the value of the original currency and involves a risk of increased
losses to such Fund if its portfolio manager's projection of future exchange
rates is inaccurate. Unforeseen changes in currency prices may result in poorer
overall performance for a Fund than if it had not entered into such contracts.
The Funds will cover outstanding forward currency contracts by maintaining
liquid portfolio securities denominated in the currency underlying the forward
contract or the currency being hedged. To the extent that a Fund is not able to
cover its forward currency positions with underlying portfolio securities, the
Funds' custodian will segregate cash or liquid assets having a value equal to
the aggregate amount of such Fund's commitments under forward contracts entered
into. If the value of the securities used to cover a position or the value of
segregated assets declines, the Fund must find alternative cover or segregate
additional cash or liquid assets on a daily basis so that the value of the
covered and segregated assets will be equal to the amount of a Fund's
commitments with respect to such contracts.
While forward contracts are not currently regulated by the CFTC, the CFTC
may in the future assert authority to regulate forward contracts. In such
event, the Funds' ability to utilize forward contracts may be restricted. A
Fund may not always be able to enter into forward contracts at attractive prices
and may be limited in its ability to use these contracts to hedge Fund assets.
In addition, when a Fund enters into a privately negotiated forward contract
with a counterparty, the Fund assumes counterparty credit risk, that is, the
risk that the counterparty will fail to perform its obligations, in which case
the Fund could be worse off than if the contract had not been entered into.
Unlike many exchange-traded futures contracts and options on futures, there are
no daily price fluctuation limits with respect to forward contracts and other
negotiated or over-the-counter instruments, and with respect to those contracts,
adverse market movements could therefore continue to an unlimited extent over a
period of time. However, each Fund intends to monitor its investments closely
and will attempt to renegotiate or close its positions when the risk of loss to
the Fund becomes unacceptably high.
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OPTIONS ON SECURITIES AND SECURITIES INDICES. A Fund may buy or sell put
or call options and write covered call options on securities that are traded on
United States or foreign securities exchanges or over-the-counter. Buying an
option involves the risk that, during the option period, the price of the
underlying security will not increase (in the case of a call) to above the
exercise price, or will not decrease (in the case of a put) to below the
exercise price, in which case the option will expire without being exercised and
the holder would lose the amount of the premium. Writing a call option involves
the risk of an increase in the market value of the underlying security, in which
case the option could be exercised and the underlying security would then be
sold by a Fund to the option holder at a lower price than its current market
value and the Fund's potential for capital appreciation on the security would be
limited to the exercise price. Moreover, when a Fund writes a call option on a
securities index, the Fund bears the risk of loss resulting from imperfect
correlation between movements in the price of the index and the price of the
securities set aside to cover such position. Although they entitle the holder
to buy equity securities, call options to purchase equity securities do not
entitle the holder to dividends or voting rights with respect to the underlying
securities, nor do they represent any rights in the assets of the issuer of
those securities.
A call option written by a Fund is "covered" if the Fund owns the
underlying security covered by the call or has an absolute and immediate right
to acquire that security without additional cash consideration (or for
additional cash consideration held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio. A call
option is also deemed to be covered if a Fund holds a call on the same security
and in the same principal amount as the call written and the exercise price of
the call held (i) is equal to or less than the exercise price of the call
written or (ii) is greater than the exercise price of the call written if the
difference is maintained by the Fund in liquid assets in a segregated account
with its custodian.
The writer of a call option may have no control when the underlying
securities must be sold. Whether or not an option expires unexercised, the
writer retains the amount of the premium. This amount, of course, may, in the
case of a covered call option, be offset by a decline in the market value of the
underlying security during the option period.
The writer of an exchange-traded call option that wishes to terminate its
obligation may effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written. The
effect of the purchase is that the writer's position will be cancelled by the
clearing corporation. If a Fund desires to sell a particular security from the
Fund's portfolio on which the Fund has written a call option, the Fund will
effect a closing transaction prior to or
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concurrent with the sale of the security. However, a writer may not effect a
closing purchase transaction after being notified of the exercise of an option.
An investor who is the holder of an exchange-traded option may liquidate its
position by effecting a "closing sale transaction." This is accomplished by
selling an option of the same series as the option previously bought. There is
no guarantee that either a closing purchase or a closing sale transaction can be
effected.
A Fund will realize a profit from a closing transaction if the price of the
purchase transaction is less than the premium received from writing the option
or the price received from a sale transaction is more than the premium paid to
buy the option; the Fund will realize a loss from a closing transaction if the
price of the purchase transaction is more than the premium received from writing
the option or the price received from a sale transaction is less than the
premium paid to buy the option. Because increases in the market price of a call
option will generally reflect increases in the market price of the underlying
security, any loss resulting from the repurchase of a call option is likely to
be offset in whole or in part by appreciation of the underlying security owned
by the Fund.
An option position may be closed out only where there exists a secondary
market for an option of the same series. If a secondary market does not exist,
it might not be possible to effect closing transactions in particular options
with the result that a Fund would have to exercise the options in order to
realize any profit. If a Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or the Fund delivers the underlying security
upon exercise. Reasons for the absence of a liquid secondary market may include
the following: (i) there may be insufficient trading interest in certain
options, (ii) restrictions may be imposed by a national securities exchange on
which the option is traded ("Exchange") on opening or closing transactions or
both, (iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options or underlying securities,
(iv) unusual or unforeseen circumstances may interrupt normal operations on an
Exchange, (v) the facilities of an Exchange or of the Options Clearing
Corporation ("OCC") may not at all times be adequate to handle current trading
volume, or (vi) one or more Exchanges could, for economic or other reasons,
decide or be compelled at some future date to discontinue the trading of options
(or a particular class or series of options), in which event the secondary
market on that Exchange (or in that class or series of options) would cease to
exist, although outstanding options on that Exchange that had been issued by the
OCC as a result of trades on that Exchange would continue to be exercisable in
accordance with their terms.
In addition, when a Fund enters into an over-the-counter option contract
with a counterparty, the Fund assumes counterparty credit risk, that is, the
risk that the counterparty will fail to
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perform its obligations, in which case the Fund could be worse off than if the
contract had not been entered into.
An option on a securities index is similar to an option on a security
except that, rather than the right to take or make delivery of a security at a
specified price, an option on a securities index gives the holder the right to
receive, on exercise of the option, an amount of cash if the closing level of
the securities index on which the option is based is greater than, in the case
of a call, or less than, in the case of a put, the exercise price of the option.
A Fund may buy call options on securities or securities indices to hedge
against an increase in the price of a security or securities that the Fund may
buy in the future. The premium paid for the call option plus any transaction
costs will reduce the benefit, if any, realized by a Fund upon exercise of the
option, and, unless the price of the underlying security or index rises
sufficiently, the option may expire and become worthless to the Fund. A Fund
may buy put options to hedge against a decline in the value of a security or its
portfolio. The premium paid for the put option plus any transaction costs will
reduce the benefit, if any, realized by a Fund upon exercise of the option, and,
unless the price of the underlying security or index declines sufficiently, the
option may expire and become worthless to the Fund.
An example of a hedging transaction using an index option would be if a
Fund were to purchase a put on a stock index, in order to protect the Fund
against a decline in the value of all securities held by it to the extent that
the stock index moves in a similar pattern to the prices of the securities held.
While the correlation between stock indices and price movements of the stocks in
which the Funds will generally invest may be imperfect, the Funds expect,
nonetheless, that the use of put options that relate to such indices will, in
certain circumstances, protect against declines in values of specific portfolio
securities or a Fund's portfolio generally. Although the purchase of a put
option may partially protect a Fund from a decline in the value of a particular
security or its portfolio generally, the cost of a put will reduce the potential
return on the security or the portfolio.
PORTFOLIO TURNOVER. The portfolio turnover rates of each of the Funds are
shown in the tables under Financial Highlights in Section 2 of the Prospectus.
The annual portfolio turnover rates of the Funds at times have exceeded 100%. A
100% annual turnover rate results, for example, if the equivalent of all of the
securities in the Fund's portfolio are replaced in a period of one year. A 100%
turnover rate is higher than the turnover rate experienced by most mutual funds.
The Funds anticipate that their portfolio turnover rates in future years may
exceed 100%, and investment changes will be made whenever management deems them
appropriate even if this results in a higher portfolio turnover rate. In
addition, portfolio turnover may increase as a result of large amounts of
purchases and redemptions of shares of the Funds
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due to economic, market or other factors that are not within the control of
management.
Increased portfolio turnover would necessarily result in correspondingly
higher brokerage costs for the Funds. The existence of a high portfolio
turnover rate has no direct relationship to the tax liability of a Fund,
although sales of certain stocks will lead to realization of gains, and,
possibly, increased taxable distributions. The Funds' brokerage policy is
discussed further under Section 6 Brokerage Policy, and additional information
concerning income taxes is located under Section 15 Income Dividends, Capital
Gains Distributions and Tax Treatment.
2. INVESTMENT RESTRICTIONS
Each Fund has adopted certain fundamental restrictions on its investments
and other activities, and none of these restrictions may be changed without the
approval of (i) 67% or more of the voting securities of the Fund present at a
meeting of shareholders thereof if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy, or (ii) more
than 50% of the outstanding voting securities of the Fund.
BERGER 100 FUND-Registered Trademark- AND BERGER GROWTH AND INCOME FUND
The following fundamental restrictions apply to each of the Berger 100 Fund
and the Berger Growth and Income Fund. A Fund may not:
1. Purchase the securities of any one issuer (except U.S. Government
securities) if immediately after and as a result of such purchase (a) the value
of the holdings of the Fund in the securities of such issuer exceeds 5% of the
value of the Fund's total assets or (b) the Fund owns more than 10% of the
outstanding voting securities or of any class of securities of such issuer.
2. Purchase securities of any company with a record of less than three
years' continuous operation (including that of predecessors) if such purchase
would cause the Fund's investments in all such companies taken at cost to exceed
5% of the value of the Fund's total assets.
3. Invest in any one industry more than 25% of the value of its total
assets at the time of such investment.
4. Make loans, except that the Fund may enter into repurchase agreements
in accordance with the Fund's investment policies. The Fund does not, for this
purpose, consider the purchase of all or a portion of an issue of publicly
distributed bonds, bank loan participation agreements, bank certificates of
deposit, bankers' acceptances, debentures or other securities, whether or not
the purchase is made upon the original issuance of the securities, to be the
making of a loan.
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5. Borrow in excess of 5% of the value of its total assets, or pledge,
mortgage, or hypothecate its assets taken at market value to an extent greater
than 10% of the Fund's total assets taken at cost (and no borrowing may be
undertaken except from banks as a temporary measure for extraordinary or
emergency purposes). This limitation shall not prohibit or restrict short sales
or deposits of assets to margin or guarantee positions in futures, options or
forward contracts, or the segregation of assets in connection with any of such
transactions.
6. Purchase or retain the securities of any issuer if those officers and
directors of the Fund or its investment advisor owning individually more than
1/2 of 1% of the securities of such issuer together own more than 5% of the
securities of such issuer.
7. Purchase the securities of any other investment company, except by
purchase in the open market involving no commission or profit to a sponsor or
dealer (other than the customary broker's commission).
8. Act as a securities underwriter (except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933 in disposing of a
security) or invest in real estate (although it may purchase shares of a real
estate investment trust), or invest in commodities or commodity contracts
except, only for the purpose of hedging, (i) financial futures transactions,
including futures contracts on securities, securities indices and foreign
currencies, and options on any such futures, (ii) forward foreign currency
exchange contracts and other forward commitments and (iii) securities index put
or call options.
9. Participate on a joint or joint and several basis in any securities
trading account.
10. Invest in companies for the purposes of exercising control of
management.
In applying the industry concentration investment restriction (no. 3
above), the Funds use the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated. Further, in
implementing that restriction, each Fund intends not to invest in any one
industry 25% or more of the value of its total assets at the time of such
investment.
The directors have adopted additional non-fundamental investment
restrictions for each of the Berger 100 Fund and the Berger Growth and Income
Fund. These limitations may be changed by the directors without a shareholder
vote. The non-fundamental investment restrictions include the following:
1. Only for the purpose of hedging, the Fund may purchase and sell
financial futures, forward foreign currency exchange contracts and put and call
options, but no more than 5% of the Fund's net assets at the time of purchase
may be invested in
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initial margins for financial futures transactions and premiums for options.
The Fund may only write call options that are covered and only up to 25% of the
Fund's total assets.
2. The Fund may not purchase or sell securities on a when-issued or
delayed delivery basis, if as a result more than 5% of its total assets taken at
market value at the time of purchase would be invested in such securities.
3. The Fund may not purchase or sell any interest in an oil, gas or
mineral development or exploration program, including investments in oil, gas or
other mineral leases, rights or royalty contracts (except that the Fund may
invest in the securities of issuers engaged in the foregoing activities).
4. The Fund may not purchase any security, including any repurchase
agreement maturing in more than seven days, which is not readily marketable, if
more than 15% of the net assets of the Fund, taken at market value at the time
of purchase would be invested in such securities.
5. The Fund may not purchase securities on margin from a broker or
dealer, except that the Fund may obtain such short-term credits as may be
necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short sales
"against the box"). This limitation shall not prohibit or restrict the Fund
from entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.
