<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 25, 1998
1933 Act File No. 2-25384
1940 Act File No. 811-1382
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. 59 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 38 /X/
(Check appropriate box or boxes)
THE ONE HUNDRED 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
---------------------------
Gerard M. Lavin, 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)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/X/ on January 28, 1999, 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.
Title of Securities Being Registered: Capital Stock
------------------------------------------
<PAGE>
January 28, 1999
THE BERGER FUNDS
Prospectus
[WEST FORK PHOTO]
BERGER NEW GENERATION FUND
- --------------------------------------------------
BERGER SELECT FUND
- --------------------------------------------------
BERGER SMALL COMPANY GROWTH FUND
- --------------------------------------------------
BERGER SMALL CAP VALUE FUND ~ INVESTOR SHARES
- --------------------------------------------------
BERGER MID CAP GROWTH FUND
- --------------------------------------------------
BERGER MID CAP VALUE FUND
- --------------------------------------------------
BERGER 100 FUND
- --------------------------------------------------
BERGER/BIAM INTERNATIONAL FUND
- --------------------------------------------------
BERGER GROWTH AND INCOME FUND
- --------------------------------------------------
BERGER BALANCED FUND
- --------------------------------------------------
The Securities
and Exchange
Commission has
not approved or
disapproved any
shares offered in
this prospectus
as an invest- Like all mutual
ment, or funds, an invest-
determined ment in the
whether this pro- Berger Funds is
spectus is not a bank There is no
accurate or com- deposit and is guarantee that
plete. Anyone who not insured or the Funds will have the poten-
tells you guaranteed by the meet their tial to make
otherwise is FDIC or any other investment money, you could
committing a government goals, and also lose money
crime. agency. although you in the Funds.
<PAGE>
<TABLE>
<C> <S> <C> <C> <C>
1 THE BERGER FUNDS are a no-load family of mutual funds. A mutual fund pools money from shareholders
and invests in a portfolio of securities. Each of the following sections introduces a Fund, its
goal(s), principal investment strategies and principal risks. They also contain expense and
performance information.
2 BERGER NEW GENERATION FUND
4 BERGER SELECT FUND
6 BERGER SMALL COMPANY GROWTH FUND
8 BERGER SMALL CAP VALUE FUND ~ INVESTOR SHARES
10 BERGER MID CAP GROWTH FUND
12 BERGER MID CAP VALUE FUND
14 BERGER 100 FUND
16 BERGER/BIAM INTERNATIONAL FUND
18 BERGER GROWTH AND INCOME FUND
20 BERGER BALANCED FUND
20 INVESTMENT TECHNIQUES, SECURITIES AND THE ASSOCIATED RISKS
22 Risk and investment table
24 Risk and investment glossary
26 BUYING SHARES
INFORMATION
ABOUT YOUR
ACCOUNT
27 SELLING (REDEEMING) SHARES
28 Exchanging shares
28 Signature Guarantees/special documentation
28 Your share price
29 Other information about your account
30 Distributions and taxes
31 Tax-sheltered retirement plans
32 ORGANIZATION OF THE BERGER FUNDS FAMILY
32 Investment managers
34 12b-1 arrangements
34 Special fund structures
35 FINANCIAL HIGHLIGHTS FOR THE BERGER FUNDS FAMILY
35 Berger New Generation Fund
36 Berger Select Fund
37 Berger Small Company Growth Fund
38 Berger Small Cap Value Fund ~ Investor Shares
40 Berger Mid Cap Growth Fund
41 Berger Mid Cap Value Fund
42 Berger 100 Fund
43 Berger/BIAM International Fund
45 Berger Growth and Income Fund
46 Berger Balanced Fund
</TABLE>
<PAGE>
BERGER
NEW GENERATION
FUND
[BERGER NEW GENERATION FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BENGX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for capital appreciation. In pursuing
that goal, the Fund primarily invests in the common stocks of companies with
potential for significant earnings growth.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - The Fund focuses on leading-edge
companies with new ideas, technologies or methods of doing business. Its
investment manager seeks companies it believes have the potential to change the
direction or dynamics of the industries in which they operate or significantly
influence the way businesses or consumers conduct their affairs.