6. The Fund's investments in warrants valued at the lower of cost or
market, may not exceed 5% of the value of the Fund's net assets. Included
within that amount, but not to exceed 2% of the value of the Fund's net assets,
may be warrants that are not listed on the New York Stock Exchange or American
Stock Exchange. Warrants acquired by the Fund in units or attached to
securities are not subject to these limits.
Each of the Berger 100 Fund and the Berger Growth and Income Fund has
undertaken to the State of California that the Fund will buy, write and sell put
and call options that are traded over-the-counter only with broker/dealers that
are experienced with such transactions and that have a total net capital in
excess of $20,000,000.
Each of the Berger 100 Fund and the Berger Growth and Income Fund has
undertaken to the State of Arkansas that the Fund will not invest more than 10%
of its net assets in illiquid securities (defined as a security that cannot be
sold in the ordinary course of business within seven days at approximately the
value at which the Fund has valued the security), excluding
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restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933 that have been determined to be liquid by the Fund's
directors based upon the trading markets for the securities.
BERGER SMALL COMPANY GROWTH FUND-Registered Trademark- AND BERGER NEW GENERATION
FUND
The following fundamental restrictions apply to the Berger Small Company
Growth Fund and the Berger New Generation Fund. The Fund may not:
1. With respect to 75% of the Fund's total assets, purchase the
securities of any one issuer (except U.S. government securities) if immediately
after and as a result of such purchase (a) the value of the holdings of the Fund
in the securities of such issuer exceeds 5% of the value of the Fund's total
assets or (b) the Fund owns more than 10% of the outstanding voting securities
of such issuer.
2. Invest in any one industry (other than U.S. government securities)
more than 25% (25% or more, in the case of the Berger New Generation Fund) of
the value of its total assets at the time of such investment.
3. Borrow money, except from banks for temporary or emergency purposes in
amounts not to exceed 25% of the Fund's total assets (including the amount
borrowed) taken at market value, nor pledge, mortgage or hypothecate its assets,
except to secure permitted indebtedness and then only if such pledging,
mortgaging or hypothecating does not exceed 25% of the Fund's total assets taken
at market value. When borrowings exceed 5% of the Fund's total assets, the Fund
will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent the Fund may be
deemed an underwriter under the Securities Act of 1933 in disposing of a
security), issue senior securities (except to the extent permitted under the
Investment Company Act of 1940), invest in real estate (although it may purchase
shares of a real estate investment trust), or invest in commodities or commodity
contracts except financial futures transactions, futures contracts on securities
and securities indices and options on such futures, forward foreign currency
exchange contracts, forward commitments or securities index put or call options.
5. Make loans, except that the Fund may enter into repurchase agreements
and may lend portfolio securities in accordance with the Fund's investment
policies. The Fund does not, for this purpose, consider the purchase of all or
a portion of an issue of publicly distributed bonds, bank loan participation
agreements, bank certificates of deposit, bankers' acceptances, debentures or
other securities, whether or not the purchase is made upon the original issuance
of the securities, to be the making of a loan.
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In applying the industry concentration investment restriction (no. 2
above), the Fund uses the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated. Further, in
implementing that restriction, the Berger Small Company Growth Fund intends not
to invest in any one industry 25% or more of the value of its total assets at
the time of such investment.
The trustees have adopted additional non-fundamental investment
restrictions for the Berger Small Company Growth Fund and the Berger New
Generation Fund. These limitations may be changed by the trustees without a
shareholder vote. The non-fundamental investment restrictions include the
following:
1. The Fund may not purchase securities of any company which, including
its predecessors and parents, has a record of less than three years' continuous
operation, if such purchase would cause the Fund's investments in all such
companies taken at cost to exceed 10% (15% in the case of the Berger New
Generation Fund) of the value of the Fund's total assets.
2. The Fund may not purchase securities on margin from a broker or
dealer, except that the Fund may obtain such short-term credits as may be
necessary for the clearance of transactions, and may not make short sales of
securities, except that the Fund may make short sales if, at the time of the
short sale, the Fund owns or has the right to acquire an equivalent kind and
amount of the security being sold short at no additional cost (i.e., short sales
"against the box"). This limitation shall not prohibit or restrict the Fund
from entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.
3. The Fund may not purchase the securities of any other investment
company, except by purchase in the open market involving no commission or profit
to a sponsor or dealer (other than the customary broker's commission).
4. The Fund may not invest in companies for the purposes of exercising
control of management.
5. The Fund may not purchase any security, including any repurchase
agreement maturing in more than seven days, which is not readily marketable, if
more than 15% of the net assets of the Fund, taken at market value at the time
of purchase would be invested in such securities.
6. Only for the purpose of hedging, the Fund may purchase and sell
financial futures, forward foreign currency exchange contracts and put and call
options, but no more than 5% of the Fund's net assets at the time of purchase
may be invested in initial margins for financial futures transactions and
premiums for options. The Fund may only write call options that are covered and
only up to 25% of the Fund's total assets.
-19-
<PAGE>
7. The Fund may not purchase or sell securities on a when-issued or
delayed delivery basis, if as a result more than 5% of its total assets taken at
market value at the time of purchase would be invested in such securities.
8. The Fund may not purchase or sell any interest in an oil, gas or
mineral development or exploration program, including investments in oil, gas or
other mineral leases, rights or royalty contracts (except that the Fund may
invest in the securities of issuers engaged in the foregoing activities).
9. The Fund's investments in warrants valued at the lower of cost or
market may not exceed 5% of the value of the Fund's net assets. Included within
that amount, but not to exceed 2% of the value of the Fund's net assets, may be
warrants that are not listed on the New York Stock Exchange or American Stock
Exchange. Warrants acquired by the Fund in units or attached to securities are
not subject to these limits.
The Trust has undertaken to the State of Texas that the Berger Small
Company Growth Fund will not invest in real estate limited partnerships.
The Trust has undertaken to the State of Ohio that both the Berger Small
Company Growth Fund and the Berger New Generation Fund will prohibit the
purchase or retention by the Fund of the securities of any issuer if the
officers, directors or trustees of the Fund, its advisors, or managers owning
beneficially more than 1/2 of 1% of the securities of an issuer together own
beneficially more than 5% of the securities of that issuer.
3. MANAGEMENT OF THE FUNDS
The same directors or trustees and most of the same executive officers
serve each of the Funds. They are listed below, together with information which
includes their principal occupations during the past five years and other
principal business affiliations.
* RODNEY L. LINAFELTER, 210 University Boulevard, Suite 900, Denver, CO
80206, age 37. President since November 1994 (formerly, Vice President
from October 1990 to November 1994), a Portfolio Manager since October 1990
and a Director since October 1994 of Berger 100 Fund and Berger Growth and
Income Fund. Trustee and President of Berger Investment Portfolio Trust
since its inception in August 1993. President and Portfolio Manager of
Berger IPT - 100 Fund and Berger IPT - Growth and Income Fund and a Trustee
of Berger Institutional Products Trust since its inception in October 1995.
Vice President (since December 1990) and Chief Investment Officer (since
October 1994), Director (since January 1992) and, formerly, Portfolio
Manager (January 1990 to December 1990), with Berger Associates. Formerly
(April 1986 to December 1989), Financial Consultant (registered
-20-
<PAGE>
representative) with Merrill Lynch, Pierce, Fenner & Smith, Inc.
* WILLIAM R. KEITHLER, 210 University Boulevard, Suite 900, Denver, CO
80206, age 44. President since November 1994 (formerly, Vice President
from December 1993 to November 1994) and Portfolio Manager of the Berger
Small Company Growth Fund. President and Portfolio Manager of the Berger
New Generation Fund since its inception in December 1995. President and
Portfolio Manager of the Berger IPT - Small Company Growth Fund of the
Berger Institutional Products Trust since its inception in October 1995.
Since December 1993, Vice President-Investment Management of Berger
Associates. Formerly, Senior Vice President (January 1993 to December
1993), Vice President (January 1991 to January 1993) and Portfolio Manager
(January 1988 to January 1991) of INVESCO Trust Company (investment
management).
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, age 68.
President, Baldwin Financial Counseling. Formerly (1978-1990), Vice
President and Denver Office Manager of Merrill Lynch Capital Markets.
Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios
Trust.
* WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO
80206, age 71. Director and, formerly, President (1974-1994) of Berger 100
Fund and Berger Growth and Income Fund. Trustee of Berger Investment
Portfolio Trust since its inception in August 1993 (Chairman of the
Trustees through November 1994). Trustee of Berger Institutional Products
Trust since its inception in October 1995. Trustee of Berger/BIAM
Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust since
their inception in May 1996. Chairman (since 1994) and a Director (since
1973) and, formerly, President (1973-1994) of Berger Associates.
LOUIS R. BINDNER, 1075 South Fox, Denver, CO 80223, age 71. President,
Climate Engineering, Inc. (building environmental systems). Director of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios
Trust.
KATHERINE A. CATTANACH, 384 South Ogden, Denver, CO 80209, age 51.
Managing Principal, Sovereign Financial Services, L.L.C. (investment
consulting firm). Formerly (1981-1988), Executive Vice President,
Captiva Corporation, Denver, Colorado (private investment management
firm). Ph.D. in Finance (Arizona State University); Chartered Financial
Analyst (CFA). Director of Berger 100 Fund and Berger Growth and Income
Fund. Trustee of Berger Investment Portfolio Trust, Berger Institutional
-21-
<PAGE>
Products Trust, Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide
Portfolios Trust.
LUCY BLACK CREIGHTON, 1917 Leyden Street, Denver, CO 80220, age 69.
Associate, University College, University of Denver. Formerly, President
of the Colorado State Board of Land Commissioners (1989-1995), and Vice
President and Economist (1983-1988) and Consulting Economist (1989) for
First Interstate Bank of Denver. Ph.D. in Economics (Harvard University).
Director of Berger 100 Fund and Berger Growth and Income Fund. Trustee of
Berger Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios
Trust.
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1920, Chicago, IL 60602, age
51. Since 1991, Director, Chairman, President and Chief Executive Officer
of Catalyst Institute (international public policy research organization
focused primarily on financial markets and institutions) and Catalyst
Consulting (international financial institutions business consulting firm).
Formerly (1988-1991), Director, President and Chief Executive Officer of
Kessler Asher Group (brokerage, clearing and trading firm). Director of
Berger 100 Fund and Berger Growth and Income Fund. Trustee of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios
Trust.
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202, age
63. Self-employed as a private investor. Formerly (1981-1988), Senior
Vice President, Rocky Mountain Region, of Dain Bosworth Incorporated and
member of that firm's Management Committee. Director of Berger 100 Fund
and Berger Growth and Income Fund. Trustee of Berger Investment Portfolio
Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide Funds
Trust and Berger/BIAM Worldwide Portfolios Trust.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT 59717,
age 59. Since 1994, Dean, and from 1989 to 1994, a member of the Finance
faculty, of the College of Business, Montana State University.
Self-employed as a financial and management consultant, and in real estate
development. Formerly (1976-1989), Chairman and Chief Executive Officer of
Royal Gold, Inc. (mining). Chairman of the Board of Berger 100 Fund and
Berger Growth and Income Fund. Chairman of the Trustees of Berger
Investment Portfolio Trust, Berger Institutional Products Trust,
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios
Trust.
-22-
<PAGE>
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, age 68.
President, Sinclaire Cattle Co., and private investor. Director of Berger
100 Fund and Berger Growth and Income Fund. Trustee of Berger Investment
Portfolio Trust, Berger Institutional Products Trust, Berger/BIAM Worldwide
Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
* KEVIN R. FAY, 210 University Boulevard, Suite 900, Denver, CO 80206, age
41. Vice President, Secretary and Treasurer of Berger 100 Fund and Berger
Growth and Income Fund since October 1991, of Berger Investment Portfolio
Trust since its inception in August 1993, of Berger Institutional Products
Trust since its inception in October 1995 and of Berger/BIAM Worldwide
Funds Trust and Berger/BIAM Worldwide Portfolios Trust since their
inception in May 1996. Also, Vice President-Finance and Administration,
Secretary and Treasurer of Berger Associates since September 1991 and a
director of Berger Distributors, Inc., since its inception in May 1996.
Formerly, Financial Consultant (registered representative) with Neidiger
Tucker Bruner, Inc. (broker-dealer) (October 1989 to September 1991) and
Financial Consultant with Merrill Lynch, Pierce, Fenner & Smith, Inc.
(October 1985 to October 1989).
- ------------------
* Interested person (as defined in the Investment Company Act of 1940) of each
Fund and of Berger Associates.
DIRECTOR/TRUSTEE COMPENSATION
The officers of the Funds received no compensation from the Funds during
the fiscal year ended September 30, 1996. However, directors and trustees of
the Funds who are not interested persons of Berger Associates are compensated
for their services according to a fee schedule, allocated among the Funds, which
includes an annual fee component and a per meeting fee component. Neither the
officers of the Funds nor the directors or trustees receive any form of pension
or retirement benefit compensation from the Funds.
Set forth below is information regarding compensation (including
reimbursement of expenses) paid or accrued during the fiscal year ended
September 30, 1996, for each director of the Berger 100 Fund and Berger Growth
and Income Fund and for each trustee of the Berger Investment Portfolio Trust.
-23-
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
NAME AND POSITION AGGREGATE COMPENSATION FROM
WITH BERGER FUNDS
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
BERGER BERGER BERGER ALL
100 GROWTH INVESTMENT BERGER
FUND(1) AND PORTFOLIO FUNDS(2)
INCOME TRUST(1)
FUND(1)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Rodney L. Linafelter(3),(4),(6) $ 0 $ 0 $ 0 $ 0
- --------------------------------------------------------------------------------------------------------------------------------
Dennis E. Baldwin(4),(5) $30,649 $ 4,816 $10,708 $46,173
- --------------------------------------------------------------------------------------------------------------------------------
William M.B. Berger(4),(5),(6) $ 0 $ 0 $ 0 $ 0
- --------------------------------------------------------------------------------------------------------------------------------
Louis R. Bindner(4),(5) $24,049 $ 3,780 $ 8,361 $36,190
- --------------------------------------------------------------------------------------------------------------------------------
Katherine A. Cattanach(4),(5) $29,020 $ 4,562 $10,158 $43,740
- --------------------------------------------------------------------------------------------------------------------------------
Lucy Black Creighton(4),(5) $24,593 $ 3,864 $ 8,598 $37,055
- --------------------------------------------------------------------------------------------------------------------------------
Paul R. Knapp(4),(5) $33,404 $ 5,257 $11,456 $50,117
- --------------------------------------------------------------------------------------------------------------------------------
Harry T. Lewis(4),(5) $26,893 $ 4,210 $ 9,606 $40,709
- --------------------------------------------------------------------------------------------------------------------------------
Michael Owen(4),(5) $40,520 $ 6,363 $13,913 $60,796
- --------------------------------------------------------------------------------------------------------------------------------
William Sinclaire(4),(5) $23,134 $ 3,637 $ 7,942 $34,713
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Directors who are not interested persons of Berger Associates received as a
group directors' compensation (including reimbursement of expenses) from Berger
100 Fund of approximately $232,262, and from Berger Growth and Income Fund of
approximately $36,489, for the fiscal year ended September 30, 1996. Those
trustees who are not interested persons of Berger Associates received as a group
trustees' compensation (including reimbursement of expenses) from Berger
Investment Portfolio Trust of approximately $80,742 during the same period.
(2) Includes the Berger 100 Fund, the Berger Growth and Income Fund, the Berger
Investment Portfolio Trust (all series), the Berger Institutional Products Trust
(all series), the Berger/BIAM Worldwide Portfolios Trust (all series) and the
Berger/BIAM Worldwide Funds Trust (all series).
(3) President of Berger 100 Fund, Berger Growth and Income Fund and Berger
Investment Portfolio Trust.
(4) Director of Berger 100 Fund and Berger Growth and Income Fund and trustee
of Berger Investment Portfolio Trust and Berger Institutional Products Trust.
(5) Trustee of Berger/BIAM Worldwide Portfolios Trust and Berger/BIAM Worldwide
Funds Trust.
(6) Interested person of Berger Associates.
-24-
<PAGE>
Directors or trustees may elect to defer receipt of all or a portion of
their fees pursuant to a fee deferral plan adopted by each of the Berger 100
Fund, the Berger Growth and Income Fund and the Berger Investment Portfolio
Trust. Under the plan, deferred fees are credited to an account and adjusted
thereafter to reflect the investment experience of whichever of the Berger Funds
(or approved money market funds) is designated by the director or trustee for
this purpose. Pursuant to an SEC exemptive order, the Funds and the Trust are
permitted to purchase shares of the designated funds in order to offset their
obligation to the directors/trustees participating in the plan. Purchases made
pursuant to the plan are excepted from any otherwise applicable investment
restriction limiting the purchase of securities of any other investment company.
A Fund's or the Trust's obligation to make payments of deferred fees under the
plan is a general obligation of the Fund or Trust, respectively.
As of October 4, 1996, the officers and directors/trustees of the Funds as
a group owned of record or beneficially approximately 1.1% of the Berger Small
Company Growth Fund, approximately 3.4% of the Berger New Generation Fund and an
aggregate of less than 1% of the outstanding shares of each of the other Funds.
4. INVESTMENT ADVISOR
Berger Associates is the investment advisor to each Fund. Rodney L.
Linafelter, Vice President and Chief Investment Officer and a director of Berger
Associates, is also President, portfolio manager and a director of both the
Berger 100 Fund and the Berger Growth and Income Fund, and President and a
Trustee of the Berger Investment Portfolio Trust. William R. Keithler, Vice
President-Investment Management of Berger Associates, is also President and
portfolio manager of the Berger Small Company Growth Fund and the Berger New
Generation Fund. Kevin R. Fay, Vice President-Finance and Administration,
Secretary and Treasurer of Berger Associates, also serves as Vice President,
Secretary and Treasurer of the Berger Funds.
Berger Associates serves as investment advisor to other mutual funds,
pension and profit-sharing plans, and other institutional and private investors.
At times, Berger Associates may recommend purchases and sales of the same
investment securities for a Fund, other Berger Funds, and for one or more other
investment accounts. In such cases, it will be the practice of Berger
Associates to allocate the purchase and sale transactions among the
participating Berger Funds and the accounts in such manner as it deems
equitable. In making such allocation, the main factors to be considered are the
respective investment objectives of the Berger Funds and the accounts, the
relative size of portfolio holdings of the same or comparable securities, the
current availability of cash for investment by each of the Berger Funds and each
account, the size of investment commitments generally held by each Berger Fund
and each account, and the
-25-
<PAGE>
opinions of the persons responsible for recommending investments to the Berger
Funds and the accounts.
The officers of Berger Associates are Gerard M. Lavin, President, 210
University Blvd., Suite 900, Denver, CO 80206; Rodney L. Linafelter, Vice
President and Chief Investment Officer; William R. Keithler, Vice
President-Investment Management; Craig D. Cloyed, Vice President and Chief
Marketing Officer; and Kevin R. Fay, Vice President-Finance and Administration,
Secretary and Treasurer. The directors of Berger Associates are Mr. Lavin,
Landon H. Rowland, 114 West 11th Street, Kansas City, MO 64105, and Mr.
Linafelter and William M.B. Berger (both of whom also serve as directors of the
Berger 100 Fund and the Berger Growth and Income Fund and as trustees of the
Berger Investment Portfolio Trust).
Berger Associates permits its directors, officers, employees and other
access persons (as defined below) of Berger Associates ("covered persons") to
purchase and sell securities for their own accounts in accordance with
provisions governing personal investing in Berger Associates' Code of Ethics.
The Code requires all covered persons to conduct their personal securities
transactions in a manner which does not operate adversely to the interests of
the Funds or Berger Associates' other advisory clients. Directors and officers
of Berger Associates (including those who also serve as directors or trustees of
the Funds), investment personnel and other designated covered persons deemed to
have access to current trading information ("access persons") are required to
pre-clear all transactions in securities not otherwise exempt under the Code.
Requests for authority to trade will be denied pre-clearance when, among other
reasons, the proposed personal transaction would be contrary to the provisions
of the Code or would be deemed to adversely affect any transaction then known to
be under consideration for or currently being effected on behalf of any client
account, including the Funds.
In addition to the pre-clearance requirements described above, the Code
subjects those covered persons deemed to be access persons to various trading
restrictions and reporting obligations. All reportable transactions are
reviewed for compliance with Berger Associates' Code. Those covered persons
also may be required under certain circumstances to forfeit their profits made
from personal trading. The Code is administered by Berger Associates and the
provisions of the Code are subject to interpretation by and exceptions
authorized by its board of directors.
Each Fund's current Investment Advisory Agreement with Berger Associates
will continue in effect until the last day of April, 1997, and thereafter from
year to year if such continuation is specifically approved at least annually by
the directors or trustees or by vote of a majority of the outstanding shares of
the Fund and in either case by vote of a majority of the directors or trustees
who are not "interested persons" (as that term is defined in the 1940 Act) of
the Fund or Berger Associates. Each Agreement is subject to termination by the
Fund or Berger Associates on
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<PAGE>
60 days' written notice, and terminates automatically in the event of its
assignment.
Kansas City Southern Industries, Inc. ("KCSI") owns approximately 80% of
the outstanding shares of Berger Associates. KCSI is a publicly traded holding
company with principal operations in rail transportation, through its subsidiary
The Kansas City Southern Railway Company, and financial asset management
businesses. KCSI also owns approximately 41% of the outstanding shares of DST
Systems, Inc. ("DST"), a publicly traded information and transaction processing
company which acts as the Funds' sub-transfer agent.
5. EXPENSES OF THE FUNDS
Under their Investment Advisory Agreements, the Berger 100 Fund and the
Berger Growth and Income Fund have each agreed to compensate Berger Associates
for its investment advisory services to the Fund by the payment of a fee at the
annual rate of .75 of 1% (0.75%) of the average daily net assets of the Fund.
The fee is accrued daily and payable monthly. This fee may be higher than that
paid by most other mutual funds.
Under the Investment Advisory Agreement for each of the Berger Small
Company Growth Fund and the Berger New Generation Fund, Berger Associates is
compensated for its investment advisory services to the Fund by the payment of a
fee at the annual rate of .9 of 1% (0.90%) of the average daily net assets of
the Fund. The fee is accrued daily and payable monthly. This fee is higher
than that paid by most other mutual funds.
Each Fund pays all of its expenses not assumed by Berger Associates,
including, but not limited to, investment advisor fees, custodian and transfer
agent fees, legal and accounting expenses, administrative and record keeping
expenses, interest charges, federal and state taxes, costs of share
certificates, expenses of shareholders' meetings, compensation of directors or
trustees who are not interested persons of Berger Associates, expenses of
printing and distributing reports to shareholders and federal and state
administrative agencies, and all expenses incurred in connection with the
execution of its portfolio transactions, including brokerage commissions on
purchases and sales of portfolio securities, which are considered a cost of
securities of each Fund. Each Fund also pays all expenses incurred in complying
with all federal and state laws and the laws of any foreign country applicable
to the issue, offer or sale of shares of the Fund, including, but not limited
to, all costs involved in preparing and printing prospectuses of the Fund.
Each Fund has adopted a 12b-1 plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940, which provides for the payment to
Berger Associates of a 12b-1 fee of .25 of 1% (0.25%) per annum of the Fund's
average daily net assets to finance activities primarily intended to result in
the sale of Fund
-27-
<PAGE>
shares. The expenses paid by Berger Associates include the costs of preparing,
printing and mailing prospectuses to other than existing shareholders, as well
as promotional expenses directed at increasing the sale of Fund shares.
The current 12b-1 Plans for the Berger 100 Fund and the Berger Growth and
Income Fund came into effect with shareholder approval on October 14, 1994. The
amounts paid pursuant to the Plans for the fiscal year ended September 30, 1996,
totalled $5,256,000 for the Berger 100 Fund, $832,000 for the Berger Growth and
Income Fund, $1,640,000 for the Berger Small Company Growth Fund and $111,000
for the Berger New Generation Fund. All such amounts were paid to Berger
Associates under the Plans. A further discussion of the Plans is contained in
Section 8 of the Prospectus.
Each of the Funds has appointed Investors Fiduciary Trust Company ("IFTC")
as its recordkeeping and pricing agent. In addition, IFTC also serves as the
Funds' custodian, transfer agent and dividend disbursing agent. IFTC has
engaged DST as sub-agent to provide transfer agency and dividend disbursing
services for the Funds. As noted in the previous section, approximately 41% of
the outstanding shares of DST are owned by KCSI. The addresses and telephone
numbers for DST set forth in the Prospectus and this Statement of Additional
Information should be used for correspondence with the transfer agent.
As recordkeeping and pricing agent, IFTC calculates the daily net asset
value of each of the Funds and performs certain accounting and recordkeeping
functions required by the Funds. The Funds pay IFTC a monthly base fee plus an
asset-based fee. IFTC is also reimbursed for certain out-of-pocket expenses.
IFTC, as custodian, and its subcustodians have custody and provide for the
safekeeping of the Funds' securities and cash, and receive and remit the income
thereon as directed by the management of the Funds. The custodian and
subcustodians do not perform any managerial or policy-making functions for the
Funds. For its services as custodian, IFTC receives an asset-based fee plus
certain transaction fees and out-of-pocket expenses.
As transfer agent and dividend disbursing agent, IFTC (through DST, as
sub-agent) maintains all shareholder accounts of record; assists in mailing all
reports, proxies and other information to the Funds' shareholders; calculates
the amount of, and delivers to the Funds' shareholders, proceeds representing
all dividends and distributions; and performs other related services. For these
services, IFTC receives a fee from the Funds at an annual rate of $15.05 per
open Fund shareholder account, subject to scheduled increases, plus certain
transaction fees and fees for closed accounts, and is reimbursed for
out-of-pocket expenses, which fees in turn are passed through to DST as
sub-agent.