The Fund's investment manager generally looks for companies:
- - In business sectors characterized by rapid change, regardless of the company's
size
- - With favorable long-term growth potential due to their new or innovative
products or services
- - With management and financial strength to fulfill their vision and grow their
business.
The Fund invests in common stocks, both domestic and foreign, and other
securities with equity features, such as convertible securities and preferred
stocks. Due to the Fund's focus on companies with the characteristics described
above, the Fund generally is weighted toward small to mid-sized market
capitalization companies, although it is free to invest in companies with larger
market capitalizations as well. The Fund may also invest in government
securities or other short-term investments. The Fund's investment manager has in
the past and may in the future actively trade the portfolio in pursuit of the
Fund's goal. Due to this, the annual portfolio turnover rate may be higher than
other Berger Funds.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
Given the Fund's weighting toward small to mid-sized companies in rapidly
changing industries, its share price may fluctuate more than that of funds
invested in larger companies or more stable industries. Smaller companies may
pose greater risk due to narrow product lines, limited financial resources, less
depth in management or a limited trading market for their stocks. In addition,
products and services in rapidly changing industries may be subject to intense
competition and rapid obsolescence and may require regulatory approvals prior to
their use. The Fund's investments are often focused in a small number of
business sectors. In addition, the Fund may invest in certain securities with
unique risks, such as securities of companies with limited operating histories
and foreign securities.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1998. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
97 24.22%
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
2
<PAGE>
BERGER
NEW GENERATION
FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (MARCH 29, 1996)
- -----------------------------------------------------------
<S> <C> <C>
The Fund XX% XX%
- -----------------------------------------------------------
S&P 500 XX% XX%
- -----------------------------------------------------------
</TABLE>
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ---------------------------------------------------
<S> <C>
Management fee .90
- ---------------------------------------------------
Distribution (12b-1) fee .25
- ---------------------------------------------------
Other expenses .57
- ---------------------------------------------------
Total Annual Fund Operating Expenses 1.72
- ---------------------------------------------------
</TABLE>
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for them indirectly because they reduce the Fund's return. Fund
expenses include management fees, 12b-1 fees and administrative costs such as
shareholder recordkeeping and reports, custodian and pricing services and
registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 175
- ---------------------------------------------------
Three 542
- ---------------------------------------------------
Five 933
- ---------------------------------------------------
Ten 2,030
- ---------------------------------------------------
</TABLE>
3
<PAGE>
BERGER
SELECT FUND
[BERGER SELECT FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BESLX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for capital appreciation. In pursuing
that goal, the Fund primarily invests in the common stocks of companies with a
proven track record and superior potential for earnings growth.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - This nondiversified Fund normally
invests in a core portfolio of 20-30 common stocks. The stock selection focuses
on companies whose growth potential is not yet fully reflected in the company's
stock price, but stocks are often sold quickly to respond to short-term market
price movements.
The Fund's investment manager generally looks for companies with:
- - Reasonably priced securities which occupy a dominant position in a market due
to size, products or services
- - Strong, capable management teams with clearly defined strategies for growth
- - Conservatively financed balance sheets and a catalyst for positive earnings
developments such as evolving product cycles, special situations or changing
economic conditions.
The Fund will from time to time take substantial positions in convertible
securities, preferred stocks, government securities or other short-term
investments. The Fund may also invest in foreign securities. The Fund's
investment manager has in the past and expects in the future to actively trade
the portfolio in pursuit of the Fund's goal. Due to this and the Fund's
relatively small number of holdings, the annual portfolio turnover rate will be
higher than other Berger Funds as well as many other mutual funds.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than the market in general and most
equity funds due to its ability as a nondiversified fund to take larger
positions in a smaller number of companies. As a result, the gains or losses on
a single stock will have a greater impact on the Fund's share price. The Fund's
investments are often focused in a small number of business sectors. In
addition, the Fund may invest in certain securities with unique risks, such as
special situations, small companies and foreign securities.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
return since it began operations through December 31, 1998. This return includes
the reinvestment of all dividends and capital gains distributions and reflects
Fund expenses. As with all mutual funds, past performance does not guarantee
future results.