-28-
<PAGE>
All of IFTC's fees are subject to reduction pursuant to an agreed formula
for certain earnings credits on the cash balances of the Funds. The following
table shows gross fees, earnings credits and net fees paid to IFTC for the
fiscal year ended September 30, 1996, for each of the Funds.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
GROSS FEES EARNINGS NET FEES PAID
PAYABLE TO IFTC CREDITS TO IFTC
RECEIVED FROM
IFTC
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Berger 100 Fund $5,972,000 $ 207,000 $5,765,000
- -----------------------------------------------------------------------------------------------------------------------------
Berger Growth and Income $1,275,000 $ 36,000 $1,239,000
Fund
- -----------------------------------------------------------------------------------------------------------------------------
Berger Small Company Growth $2,335,000 $ 62,000 $2,273,000
Fund
- -----------------------------------------------------------------------------------------------------------------------------
Berger New Generation Fund $ 248,000 $ 9,000 $ 239,000
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The directors or trustees of each of the Funds have authorized Berger
Associates to place portfolio transactions on an agency basis through DST
Securities, Inc., a wholly-owned broker-dealer subsidiary of DST ("DSTS"). When
transactions are effected through DSTS, the commission received by DSTS is
credited against, and thereby reduces, certain operating expenses that the
Fund would otherwise be obligated to pay. No portion of the commission is
retained by DSTS. See Section 6 Brokerage Policy for further information
concerning the expenses reduced as a result of these arrangements.
The Funds and Berger Associates have entered into arrangements with certain
organizations (broker-dealers, recordkeepers and administrators) to provide
sub-transfer agency, recordkeeping, shareholder communications, sub-accounting
and/or other services to investors purchasing shares of the Funds through
investment programs or pension plans established or serviced by those
organizations. The Funds and/or Berger Associates may pay fees to these
organizations for their services. Any such fees paid by a Fund will be for
services that otherwise would be provided or paid for by the Fund if all the
investors who own Fund shares through the organization were registered record
holders of shares in the Fund.
In addition, under a separate Administrative Services Agreement with
respect to each Fund, Berger Associates performs certain administrative and
recordkeeping services not otherwise performed by IFTC, including the
preparation of financial
-29-
<PAGE>
statements and reports to be filed with the Securities and Exchange Commission
and state regulatory authorities. Each Fund pays Berger Associates a fee at an
annual rate of one one-hundredth of one percent (0.01%) of its average daily net
assets for such services. Those fees are in addition to the investment advisory
fees paid under the Investment Advisory Agreement. The administrative services
fees may be changed by the directors or trustees without shareholder approval.
Berger Associates has voluntarily agreed to waive its advisory fee to the
extent that a Fund's normal operating expenses in any fiscal year, including the
management fee, but excluding the 12b-1 fee, brokerage commissions, interest,
taxes and extraordinary expenses, exceed the most restrictive expense
limitation imposed by any applicable state. Historically, the most
restrictive limitation applicable to the Funds was 2-1/2% of the first
$30,000,000 of average daily net assets, plus 2% of the next $70,000,000,
plus 1-1/2% of the balance of the average daily net assets of the Fund for
that fiscal year. However, recently adopted federal legislation may have
eliminated all state-imposed expense limitations. The directors and trustees
of the Funds are expected to consider what action, if any, should be taken
with respect to the Funds' expense limitations in light of this new
legislation.
Separately, Berger Associates has voluntarily agreed to waive
its advisory fee to the extent that the Berger New Generation Fund's normal
operating expenses in any fiscal year, including the management fee and the
12b-1 fee, but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 1.90% of the Fund's average daily net assets
for that fiscal year.
The following tables show the cost to each Fund of the previously
applicable advisory fee and the fees for the administrative services for certain
periods, the amounts reimbursed to each Fund on account of excess expenses under
the then applicable expense limitation, and the percentage of average daily net
asset value of the respective Fund that those represent.
BERGER 100 FUND
---------------
Adminis-
Fiscal Year trative Advisory Percent of
Ended Advisory Service Fee Average
September 30, Fee Fee* Waiver* Total Net Assets
- ------------- -------- -------- -------- ------ ----------
1994 $ 9,168,916 $ 180,239 $ 0 $ 9,349,155 0.52%
1995 15,753,914 212,623 0 15,966,537 0.75%
1996 15,767,000 210,000 0 15,977,000 0.76%
BERGER GROWTH AND INCOME FUND
------------------------------
Adminis-
Fiscal Year trative Advisory Percent of
Ended Advisory Service Fee Average
September 30, Fee Fee* Waiver* Total Net Assets
- ------------- -------- -------- -------- ------ -----------
1994 $1,525,695 $ 27,388 $(154,669) $1,398,414 0.51%
1995 2,680,832 36,143 0 2,716,975 0.75%
1996 2,496,000 33,000 0 2,529,000 0.76%
-30-
<PAGE>
BERGER SMALL COMPANY GROWTH FUND
--------------------------------
Adminis-
Fiscal Year trative Advisory Percent of
Ended Advisory Service Fee Average
September 30, Fee Fee Waiver Total Net Assets
- ------------- -------- -------- -------- ------ ----------
1994** $ 760,561 $ 8,444 $ 0 $ 769,005 0.91%
1995 3,211,591 35,692 0 3,247,283 0.91%
1996 5,902,000 66,000 0 5,968,000 0.91%
BERGER NEW GENERATION FUND
--------------------------
Adminis-
Fiscal Year trative Advisory Percent of
Ended Advisory Service Fee Average
September 30, Fee Fee Waiver Total Net Assets
- ------------- -------- -------- -------- ------ -----------
1996*** $ 398,000 $ 4,000 $ (85,000) $ 317,000 0.71%
- ------------------
* Under the Investment Advisory Agreement in effect until October 14, 1994,
Berger Associates waived its advisory fee to the Berger 100 Fund and the Berger
Growth and Income Fund to the extent that the Fund's normal operating expenses
(exclusive of brokerage commissions, 12b-1 fees, interest and taxes) exceeded 2%
of the first $10,000,000, 1-1/2% of the next $20,000,000 and 1% of the balance
of the Fund's average daily net assets for its fiscal year.
** Covers period from December 30, 1993 (date operations commenced) through the
end of the Fund's first fiscal year on September 30, 1994.
*** Covers period from March 29, 1996 (date operations commenced) through the
end of the Fund's first fiscal year on September 30, 1996.
6. BROKERAGE POLICY
Although each Fund retains full control over its own investment policies,
under the terms of its Investment Advisory Agreement, Berger Associates is
directed to place the portfolio transactions of the Fund. Berger Associates is
required to report on the placement of brokerage business to the directors or
trustees of each Fund every quarter, indicating the brokers with whom Fund
portfolio business was placed and the basis for such placement. The brokerage
commissions paid by the Funds during the past three fiscal years were as
follows:
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<PAGE>
BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
FISCAL YEAR FISCAL YEAR FISCAL YEAR
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1994 1995 1996
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BERGER 100 FUND $2,273,517 $4,588,858 $4,690,664
- -----------------------------------------------------------------------------------------------------------------------------
BERGER GROWTH AND INCOME FUND $ 406,885 $ 753,905 $ 768,786
- -----------------------------------------------------------------------------------------------------------------------------
BERGER SMALL COMPANY GROWTH FUND $ 233,121* $ 486,617 $ 603,950
- -----------------------------------------------------------------------------------------------------------------------------
BERGER NEW GENERATION FUND N/A N/A $ 938,731**
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Covers period from December 30, 1993 (date operations commenced) through the
end of the Fund's first fiscal year on September 30, 1994.
** Covers period from March 29, 1996 (date operations commenced) through the
end of the Fund's first fiscal year on September 30, 1996. The Fund paid more
brokerage commissions than anticipated during this period as a result of
portfolio transactions undertaken in response to volatile markets and the
short tax year for its initial period of operations.
The Investment Advisory Agreement that each Fund has with Berger Associates
authorizes and directs Berger Associates to place portfolio transactions for the
Fund only with brokers and dealers who render satisfactory service in the
execution of orders at the most favorable prices and at reasonable commission
rates. However, each Agreement specifically authorizes Berger Associates to
place such transactions with a broker with whom it has negotiated a commission
that is in excess of the commission another broker or dealer would have charged
for effecting that transaction if Berger Associates determines in good faith
that such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by such broker viewed in terms of
either that particular transaction or the overall responsibilities of Berger
Associates.
In accordance with this provision of the Agreement, Berger Associates
places portfolio brokerage business of each Fund with brokers who provide useful
research services to Berger Associates. Such research services typically
consist of studies made by investment analysts or economists relating either to
the past record of and future outlook for companies and the industries in which
they operate, or to national and worldwide economic conditions, monetary
conditions and trends in investors' sentiment, and the relationship of these
factors to the securities market. In addition, such analysts may be available
for regular consultation so that Berger Associates may be apprised of current
developments in the above-mentioned factors. During the fiscal year ended
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<PAGE>
September 30, 1996, $666,835, $172,607, $53,257 and $3,540 of the brokerage
commissions paid by the Berger 100 Fund, the Berger Growth and Income Fund, the
Berger Small Company Growth Fund and the Berger New Generation Fund,
respectively, were paid to brokers who agreed to provide to the Fund selected
research services prepared by the broker or subscribed or paid for by the broker
on behalf of the Fund. Those services included a service used by the
independent directors or trustees of the Funds in reviewing the Investment
Advisory Agreements.
The research services received from brokers are often helpful to Berger
Associates in performing its investment advisory responsibilities to the Funds,
but they are not essential, and the availability of such services from brokers
does not reduce the responsibility of Berger Associates' advisory personnel to
analyze and evaluate the securities in which the Funds invest. The research
services obtained as a result of the Funds' brokerage business also will be
useful to Berger Associates in making investment decisions for its other
advisory accounts, and, conversely, information obtained by reason of placement
of brokerage business of such other accounts may be used by Berger Associates in
rendering investment advice to the Funds. Although such research services may
be deemed to be of value to Berger Associates, they are not expected to decrease
the expenses that Berger Associates would otherwise incur in performing its
investment advisory services for the Funds nor will the advisory fees that are
received by Berger Associates from the Funds be reduced as a result of the
availability of such research services from brokers.
Investment decisions for the Funds and other accounts advised by Berger
Associates are made independently with a view to achieving each of their
respective investment objectives and after consideration of such factors as
their current holdings, availability of cash for investment and the size of
their investments generally. However, certain investments may be appropriate
for a Fund and one or more such accounts. If a Fund and other accounts advised
by Berger Associates are contemporaneously engaged in the purchase or sale of
the same security, the orders may be aggregated and/or the transactions averaged
as to price and allocated equitably to the Fund and each participating account.
While in some cases, this policy might adversely affect the price paid or
received by a Fund or other participating accounts, or the size of the position
obtained or liquidated, Berger Associates will aggregate orders if it believes
that coordination of orders and the ability to participate in volume
transactions will result in the best overall combination of net price and
execution.
The directors or trustees of each of the Funds authorized Berger Associates
to place portfolio transactions on an agency basis through DSTS, a wholly-owned
broker-dealer subsidiary of DST. When transactions are effected through DSTS,
the commission received by DSTS is credited against, and thereby reduces,
certain
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<PAGE>
operating expenses that the Fund would otherwise be obligated to pay. No
portion of the commission is retained by DSTS.
Included in the brokerage commissions paid by the Funds during the fiscal
year ended September 30, 1996, as stated in the preceding table, are the
following amounts paid to DSTS, which served to reduce each Fund's out-of-pocket
expenses as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
COMMISSIONS PAID REDUCTION IN
THROUGH DSTS (1) EXPENSES (1)
- -----------------------------------------------------------------------------------
<S> <C> <C>
Berger 100 Fund $278,050(2) $208,538
- -----------------------------------------------------------------------------------
Berger Growth and Income Fund $ 15,120(3) $ 11,340
- -----------------------------------------------------------------------------------
Berger Small Company Growth Fund $ 12,800(4) $ 9,600
- -----------------------------------------------------------------------------------
Berger New Generation Fund $ 0 $ 0
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>
(1) No portion of the commission is retained by DSTS. Difference between
commissions paid through DSTS and reduction in expenses constitute commissions
paid to an unaffiliated clearing broker.
(2) Constitutes 5.9% of the aggregate brokerage commissions paid by the Berger
100 Fund and 5.4% of the aggregate dollar amount of transactions placed by
the Berger 100 Fund.
(3) Constitutes 2.0% of the aggregate brokerage commissions paid by the Berger
Growth and Income Fund and 1.0% of the aggregate dollar amount of
transactions placed by the Berger Growth and Income Fund.
(4) Constitutes 2.1% of the aggregate brokerage commissions paid by the Berger
Small Company Growth Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger Small Company Growth Fund.
7. HOW TO PURCHASE SHARES IN THE FUNDS
Minimum Initial Investment $2,000.00
Minimum Subsequent Investment $ 50.00
To purchase shares in any of the Funds, simply complete the application
form enclosed with the Prospectus. Then mail it with a check payable to "Berger
Funds" to the Funds in care of DST Systems, Inc., the Funds' sub-transfer agent,
as follows:
Berger Funds
c/o DST Systems, Inc.
P.O. Box 419958
Kansas City, MO 64141
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<PAGE>
If a shareholder is adding to an existing account, shares may also be
purchased by placing an order by telephone call to the Funds at 1-800-551-5849
or via personal computer through on-line service providers or other on-line
access points approved by the Funds, and remitting payment to DST Systems, Inc.
Payment for shares ordered on-line must be made by electronic funds transfer.
In order to make sure that payment for telephone purchases is received on time,
shareholders are encouraged to remit payment by electronic funds transfer.
Shareholders may also remit payment by wire or by overnight delivery.
In addition, Fund shares may be purchased through certain broker-dealers
that have established mutual fund programs and certain other organizations
connected with pension and retirement plans. These broker-dealers and other
organizations may charge investors a transaction or other fee for their
services, may require different minimum initial and subsequent investments than
the Funds and may impose other charges or restrictions different from those
applicable to shareholders who invest in the Funds directly. Fees charged by
these organizations will have the effect of reducing a shareholder's total
return on an investment in Fund shares. No such charge will be paid by an
investor who purchases the Fund shares directly from the Fund as described
above.
8. HOW THE NET ASSET VALUE IS DETERMINED
The net asset value of each Fund is determined once daily, at the close
of the regular trading session of the New York Stock Exchange (the "Exchange")
(normally 4:00 p.m., New York time, Monday through Friday) each day that the
Exchange is open. The Exchange is closed and the net asset value of the Funds
is not determined on weekends and on New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day each year. The per share net asset value of each Fund is
determined by dividing the total value of its securities and other assets, less
liabilities, by the total number of shares outstanding.
In determining net asset value, securities listed or traded primarily on
national exchanges, The Nasdaq Stock Market and foreign exchanges are valued at
the last sale price on such markets, or, if such a price is lacking for the
trading period immediately preceding the time of determination, such securities
are valued at the mean of their current bid and asked prices. Securities that
are traded in the over-the-counter market are valued at the mean between their
current bid and asked prices. The market value of individual securities held by
each Fund will be determined by using prices provided by pricing services which
provide market prices to other mutual funds or, as needed, by obtaining market
quotations from independent broker/dealers. Short-term money market securities
maturing within 60 days are valued on the amortized cost basis, which
approximates market value. All assets and liabilities initially expressed in
terms of non-U.S. dollar currencies are translated into U.S. dollars at the
prevailing market rates as quoted by one or more banks or dealers shortly before
the close of the Exchange. Securities and assets
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<PAGE>
for which quotations are not readily available are valued at fair values
determined in good faith pursuant to consistently applied procedures established
by the directors or trustees.
Generally, trading in foreign securities markets is substantially
completed each day at various times prior to the close of the Exchange. The
values of foreign securities used in computing the net asset value of the shares
of a Fund are determined as of the earlier of such market close or the closing
time of the Exchange. Occasionally, events affecting the value of such
securities may occur between the times at which they are determined and the
close of the Exchange, or when the foreign market on which such securities trade
is closed but the Exchange is open, which will not be reflected in the
computation of net asset value. If during such periods, events occur which
materially affect the value of such securities, the securities will be valued at
their fair market value as determined in good faith pursuant to consistently
applied procedures established by the directors or trustees.
A Fund's securities may be listed primarily on foreign exchanges or
over-the-counter dealer markets which may trade on days when the Exchange is
closed (such as a customary U.S. holiday) and on which the Fund's net asset
value is not calculated. As a result, the net asset value of a Fund may be
significantly affected by such trading on days when shareholders cannot purchase
or redeem shares of the Fund.
9. INCOME DIVIDENDS, CAPITAL GAINS
DISTRIBUTIONS AND TAX TREATMENT
It is the policy of each Fund to meet the requirements of Subchapter M
of the Internal Revenue Code and to distribute to its investors all or
substantially all of its taxable income as defined in the Code. Each of the
Funds met the requirements for the last fiscal year end, and intends to meet
them in the future. If the Funds meet the Subchapter M requirements, they
generally are not liable for Federal income taxes to the extent their earnings
are distributed. Qualification as a regulated investment company under the
Internal Revenue Code does not, however, involve any federal supervision of
management or of the investment practices or policies of the Funds. If a Fund
distributes annually less than 98% of its income and gain, it will be subject to
a nondeductible excise tax equal to 4% of the shortfall.
Advice as to the tax status of each year's dividends and distributions
will be mailed annually to the shareholders of each Fund. Dividends paid by a
Fund from net investment income and distributions from the Fund's net short-term
capital gains in excess of any net long-term capital losses, whether received in
cash or reinvested, generally will be taxable as ordinary income. Distributions
received from a Fund designated as long-term capital gains (net of capital
losses), whether received in cash or reinvested, will be taxable as long-term
capital gains without
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<PAGE>
regard to the length of time a shareholder has owned shares in the Fund. Any
loss on the redemption or other sale or exchange of a Fund's shares held for six
months or less will be treated as a long-term capital loss to the extent of any
long-term capital gain distribution received on the shares. A portion of the
dividends (but not capital gains distributions) paid by a Fund may be eligible
for the dividends received deduction for corporate shareholders to the extent
that the Fund's income consists of dividends paid by United States corporations.
If a shareholder is exempt from Federal income tax, the shareholder will not
generally be taxed on amounts distributed by a Fund.
Dividends and interest received by the Funds on foreign securities may
give rise to withholding and other taxes imposed by foreign countries. It is
expected that foreign taxes paid by the Funds will be treated as expenses of the
Funds. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes.
If the amount of the Fund's distributions for a taxable year exceeds the
Fund's tax earnings and profits available for distribution, all or portion or
the distributions may be treated as a return of capital or as capital gains. In
the event a distribution is treated as a return of capital, the shareholder's
basis in his or her Fund shares will be reduced to the extent the distribution
is so treated.
At certain levels of taxable income, the Internal Revenue Code provides
a preferential tax rate for long-term capital gains. Long-term capital gains of
taxpayers other than corporations are taxed at a 28% maximum rate, whereas
ordinary income is taxed at a 39.6% maximum rate. Capital losses continue to be
deductible only against capital gains plus (in the case of taxpayers other than
corporations) $3,000 of ordinary income annually ($1,500 for married individuals
filing separately).
10. SUSPENSION OF REDEMPTION RIGHTS
The right of redemption may be suspended for any period during which the
New York Stock Exchange is closed or the Securities and Exchange Commission
determines that trading on the Exchange is restricted, or when there is an
emergency as determined by the Securities and Exchange Commission as a result of
which it is not reasonably practicable for a Fund to dispose of securities owned
by it or to determine the value of its net assets, or for such other period as
the Securities and Exchange Commission may by order permit for the protection of
shareholders of a Fund.
Each Fund intends to redeem its shares only for cash, although it
retains the right to redeem its shares in-kind under unusual circumstances, in
order to protect the interests of the remaining shareholders, by the delivery of
securities selected from its assets at its discretion. Each Fund is, however,
governed by Rule 18f-1 under the Investment Company Act of 1940 pursuant to
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<PAGE>
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net assets of the Fund during any 90-day period for any
one shareholder. For purposes of this threshold, each underlying account holder
whose shares are held of record in certain omnibus accounts is treated as one
shareholder. Should redemptions by any shareholder during any 90-day period
exceed such limitation, the Fund will have the option of redeeming the excess in
cash or in-kind. If shares are redeemed in-kind, the redeeming shareholder
generally will incur brokerage costs in converting the assets to cash. The
method of valuing securities used to make redemption in-kind will be the same as
the method of valuing portfolio securities described under Section 8.
Shareholders have the ability to request in writing a review of the valuation of
in-kind redemptions, which will be considered by the Trustees of the Fund within
90 days of such written request.
11. TAX-SHELTERED RETIREMENT PLANS
The Funds offer a Profit-Sharing Plan, a Money Purchase Pension Plan, an
Individual Retirement Account and a 403(b) Custodial Account for adoption by
employers and individuals who wish to participate in such Plans by accumulating
shares of any of the Funds with tax-deductible dollars.
PROFIT-SHARING AND MONEY PURCHASE PENSION PLANS
Employers, self-employed individuals and partnerships may make
tax-deductible contributions to the tax-qualified retirement plans offered by
the Funds. All income and capital gains in the Plans are tax free until
withdrawn. The amounts that are deductible depend upon the type of Plan or
Plans adopted.
If you, as an employer, self-employed person or partnership, adopt the
Profit-Sharing Plan, you may vary the amount of your contributions from year to
year and may elect to make no contribution at all for some years. If you adopt
the Money Purchase Pension Plan, you must commit yourself to make a contribution
each year according to a formula in the Plan that is based upon your and your
employees' compensation or earned income. By adopting both the Profit-Sharing
and the Money Purchase Pension Plan, you can increase the amount of
contributions that you may deduct in any one year.
If you wish to purchase shares of any Fund in conjunction with one or
both of these tax-qualified plans, you may use an Internal Revenue Service
approved prototype Trust Agreement and Retirement Plan available from the Funds.
IFTC serves as trustee of the Plan, for which it charges an annual trustee's fee
of $12 for each Fund or Cash Account Trust Money Portfolio (discussed below) in
which the participant's account is invested. Contributions under the Plans are
invested exclusively in shares of the Funds or the Cash Account Trust Money
Market Portfolios, which are then held by the trustee under the terms of the
Plans to create a retirement fund in accordance with the tax code.
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<PAGE>
Distributions from the Profit-Sharing and Money Purchase Pension Plans
generally may not be made without penalty until the participant reaches age
59 1/2 and must begin no later than April 1 of the calendar year following the
year in which the participant attains age 70 1/2. Except for required
distributions after age 70 1/2, periodic distributions over more than 10 years
and the distribution of any after-tax contributions, distributions are subject
to 20% Federal income tax withholding unless those distributions are rolled
directly to another qualified plan or an individual retirement account (IRA).
Participants may not be able to receive distributions immediately upon request
because of certain requirements under federal tax law. Since distributions
which do not satisfy these requirements can result in adverse tax consequences,
consultation with an attorney or tax advisor regarding the Plans is recommended.
In order to receive the necessary materials to create a Profit-Sharing
or Money Purchase Pension Plan, please write to the Funds, c/o Berger
Associates, Inc., P.O. Box 5005, Denver, Colorado 80217, or call 1-800-333-1001.
Trustees for 401(k) or other existing plans interested in utilizing Fund shares
as an investment or investment alternative in their plans should contact the
Funds at 1-800-333-1001.
INDIVIDUAL RETIREMENT ACCOUNT (IRA)
If you are an individual with compensation or earned income, whether or
not you are actively participating in an existing qualified retirement plan, you
can provide for your own retirement by adopting an IRA. Under an IRA, you can
contribute each year up to the lesser of 100% of your compensation or $2,000.
If you have a nonemployed spouse (or if your spouse elects to be treated as
having no compensation), you may make contributions totaling up to $2,250 to two
IRAs. If neither you nor your spouse are covered by an existing qualified
retirement plan, or if your income does not exceed certain amounts, the amounts
contributed to your IRA can be deducted for Federal income tax purposes whether
or not your deductions are itemized. If you or your spouse are covered by an
existing qualified retirement plan, and your income exceeds the applicable
amounts, your IRA contributions are not deductible for Federal income tax
purposes. However, whether your contributions are deductible or not, the income
and capital gains on your IRA are not taxed until the account is distributed.
If you wish to create an IRA to invest in shares of any Fund, you may
use the Fund's IRA custodial agreement form which is an adaptation of the form
provided by the Internal Revenue Service. Under the IRA custodial agreement,
IFTC will serve as custodian, for which it will charge an annual custodian fee
of $12 per Fund or Cash Account Trust Money Market Portfolio in which the IRA is
invested.
Distributions from an IRA generally may not be made without penalty
until you reach age 59 1/2 and must begin no later
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<PAGE>
than April 1 of the calendar year following the year in which you attain age
70 1/2. Since distributions which do not satisfy these requirements can result
in adverse tax consequences, consultation with an attorney or tax advisor is
recommended.
In order to receive the necessary materials to create an IRA account,
please write to the Funds, c/o Berger Associates, Inc., P.O. Box 5005, Denver,
Colorado 80217, or call 1-800-333-1001.
403(b) CUSTODIAL ACCOUNTS
If you are employed by a public school system or certain tax-exempt
organizations such as private schools, colleges, universities, hospitals,
religious and charitable or other nonprofit organizations, you may establish a
403(b) Custodial Account. Your employer must participate in the establishment
of the account.
Your employer will automatically deduct the amount you designate from
your gross salary and contribute it to your 403(b) Custodial Account. The
amount which you may contribute annually under a salary reduction agreement is
generally the lesser of $9,500 or your exclusion allowance, which is based upon
a specified formula. There is a $50 minimum investment in the 403(b) Custodial
Account. Contributions made to the account reduce the amount of your current
income subject to Federal income tax. Federal income tax is not paid on your
contribution until you begin making withdrawals. In addition, all income and
capital gains in the account are tax-free until withdrawn.
Withdrawals from your 403(b) Custodial Agreement may begin as soon as
you reach age 59-1/2 and must begin no later than April 1 of the year following
the calendar year in which you attain age 70 1/2. Except for required
distributions after age 70 1/2 and periodic distributions over more than 10
years, distributions are subject to 20% Federal income tax withholding unless
those distributions are rolled directly to another 403(b) account or annuity or
an individual retirement account (IRA). You may not be able to receive
distributions immediately upon request because of certain notice requirements
under federal tax law. Since distributions which do not satisfy these
requirements can result in adverse tax consequences, consultation with an
attorney or tax advisor regarding the 403(b) Custodial Account is recommended.
Individuals who wish to purchase shares of a Fund in conjunction with a
403(b) Custodial Account may use a Custodian Account Agreement and related forms
available from the Funds. IFTC serves as custodian of the 403(b) Custodial
Account, for which it charges an annual custodian fee of $12 per Fund in which
the participant's account is invested.