TOTAL RETURN FROM DECEMBER 31, 1997
THROUGH DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
Average annual return is a measure of the Fund's performance over time. The
Fund's average annual return is compared with the Standard & Poor's 500 Index
(S&P 500). While the Fund does not seek to match the returns of the S&P 500,
this index is a good indicator of general stock market performance. You may not
invest in the S&P 500 and unlike the Fund, it does not incur fees or charges.
AVERAGE ANNUAL RETURN AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (DECEMBER 31, 1997)
- ----------------------------------------------------------
<S> <C> <C>
The Fund
- ----------------------------------------------------------
S&P 500
- ----------------------------------------------------------
</TABLE>
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .75
- ----------------------------------------------------
Distribution (12b-1) fee .25
- ----------------------------------------------------
Other expenses .48
- ----------------------------------------------------
Total Annual Fund Operating Expenses 1.48
- ----------------------------------------------------
</TABLE>
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for
4
<PAGE>
BERGER
SELECT FUND
them indirectly because they reduce the Fund's return. Fund expenses include
management fees, 12b-1 fees and administrative costs such as shareholder
recordkeeping and reports, custodian and pricing services and registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 151
- ---------------------------------------------------
Three 468
- ---------------------------------------------------
Five 808
- ---------------------------------------------------
Ten 1,768
- ---------------------------------------------------
</TABLE>
5
<PAGE>
BERGER
SMALL COMPANY
GROWTH FUND
[BERGER SMALL COMPANY GROWTH FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BESCX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for capital appreciation. In pursuing
that goal, the Fund primarily invests in the common stocks of small companies
with the potential for rapid earnings growth.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - The Fund's stock selection focuses on
companies that either occupy a dominant position in an emerging industry or have
a growing market share in a larger, fragmented industry.
The Fund's investment manager generally looks for companies with:
- - Strong entrepreneurial management with proven track records
- - A catalyst for rapid earnings growth, such as new products, ideas or plans to
enter new markets
- - Relatively strong balance sheets.
Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization, at the time of
initial purchase, is less than the 12-month average of the maximum market
capitalization for companies included in the Russell 2000 Index (Russell 2000).
This average is updated monthly. In addition to common stocks, the Fund may
invest in other securities with equity features, such as convertible securities,
preferred stocks, warrants and rights. The balance of the Fund may be invested
in larger companies, government securities or other short-term investments.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of mid-sized and large companies. Occasionally, small company
securities may underperform as compared to the securities of larger companies.
They may also pose greater risk due to narrow product lines, limited financial
resources, less depth in management or a limited trading market for their
stocks. The Fund's investments are often focused in a small number of business
sectors. In addition, the Fund may invest in certain securities with unique
risks, such as securities of companies with limited operating histories and
foreign securities.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1998. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund began.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
94 13.73%
95 33.80%
96 16.77%
97 16.16%
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Russell 2000. While the
Fund does not seek to match the returns of the Russell 2000, this index is a
good indicator of small company stock market performance. You may not invest in
the Russell 2000 and unlike the Fund, it does not incur fees or charges.
6
<PAGE>
BERGER
SMALL COMPANY
GROWTH FUND
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR 5 YEARS (DECEMBER 30, 1993)
- ------------------------------------------------------------
<S> <C> <C> <C>
The Fund XX% XX% XX%
- ------------------------------------------------------------
Russell
2000 XX% XX% XX%
- ------------------------------------------------------------
</TABLE>
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .90
- ----------------------------------------------------
Distribution (12b-1) fee(1) .25
- ----------------------------------------------------
Other expenses .44
- ----------------------------------------------------
Total Annual Fund Operating Expenses(1) 1.59
- ----------------------------------------------------
</TABLE>
1. Adjusted to reflect current 12b-1 fee after termination of waiver.
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for them indirectly because they reduce the Fund's return. Fund
expenses include management fees, 12b-1 fees and administrative costs such as
shareholder recordkeeping and reports, custodian and pricing services and
registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 162
- ---------------------------------------------------
Three 502
- ---------------------------------------------------
Five 866
- ---------------------------------------------------
Ten 1,889
- ---------------------------------------------------
</TABLE>
7
<PAGE>
BERGER SMALL CAP
VALUE FUND ~
INVESTOR SHARES
[BERGER SMALL CAP VALUE FUND INVESTOR SHARES PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BSCVX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for capital appreciation. In pursuing
that goal, the Fund primarily invests in the common stocks of small companies
whose stock prices are believed to be undervalued.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - The Fund's securities selection
focuses on companies that are out of favor with markets or have not yet been
discovered by the broader investment community.