In order to receive the necessary materials to create a 403(b) Custodial
Account, please write to the Funds, c/o Berger
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<PAGE>
Associates, Inc., P.O. Box 5005, Denver, Colorado 80217, or call 1-800-333-1001.
12. EXCHANGE PRIVILEGE AND SYSTEMATIC WITHDRAWAL PLAN
A shareholder who owns shares of any of the Funds worth at least $5,000
at the current net asset value may establish a Systematic Withdrawal account
from which a fixed sum will be paid to the shareholder at regular intervals by
the Fund in which the shareholder is invested.
To establish a Systematic Withdrawal account, the shareholder deposits
Fund shares with the Fund and appoints the Fund as agent to redeem shares in the
shareholder's account in order to make monthly, quarterly, semi-annual or annual
withdrawal payments to the shareholder of a fixed amount. The minimum
withdrawal payment is $50.00. These payments generally will be made on the 25th
day of each month.
Withdrawal payments are not yield or income on the shareholder's
investment, since portions of each payment will normally consist of a return of
the shareholder's investment. Depending on the size of the disbursements
requested and the fluctuation in value of the Fund's portfolio, redemptions for
the purpose of making such disbursements may reduce or even exhaust the
shareholder's account.
The shareholder may vary the amount or frequency of withdrawal payments,
temporarily discontinue them, or change the designated payee or payee's address,
by notifying the Fund. The shareholder may, of course, make additional deposits
of Fund shares in the shareholder's account at any time.
Since redemption of shares to make withdrawal payments is a taxable
event, each investor should consult a tax advisor concerning proper tax
treatment of the redemption.
Any shareholder may exchange any or all of the shareholder's shares in
any of the Funds for shares of any of the other Funds or for shares of the Money
Market Portfolio, the Government Securities Portfolio or the Tax-Exempt
Portfolio of the Cash Account Trust ("CAT Portfolios"), separately managed,
unaffiliated money market funds, without charge, after receiving a current
prospectus of the other Fund or CAT Portfolio. The exchange privilege with the
CAT Portfolios does not constitute an offering or recommendation of the shares
of any such CAT Portfolio by any of the Funds or Berger Associates. Exchanges
into or out of the Funds are made at the net asset value per share next
determined after the exchange request is received. Each exchange represents the
sale of shares from one fund and the purchase of shares in another, which may
produce a gain or loss for Federal income tax purposes. An exchange of shares
may be made by written request directed to DST Systems, Inc., via a personal
computer through on-line service providers or other on-line access points
approved by
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<PAGE>
the Funds, or simply by telephoning the Berger Funds at 1-800-551-5849. This
privilege is revocable by any of the Funds, and is not available in any state in
which the shares of the Fund or CAT Portfolio being acquired in the exchange are
not registered for sale. Shareholders automatically have telephone and on-line
privileges to authorize exchanges unless they specifically decline this service
in the account application or in writing.
13. PERFORMANCE INFORMATION
The Prospectus contains a brief description of how total return is
calculated.
Quotations of average annual total return for the Funds will be
expressed in terms of the average annual compounded rate of return of a
hypothetical investment in the Fund over periods of 1, 5 and 10 years, or for
the life of the Fund, if shorter. These are the rates of return that would
equate the initial amount invested to the ending redeemable value. These rates
to the power of
of return are calculated pursuant to the following formula: P(1 + T) = ERV
(where P = a hypothetical initial payment of $1,000, T = the average annual
total return, n = the number of years and ERV = the ending redeemable value of a
hypothetical $1,000 payment made at the beginning of the period). All total
return figures reflect the deduction of a proportional share of Fund expenses on
an annual basis, and assume that all dividends and distributions are reinvested
when paid.
For the one, five and ten year periods ending September 30, 1996, and
for the period from September 30, 1974 (immediately prior to Berger Associates
assuming the duties as the investment advisor for those Funds) through September
30, 1996, the average annual total returns were 9.36%, 13.50%, 17.93% and
15.02%, respectively, for the Berger 100 Fund, and 10.67%, 12.14%, 11.36% and
13.55%, respectively, for the Berger Growth and Income Fund. Since the 12b-1
fees for the Berger 100 Fund and the Berger Growth and Income Fund did not take
effect until June 19, 1990, the foregoing performance figures do not reflect the
deduction of the 12b-1 fees for the full length of the ten-year and longer
periods.
For the Berger Small Company Growth Fund, the average annual total
return was 31.30% for the one-year period ending September 30, 1996, and 26.24%
for the period December 30, 1993 (date operations commenced) through September
30, 1996.
For the Berger New Generation Fund, the total return (not annualized)
was 18.20% for the period March 29, 1996 (date operations commenced) through
September 30, 1996.
14. ADDITIONAL INFORMATION
The Berger 100 Fund and Berger Growth and Income Fund are separate
corporations which were incorporated under the laws of the
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<PAGE>
State of Maryland on March 10, 1966, as "The One Hundred Fund, Inc." and "The
One Hundred and One Fund, Inc.", respectively. The names "Berger One Hundred
Fund-Registered Trademark-", "Berger 100 Fund-Registered Trademark-", "Berger
One Hundred and One Fund-Registered Trademark-" and "Berger 101 Fund-Registered
Trademark-" were adopted by the respective Funds as service marks and trade
names in November 1989. In 1990, the shareholders of the Berger Growth and
Income Fund approved changing its formal corporate name to "Berger One Hundred
and One Fund, Inc." and the Fund began doing business under the trade name
"Berger Growth and Income Fund, Inc." in January 1996.
The Berger Small Company Growth Fund is a separate portfolio established
on August 23, 1993, under the Berger Investment Portfolio Trust, a Delaware
business trust established under the Delaware Business Trust Act. The name
"Berger Small Company Growth Fund-Registered Trademark-" was registered as a
service mark in September 1995. The Berger New Generation Fund was the second
portfolio created under the Berger Investment Portfolio Trust, established on
December 21, 1995. The Trust is authorized to issue an unlimited number of
shares of beneficial interest in series or portfolios. Currently, the Berger
Small Company Growth Fund and the Berger New Generation Fund are the only
portfolios established under the Trust, although others may be added in the
future.
Under Delaware law, shareholders of the Trust will enjoy the same
limitations on personal liability as extended to stockholders of a Delaware
corporation. Further, the Trust Instrument of the Trust provides that no
shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for or otherwise existing with respect to,
the Trust or any particular series (fund) of the Trust. However, the principles
of law governing the limitations of liability of beneficiaries of a business
trust have not been authoritatively established as to business trusts organized
under the laws of one jurisdiction but operating or owning property in other
jurisdictions. In states that have adopted legislation containing provisions
comparable to the Delaware Business Trust Act, it is believed that the
limitation of liability of beneficial owners provided by Delaware law should be
respected. In those jurisdictions that have not adopted similar legislative
provisions, it is possible that a court might hold that the shareholders of the
Trust are not entitled to the limitations of liability set forth in Delaware law
or the Trust Instrument and, accordingly, that they may be personally liable for
the obligations of the Trust.
In order to protect shareholders from such potential liability, the
Trust Instrument requires that every written obligation of the Trust or any
series thereof contain a statement to the effect that such obligation may only
be enforced against the assets of the Trust or such series. The Trust
Instrument also provides for indemnification from the assets of the relevant
series for all losses and expenses incurred by any shareholder by reason of
being or having been a shareholder, and that the Trust shall, upon request,
assume the defense of any such claim made against
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<PAGE>
such shareholder for any act or obligation of the relevant series and satisfy
any judgment thereon from the assets of that series.
As a result, the risk of a Berger Small Company Growth Fund or Berger
New Generation Fund shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself would
be unable to meet its obligations. The Trust believes that, in view of the
above, the risk of personal liability to shareholders of the Fund is remote.
The trustees intend to conduct the operations of the Trust and the Funds so as
to avoid, to the extent possible, liability of shareholders for liabilities of
the Trust or the Funds.
Shares of the Funds have no preemptive rights, and since each Fund has
only one class of securities there are no sinking funds or arrearage provisions
which may affect the rights of the Fund shares. Fund shares have no conversion
or subscription rights. Shares of the Funds may be transferred by endorsement,
or other customary methods, but none of the Funds is bound to recognize any
transfer until it is recorded on its books.
Insofar as the management of the Funds is aware, as of October 4, 1996,
no person owned, beneficially or of record, more than 5% of the outstanding
shares of any of the Funds, except for Charles Schwab & Co. Inc. ("Schwab"), 101
Montgomery Street, San Francisco, California 94104, which owned of record
25.94%, 28.52%, 27.73% and 19.86% of the outstanding shares of the Berger 100
Fund, the Berger Growth and Income Fund, the Berger Small Company Growth Fund
and the Berger New Generation Fund, respectively, and National Financial
Services Corporation ("Fidelity"), 82 Devonshire Street, R20A, Boston, MA 02109,
which owned of record 5.04%, 8.81% and 7.10% of the outstanding shares of the
Berger Growth and Income Fund, the Berger Small Company Growth Fund and the
Berger New Generation Fund, respectively. According to information provided by
Schwab and Fidelity, Schwab and Fidelity hold such shares as nominee for the
beneficial owners of such shares (none of whom own more than 5% of any of the
Fund's outstanding shares), and with respect to such shares, Schwab and Fidelity
have no investment discretion and, as nominee holders, only limited
discretionary voting power.
OTHER INFORMATION
Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado,
acts as counsel to the Funds.
Price Waterhouse LLP, 950 Seventeenth Street, Denver, Colorado, acted as
independent accountants for each Fund for the fiscal year ended September 30,
1996.
The Berger 100 Fund, the Berger Growth and Income Fund and the Berger
Investment Portfolio Trust have each filed with the Securities and Exchange
Commission, Washington, D.C., a Registration Statement under the Securities Act
of 1933, as
-44-
<PAGE>
amended, with respect to the securities of the Funds of which this Statement of
Additional Information is a part. If further information is desired with respect
to any of the Funds or such securities, reference is made to the Registration
Statements and the exhibits filed as a part thereof.
FINANCIAL STATEMENTS
The statement of assets and liabilities, including the schedule of
investments, and the related statements of operations and of changes in net
assets and the financial highlights for the Funds for the fiscal year ended
September 30, 1996, and in each case the Report of Independent Accountants
thereon dated October 29, 1996, are incorporated by reference into this
Statement of Additional Information from the Annual Report to Shareholders dated
September 30, 1996, for each of the Funds. A copy of the 1996 Annual Report for
each of the Funds is enclosed with this Statement of Additional Information.
The report of the Funds' prior independent accountants, dated October
28, 1994, to the extent it covers the financial highlights for any of the Funds
for any of the years ended September 30, 1994, 1993 or 1992, is incorporated by
reference into this Statement of Additional Information from the Annual Report
to Shareholders dated September 30, 1994, for each of such Funds. A copy of the
1994 Annual Report for each of such Funds may be obtained upon request without
charge by calling the Funds at 1-800-333-1001.
-45-
<PAGE>
APPENDIX A
HIGH-YIELD/HIGH RISK CONVERTIBLE BONDS
The Funds may purchase securities which are convertible into common
stock when the Funds' management believes they offer the potential for a higher
total return than nonconvertible securities. While fixed income securities
generally have a priority claim on a corporation's assets over that of common
stock, some of the convertible securities which the Funds may hold are
high-yield/high-risk securities that are subject to special risks, including the
risk of default in interest or principal payments which could result in a loss
of income to a Fund or a decline in the market value of the securities.
Convertible securities often display a degree of market price volatility that is
comparable to common stocks.
Specifically, corporate debt securities which are below investment grade
(securities rated Ba or lower by Moody's or BB or lower by Standard & Poor's)
and unrated securities which a Fund may purchase and hold are subject to a
higher risk of non-payment of principal or interest, or both, than higher grade
debt securities. Generally speaking, the lower the quality of a debt security
(which may be reflected in its Moody's and/or Standard & Poor's ratings), the
higher the yield it will provide, but the greater the risk that interest or
principal payments will not be made when due. Thus, the lower the grade of a
security, the more speculative characteristics it generally has. Information
about the ratings of Moody's and Standard & Poor's, and the investment risks
associated with the various ratings, is set forth below.
The market prices of these lower grade convertible securities are
generally less sensitive to interest rate changes than higher-rated investments,
but more sensitive to economic changes or individual corporate developments.
Periods of economic uncertainty and change can be expected to result in
volatility of prices of these securities. Lower rated securities also may have
less liquid markets than higher rated securities, and their liquidity as well as
their value may be adversely affected by poor economic conditions. Adverse
publicity and investor perceptions as well as new or proposed laws may also have
a negative impact on the market for high-yield/high-risk bonds.
CORPORATE BOND RATINGS
The ratings of fixed-income securities by Moody's and Standard & Poor's
are a generally accepted measurement of credit risk. However, they are subject
to certain limitations. Ratings are generally based upon historical events and
do not necessarily reflect the future. In addition, there is a period of time
between the issuance of a rating and the update of the rating, during which time
a published rating may be inaccurate.
-46-
<PAGE>
KEY TO MOODY'S CORPORATE RATINGS
Aaa-Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa-Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A-Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa-Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
Ba-Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during good and bad times over the future. Uncertainty of position
characterizes bonds of this class.
B-Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa-Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca-Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
-47-
<PAGE>
C-Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Note: Moody's applies numerical modifiers, 1, 2 and 3 in each generic
rating classification from Aa through B in its corporate bond rating system.
The modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic
category.
KEY TO STANDARD & POOR'S CORPORATE RATINGS
AAA-Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA-Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A-Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB-Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions, or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
BB, B, CCC, CC AND C-Debt rated BB, B, CCC, CC and C is regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are out-weighed by the large uncertainties or major risk
exposures to adverse conditions.
C1-The rating C1 is reserved for income bonds on which no interest is
being paid.
D-Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.
PLUS (+) OR MINUS (-)-The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
rating categories.
-48-
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS:
(a) FINANCIAL STATEMENTS. Condensed financial information is
included in the Prospectus. The following financial statements are incorporated
by reference from the Fund's Annual Report dated September 30, 1996, into the
Statement of Additional Information:
Report of the Independent Accountants, dated October 29, 1996;
Schedule of Investments as of September 30, 1996; Statement of Assets and
Liabilities as of September 30, 1996; Statement of Operations for the Year Ended
September 30, 1996; Statement of Changes in Net Assets for the Years Ended
September 30, 1996 and 1995; Notes to Financial Statements, September 30, 1996;
and Financial Highlights for the periods indicated.
(b) EXHIBITS.
The Exhibit Index following the signature pages below is
incorporated herein by reference.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None.
Item 26. NUMBER OF HOLDERS OF SECURITIES
The number of record holders of Capital Stock of the Registrant
(the only class of securities outstanding) as of September 30, 1996, was as
follows:
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
Capital Stock 44,250
Item 27. INDEMNIFICATION
Article XXVII, Section 7 of the Fund's Bylaws provides for
indemnification of certain persons acting on behalf of the Fund to the full
extent permitted by the Maryland General Corporation Law and the Investment
Company Act of 1940. In general, directors, officers and employees will be
indemnified against liability and against all expenses of litigation incurred by
them in connection with any claim, action, suit or proceeding (or settlement of
same) in which they become involved by virtue of their Fund office, unless their
conduct is determined to
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<PAGE>
constitute willful misfeasance, bad faith, gross negligence or reckless
disregard of their duties, or unless it has been determined that they have not
acted in good faith in the reasonable belief that their actions were in or not
opposed to the best interests of the Fund or, in the case of criminal
proceedings, unless they had reasonable cause to believe that their conduct was
unlawful. The Fund also may advance money for these expenses, provided that the
director, officer or employee undertakes to repay the Fund if his conduct is
later determined to preclude indemnification. The Fund has the power to
purchase insurance on behalf of its directors, officers, employees and agents,
whether or not it would be permitted or required to indemnify them for any such
liability under the Bylaws or applicable law, and the Fund has purchased and
maintains an insurance policy covering such persons against certain liabilities
incurred in their official capacities.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The business of Berger Associates, Inc., the investment adviser
of the Registrant, is described in the Prospectus in Section 6 and in the
Statement of Additional Information in Section 4 which are included in this
Registration Statement.
William M.B. Berger, Rodney L. Linafelter, William R. Keithler
and Kevin R. Fay have no business, profession, vocation or employment of a
substantial nature other than their positions with the investment adviser, and
have had no prior business, profession, vocation or employment of a substantial
nature within the preceding two years other than as shown in Section 3 of the
Statement of Additional Information.
Gerard M. Lavin, President and a director of Berger Associates,
is also President and a trustee of the Berger Institutional Products Trust, and
serves as an officer of DST Systems, Inc., 1055 Broadway, 9th Floor, Kansas
City, MO 64105 (provider of information and transaction processing and
recordkeeping services for various mutual funds), and as a director of First of
Michigan Capital Corp. (holding company) and First of Michigan Corp. (broker-
dealer), 100 Renaissance Center, Detroit, MI 48243. From February 1992 to March
1995, Mr. Lavin served as President and CEO of Investors Fiduciary Trust
Company.
Craig D. Cloyed, Vice President and Chief Marketing Officer of
Berger Associates, was formerly (September 1989 to August 1995) Senior Vice
President of INVESCO Funds Group (mutual funds).
Landon H. Rowland, a director of Berger Associates, also serves
as President, Chief Executive Officer and a director of Kansas City Southern
Industries, Inc., 114 W. 11th Street, Kansas City, MO 64105 (a publicly traded
holding company whose primary subsidiaries are engaged in transportation and
financial asset management, and which owns approximately 48% of the
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<PAGE>
outstanding shares of DST Systems, Inc., a publicly traded information and
transaction processing company). Mr. Rowland also serves as Chairman of the
Board and a director of The Kansas City Southern Railway Company, and until
September 1995, served as Chairman of the Board and a director of DST Systems,
Inc.
Item 29. PRINCIPAL UNDERWRITERS
Not applicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained
by Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained as follows:
(a) Shareholder records are maintained by the Registrant's sub-
transfer agent, DST Systems, Inc., P.O. Box 419958, Kansas
City, MO 64141;
(b) Accounting records relating to cash and other money
balances; asset, liability, reserve, capital, income and
expense accounts; portfolio securities; purchases and
sales; and brokerage commissions are maintained by the
Registrant's Recordkeeping and Pricing Agent, Investors
Fiduciary Trust Company ("IFTC"), 127 West 10th Street,
Kansas City, Missouri 64105. Other records of the
Registrant relating to purchases and sales; the Trust
Instrument, minute books and other trust records; brokerage
orders; performance information and other records are
maintained at the offices of the Registrant at
210 University Boulevard, Suite 900, Denver, Colorado
80206.
Item 31. MANAGEMENT SERVICES
The Registrant has no management-related service contract which
is not discussed in Parts A and B of this form. See Section 7 of the Prospectus
and Section 5 of the Statement of Additional Information for a discussion of the
Recordkeeping and Pricing Agent Agreement entered into between the Registrant
and IFTC and the Administrative Services Agreement entered into between the
Registrant and Berger Associates, Inc., investment adviser to the Registrant.
Item 32. UNDERTAKINGS
A. The Registrant undertakes to comply with the following
policy with respect to calling meetings of shareholders for the purpose of
voting upon the removal of any director of the Registrant and facilitating
shareholder communications related to such meetings:
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<PAGE>
1. The Board of Directors will promptly call a meeting of
shareholders for the purpose of voting upon the removal of
any director of the Registrant when requested in writing to
do so by the record holders of at least 10% of the
outstanding shares of the Registrant.
2. Whenever ten or more shareholders of record who have been
shareholders of the Registrant for at least six months, and
who hold in the aggregate either shares having a net asset
value of at least $25,000 or at least 1% of the outstanding
shares of the Registrant, whichever is less, apply to the
Board of Directors in writing stating that they wish to
communicate with other shareholders with a view to
obtaining signatures to request such a meeting, and deliver
to the Board a form of communication and request which they
wish to transmit, the Board of Directors within 5 business
days after receipt of such application either will (a) give
such applicants access to a list of the names and addresses
of all shareholders of record of the Registrant, or
(b) inform such applicants of the approximate number of
shareholders of record and the approximate cost of mailing
the proposed communication and form of request.
3. If the Board of Directors elects to follow the course
specified in clause (b), above, the Board of Directors,
upon the written request of such applicants accompanied by
tender of the material to be mailed and the reasonable
expenses of the mailing, will, with reasonable promptness,
mail such material to all shareholders of record, unless
within 5 business days after such tender the Board of
Directors shall mail to such applicants and file with the
Securities and Exchange Commission (the "Commission"),
together with a copy of the material requested to be
mailed, a written statement signed by at least a majority
of the directors to the effect that in their opinion either
such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained
therein not misleading, or would be in violation of
applicable law, and specifying the basis of such opinion.
4. If the Commission enters an order either refusing to
sustain any of the Board's objections or declaring that any
objections previously sustained by the Commission have been
resolved by the applicants, the Board of Directors will
cause
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<PAGE>
the Registrant to mail copies of such material to all
shareholders of record with reasonable promptness after the
entry of such order and the renewal of such tender.
B. The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, and State of Colorado, on the
30th day of October, 1996.
BERGER ONE HUNDRED AND ONE FUND, INC.
(Registrant)
By /s/ Rodney L. Linafelter
---------------------------------
Name: Rodney L. Linafelter
--------------------------------
Title: President
---------------------------
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/s/ Rodney L. Linafelter President (Principal October 30 , 1996
- ------------------------------- Executive Officer)
Rodney L. Linafelter and Director
/s/ Kevin R. Fay Vice President, October 30, 1996
- ------------------------------- Secretary and Treasurer
Kevin R. Fay (Principal Financial
and Accounting Officer)
/s/ Dennis E. Baldwin Director October 30, 1996
- -------------------------------
Dennis E. Baldwin*
/s/ William M.B. Berger Director October 30, 1996
- -------------------------------
William M.B. Berger*
/s/ Louis R. Bindner Director October 30, 1996
- -------------------------------
Louis R. Bindner*
/s/ Katherine A. Cattanach Director October 30, 1996
- -------------------------------
Katherine A. Cattanach*
/s/ Lucy Black Creighton Director October 30, 1996
- -------------------------------
Lucy Black Creighton*
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<PAGE>
/s/ Paul R. Knapp Director October 30, 1996
- -------------------------------
Paul R. Knapp*
/s/ Harry T. Lewis, Jr. Director October 30, 1996
- -------------------------------
Harry T. Lewis, Jr.*
/s/ Michael Owen Director October 30, 1996
- --------------------------------
Michael Owen*
/s/ William Sinclaire Director October 30, 1996
- --------------------------------
William Sinclaire*
/s/ Rodney L. Linafelter
- ---------------------------------
*By Rodney L. Linafelter,
Attorney-in-Fact
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<PAGE>
EXHIBIT INDEX
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- ----------------- ------------ -----------------------------
* Exhibit 1.1 Articles of Incorporation
(10/22/66)
* Exhibit 1.2 Articles of Amendment
(10/22/66)
* Exhibit 1.3 Articles of Amendment
(6/26/90)
* Exhibit 1.4 Articles Supplementary
(7/1/93)
* Exhibit 2
Restated Bylaws
Exhibit 3 Not applicable
* Exhibit 4
Specimen Stock Certificate
* Exhibit 5 Form of Investment Advisory
Agreement
Exhibit 6 Not applicable
Exhibit 7 Not applicable
* Exhibit 8 Form of Custody Agreement
** Exhibit 9.1 EX-99.B9.1 New Account Application
* Exhibit 9.2 Form of Administrative
Services Agreement
* Exhibit 9.3 Form of Recordkeeping and
Pricing Agent Agreement
* Exhibit 9.4 Form of Agency Agreement
* Exhibit 9.5 Services Agreement, dated June
17, 1992, between Berger
Associates, Inc., Charles
Schwab & Co., Inc. and Berger
One Hundred and One Fund,
Inc., as amended and effective
as to the Fund on February 1,
1993
** Exhibit 10 EX-99.B10 Opinion and consent of Davis,
Graham & Stubbs LLP
** Exhibit 11 EX-99.B11 Consent of Price Waterhouse
LLP
Exhibit 12 Not applicable
Exhibit 13 Not applicable
* Exhibit 14.1 Form 5305-A Individual
Retirement Custodial Account
and Related Documents
* Exhibit 14.2 Investment Company Institute
Prototype Money Purchase
Pension and Profit Sharing
Plan Basic
<PAGE>
Document #01 and Related
Documents
* Exhibit 14.3 403(b)(7) Custodial Account
Agreement and Related
Documents
* Exhibit 15 Rule 12b-1 Plan, as amended
* Exhibit 16 Computation of Total Return
** Exhibit 17 EX-27.G&I Financial Data Schedule
Exhibit 18 Not Applicable
_______________________
* Filed previously and incorporated herein by reference.
** Filed herewith.
<PAGE>
EXHIBIT 9.1
NEW ACCOUNT APPLICATION
THE BERGER FUNDS
[LOGO]
PID # For assistance call: (800) 551-5849
------------------------
STEP 1 REGISTER YOUR ACCOUNT (PLEASE CHOOSE ONE)
PLEASE TYPE OR PRINT CLEARLY.
<TABLE>
<S> <C> <C>
[ ] INDIVIDUAL ACCOUNT
------------------------------------------ --------------------------------------
Your Name: FIRST MIDDLE LAST Your Social Security Number
[ ] JOINT OWNER
------------------------------------------
Joint Owner's Name: FIRST MIDDLE LAST
[ ] GIFT/TRANSFER TO MINOR
------------------------------------------ --------------------------------------
Custodian's Name: FIRST MIDDLE LAST Minor's Social Security Number
(LIST ONE NAME ONLY
FOR EACH LINE.)
------------------------------------------ --------------------------------------
Minor's Name: FIRST MIDDLE LAST under the ___ Uniform Gifts/Transfers
(State) To Minors Act
[ ] TRUST
------------------------------------------ --------------------------------------
Trustee(s)'s Name: Date of Trust
------------------------------------------ --------------------------------------
Name of Trust Agreement Trust's Taxpayer Identification Number
[ ] CORPORATE/OTHER
------------------------------------------ --------------------------------------
Name of Corporation or Other Entity Taxpayer Identification Number
(PLEASE INCLUDE A
CORPORATE RESOLUTION.)
------------------------------------------
Type of Entity
STEP 2 YOUR MAILING ADDRESS
( ) ( )
- ------------------------------------------------------------------ ---------------------------------------
Street Address Apt./Suite* Daytime Telephone Evening Telephone
- ------------------------------------------------------------------ ---------------------------------------
City State Zip Electronic Mail Address
CITIZENSHIP: [ ] US Citizen [ ] Non-Resident Alien ( )
[ ] Resident Alien Country of Tax Residency ---------------------------------------
--------- Fax No.
STEP 3 FUND SELECTION
FUND NAME (FUND CODE) MINIMUM INITIAL INVESTMENT YOUR INITIAL AUTOMATIC INVESTMENT PLAN
INVESTMENT $50 MINIMUM PER BERGER FUND,
$100 MINIMUM PER CAT PORTFOLIO
BERGER 100 FUND (43).............. $2,000 ............................ $ $
------------- ------------
BERGER GROWTH AND INCOME
FUND (44) ....................... $2,000 ............................ $ $
------------- ------------
BERGER SMALL COMPANY GROWTH
FUND (345) ...................... $2,000 ............................ $ $
------------- ------------
BERGER NEW GENERATION
FUND (344) ...................... $2,000 ........................... $ $
------------- ------------
BERGER/BIAM INTERNATIONAL FUND
(349) ........................... $2,000 ........................... $ $
------------- ------------
CASH ACCOUNT TRUST (CAT)* (CHECKWRITING IS AVAILABLE - COMPLETE STEP 8)
MONEY MARKET PORTFOLIO (346) ..... $1,000 ........................... $ $
------------- ------------
GOVERNMENT SECURITIES
PORTFOLIO (347) ................ $1,000 ........................... $ $
------------- ------------
TAX-EXEMPT PORTFOLIO (348) ....... $1,000 ........................... $ $
------------- ------------
- -----------------------
FOR YOUR AUTOMATIC INVESTMENT PLAN PLEASE CHECK ONE OR BOTH OF THE
FOLLOWING WITHDRAWAL DATES:
[ ] 5th day of month
[ ] 20th day of month
(Step 6 must be completed)
*CASH ACCOUNT TRUST IS A SEPARATELY MANAGED, UNAFFILIATED
MONEY MARKET MUTUAL FUND. USE OF THE CASH ACCOUNT TRUST
AS AN INVESTMENT DIRECTLY OR BY EXCHANGE FROM YOUR BERGER
FUNDS DOES NOT CONSTITUTE AN OFFERING OR RECOMMENDATION
OF THE CAT PORTFOLIOS BY THE BERGER FUNDS OR THEIR
ADVISORS.
ENCLOSE YOUR CHECK MADE PAYABLE TO: THE BERGER FUNDS
STEP 4 DISTRIBUTION OPTIONS
ALL INCOME AND CAPITAL GAINS DISTRIBUTIONS WILL BE REINVESTED UNLESS
YOU CHECK THE BOX(ES) BELOW:
[ ] Pay all income in cash
[ ] Pay all capital gains in cash
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
STEP 5 TELEPHONE TRANSACTION / ON-LINE COMPUTER ACCESS PRIVILEGES
The privileges below allow you to make telephone/on-line purchases, exchanges
and redemptions, subject to the applicable minimums and maximums that are
disclosed in the prospectus. (STEP 6 MUST BE COMPLETED.)
Telephone Transaction Privileges are available on all accounts unless you
specifically decline them below.
[ ] I DECLINE THE USE OF TELEPHONE TRANSACTION PRIVILEGES.
On-line Computer Access Privileges are available on all accounts unless
you specifically decline them below.
[ ] I DECLINE THE USE OF ON-LINE COMPUTER ACCESS.
All telephone and on-line transactions are recorded and written confirmations
indicating the details of all telephone and on-line transactions will be
promptly sent to the shareholder of record. Prior to placing an order the
shareholder may be required to provide certain identifying information. See
the Prospectus for further information.
STEP 6 BANK INFORMATION
YOU MUST COMPLETE THIS STEP IF YOU SELECTED THE AUTOMATIC INVESTMENT PLAN IN
STEP 3. IF YOU DID NOT CHECK A BOX IN STEP 5 BY COMPLETING THE BANK
INFORMATION BELOW, YOU MAY SETTLE PURCHASE AND REDEMPTION TRANSACTIONS MADE
BY TELEPHONE OR ON-LINE VIA COMPUTER ACCESS BY USING WIRE OR ELECTRONIC FUNDS
TRANSFER.
- ---------------------------------------------------------
Name of Bank Name(s) on Bank Account
- ---------------------------------------------------------
Street Address Bank Account Number
- ---------------------------------------------------------
City State Zip
- ---------------------------------------------------------
Co-signer Signature (if applicable) Date
Your bank account information must be on file in order to utilize the
Automatic Investment Plan, or to settle by wire or electronic funds transfer
any purchase or redemption transactions made by telephone or by on-line
computer access. The account name(s) at left must exactly match at least one
name in Step 1. Any co-signer of your checking or savings account who is not
a joint owner of the funds must authorize these services by signing at left.
Checking Acct. [ ] Savings Acct. [ ]
PLEASE ATTACH A VOIDED CHECK OR SAVINGS DEPOSIT SLIP.
STEP 7 YOUR SIGNATURE
All of the undersigned represent that they have the authority and legal
capacity to purchase mutual fund shares, all are of legal age in their state
and believe each investment is suitable for themselves. All of the
undersigned have received and read the Prospects for the investment selected,
agree to its terms and agree that by signing below (a) their account will
have exchange privileges with other Berger Funds and the portfolios of the
Cash Account Trust ("CAT") and that all information provided in the above
steps will apply to any Fund or CAT portfolio into which their shares may be
exchanged; (b) they hereby ratify any instructions given on this account and
any account into which they exchange related to the above steps and agree
that neither the Funds, CAT portfolios. Berger Associates nor BBOI Worldwide
will be liable for any loss, cost or expense for acting upon such
instructions (by telephone, computer on-line access or writing) believed to
be genuine and in accordance with the procedures described in the Prospectus;
and (c) their responsibility is to read the Prospectus of any Fund or CAT
portfolio into which they exchange.
Under penalties of perjury, I certify:
(1) The number shown on this form is my correct social security or taxpayer
identification number and (2) I am not subject to backup withholding
because: (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service (IRS) that I am subject to
backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to
backup withholding.
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION
OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
[ ] Check this box ONLY if the IRS has notified you that you are subject to
backup withholding.
- ------------------------------------------------------------------------------
Signature of Owner, Trustee or Custodian Date
(EXACTLY THE SAME AS STEP 1)
- ------------------------------------------------------------------------------
Signature of Joint Owner, (IF APPLICABLE) Date
(EXACTLY THE SAME AS STEP 1)
- --------------------------------------------------------------------------------
STEP 8 CHECKWRITING FOR CASH ACCOUNT TRUST (CAT) PORTFOLIO INVESTORS ONLY
If you would like the ability to write checks against your Cash Account Trust
Portfolios, complete this step:
- ---------------------------------- ---------------------------------------
First Middle Last YOUR SIGNATURE
YOUR NAME (EXACTLY THE SAME AS STEP 1)
- ---------------------------------- ---------------------------------------
First Middle Last JOINT OWNER'S SIGNATURE (IF APPLICABLE)
JOINT OWNER'S NAME (EXACTLY THE SAME AS STEP 1)
[ ] CHECK HERE IF ONLY ONE SIGNATURE IS REQUIRED ON CHECKS.
[ ] CHECK HERE IF BOTH SIGNATURES ARE REQUIRED ON CHECKS.
If neither box is checked, all
checks will require both signatures.
INSTITUTIONAL ACCOUNTS
AFFIX SIGNATURE GUARANTEE STAMP
- ---------------------------------------------------------------------------
Signature Guaranteed by
- ---------------------------------------------------------------------------
Authorized Signature
By signing the signature line in Step 8, the signatory(ies) agree(s) to be
subject to the terms and conditions, guidelines and rules, as now in effect
and as amended from time to time, that pertain to the use of redemption
checks of the Fund(s) applicable to their account; therefore, all registered
owners must sign the signature line in Step 8. All checks will require both
signatures unless otherwise indicated on the face of this form. Each
signatory guarantees the genuineness of the other's signature on this form.
SIGNATURE GUARANTEE (CAT ONLY)
Institutional account please provide a certified copy of your corporate
resolution and affix signature guarantees. Signature guarantee must be
provided by a commercial bank, trust company, member of national
securities exchange, or savings and loan association. A notary public is
not an acceptable guarantor.
FOR FASTEST SERVICE POSSIBLE
FOR THE FASTEST SERVICE POSSIBLE, PLEASE MAKE SURE YOU HAVE COMPLETED EACH
OF THESE ITEMS:
A.) Include your Social Security or Tax ID number in Step 1.
B.) Fill in the amount invested in Step 3.
C.) Attach a voided check if you selected the Automatic Investment Plan in
Step 3, or Telephone Transaction Privileges or On-line Computer Access
in Step 5 and you wish to settle purchase or redemption transactions by
wire or electronic funds transfer.
D.) Sign the form in Step 7 exactly the same as in Step 1.
E.) Complete checkwriting Step 8, if applicable.
F.) Enclose your check made payable to: THE BERGER FUNDS.
G.) Read all the terms applicable to the services you desire.
H.) Return this application in the postage paid envelope enclosed or to:
THE BERGER FUNDS
P.O. Box 419958
Kansas City, MO 64141-6958
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 10
DAVIS, GRAHAM & STUBBS LLP
A Limited Liability Partnership
Attorneys at Law
Suite 4700
370 Seventeenth Street
Denver, Colorado 80202
Telephone 303-892-9400
Facsimile 303-893-1379
October 30, 1996
Berger One Hundred and One Fund, Inc.
210 University Blvd. #900
Denver, Colorado 80206
Re: Public Offering of Capital Stock
Ladies and Gentlemen:
We have acted as counsel for Berger One Hundred and One Fund, Inc. (the
"Fund") in connection with the preparation and filing with the Securities and
Exchange Commission of a Registration Statement (File No. 2-25383) under the
Securities Act of 1933 on Form N-1A, and amendments thereto, with respect to the
offer and sale of shares of Capital Stock ($0.01 par value) of the Fund (the
"Capital Stock"), including the shares registered pursuant to Post-Effective
Amendment No. 44, registering an additional 5,531,864 shares of Capital Stock
pursuant to such Registration Statement, as amended.
We have examined the Fund's Articles of Incorporation and Bylaws, as
amended, the proceedings of its Board of Directors relating to the
authorization, issuance and proposed sale of the Capital Stock and such other
records and documents as we have deemed relevant. Based upon such examination,
it is our opinion that upon the issuance and sale of the 5,531,864 shares of
Capital Stock of the Fund in the manner contemplated by the aforesaid
Registration Statement, as amended, such shares will be validly issued, fully
paid and nonassessable outstanding shares of Capital Stock of the Fund.
We hereby consent to the filing of this opinion as an exhibit to the
aforesaid Registration Statement, as amended.
Sincerely,
DAVIS, GRAHAM & STUBBS LLP
<PAGE>
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. 44 to the registration statement on Form N-1A (the
"Registration Statement") of our report dated October 29, 1996, relating to
the financial statements and financial highlights appearing in the September
30, 1996 Annual Report to Shareholders of Berger Growth and Income Fund, Inc.,
which is also incorporated by reference into the Registration Statement. We
also consent to the references to us under the heading "Condensed Financial
Information" in the Prospectus and under the heading "Additional Information"
in the Statement of Additional Information.
Price Waterhouse LLP
Denver, Colorado
October 29, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000074529
<NAME> BERGER ONE HUNDRED & ONE FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 262,250
<INVESTMENTS-AT-VALUE> 314,445
<RECEIVABLES> 2,998
<ASSETS-OTHER> 851
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 318,294
<PAYABLE-FOR-SECURITIES> 2,345
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 410
<TOTAL-LIABILITIES> 2,756
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 235,163
<SHARES-COMMON-STOCK> 22,441
<SHARES-COMMON-PRIOR> 27,500
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (23)
<ACCUMULATED-NET-GAINS> 28,204
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 52,194
<NET-ASSETS> 315,538
<DIVIDEND-INCOME> 6,380
<INTEREST-INCOME> 3,438
<OTHER-INCOME> 0
<EXPENSES-NET> 5,132
<NET-INVESTMENT-INCOME> 4,686
<REALIZED-GAINS-CURRENT> 46,153
<APPREC-INCREASE-CURRENT> (17,526)
<NET-CHANGE-FROM-OPS> 33,313
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,762
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 23
<NUMBER-OF-SHARES-SOLD> 3,798
<NUMBER-OF-SHARES-REDEEMED> 9,196
<SHARES-REINVESTED> 339
<NET-CHANGE-IN-ASSETS> (38,858)
<ACCUMULATED-NII-PRIOR> 28
<ACCUMULATED-GAINS-PRIOR> (17,949)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,496
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 5,179
<AVERAGE-NET-ASSETS> 332,769
<PER-SHARE-NAV-BEGIN> 12.89
<PER-SHARE-NII> .20
<PER-SHARE-GAIN-APPREC> 1.17
<PER-SHARE-DIVIDEND> .20
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.06
<EXPENSE-RATIO> 1.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