The Fund's investment manager generally looks for companies with:
- - A low price relative to their assets, earnings, cash flow or business
franchise
- - Products and services that give them a competitive advantage
- - Quality balance sheets and strong management.
The investment manager's philosophy is to weigh a security's downside risk
before considering its upside potential, which may help provide an element of
capital preservation. Under normal circumstances, the Fund invests at least 65%
of its assets in equity securities of small companies whose market
capitalization, at the time of initial purchase, is less than the 12-month
average of the maximum market capitalization for companies included in the
Russell 2000 Index (Russell 2000). This average is updated monthly. In addition
to common stocks, the Fund may invest in other securities with equity features,
such as convertible securities, preferred stocks, warrants and rights. The
balance of the Fund may be invested in larger companies, government securities
or other short-term investments.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of mid-sized and large companies. Occasionally, small company
securities may underperform as compared to the securities of larger companies.
They may also pose greater risk due to narrow product lines, limited financial
resources, less depth in management or a limited trading market for their
stocks. The Fund's investments are often focused in a small number of business
sectors. In addition, the Fund may invest in certain securities with unique
risks, such as special situations and foreign securities.
See "Investment Techniques, Securities and the Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
annual return for the ten-year period through December 31, 1998. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
89 26.43%
90 -21.92%
91 24.97%
92 19.61%
93 16.27%
94 6.70%
95 26.06%
96 25.60%
97 36.51%
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Russell 2000. While the
Fund does not seek to match the returns of the Russell 2000, this index is a
good indicator of small company stock market performance. You may not invest in
the Russell 2000 and unlike the Fund, it does not incur fees or charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998(1)
<TABLE>
<CAPTION>
1 YEAR 5 YEARS 10 YEARS
- ---------------------------------------------------------------
<S> <C> <C> <C>
The Fund XX% XX% XX%
- ---------------------------------------------------------------
Russell 2000 XX% XX% XX%
- ---------------------------------------------------------------
</TABLE>
1. Returns for periods before February 14, 1997, do not include the .25% 12b-1
fee which has been paid by the Investor Shares class since its inception on that
date.
8
<PAGE>
BERGER SMALL CAP
VALUE FUND ~
INVESTOR SHARES
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .90
- ----------------------------------------------------
Distribution (12b-1) fee .25
- ----------------------------------------------------
Other expenses .41
- ----------------------------------------------------
Total Annual Fund Operating Expenses 1.56
- ----------------------------------------------------
</TABLE>
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for them indirectly because they reduce the Fund's return. Fund
expenses include management fees, 12b-1 fees and administrative costs such as
shareholder recordkeeping and reports, custodian and pricing services and
registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 159
- ---------------------------------------------------
Three 493
- ---------------------------------------------------
Five 850
- ---------------------------------------------------
Ten 1,856
- ---------------------------------------------------
</TABLE>
9
<PAGE>
BERGER
MID CAP GROWTH
FUND
[BERGER MID CAP GROWTH FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BXXXX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for capital appreciation. In pursuing
that goal, the Fund primarily invests in the common stocks of mid-sized
companies with the potential for strong earnings growth.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - Stock selection focuses on companies
that commit their resources to innovative products or services for unique,
changing or rapidly growing markets.
The Fund's investment manager generally looks for companies with:
- - Strong market positions in industries or business sectors that have a good
economic outlook
- - Established organizational structures and strong management teams, and have
the ability to increase their market share in growing industries
- - Strong balance sheets and the ability to efficiently finance their growth
through sufficient resources and access to capital.
Under normal circumstances, the Fund invests at least 65% of its assets in
equity securities of companies whose market capitalization falls, at the time of
initial purchase, within a range of $1 billion to the 12-month average of the
maximum market capitalization for companies included in the Standard & Poor's
Mid Cap 400 Index (S&P 400). This average is updated monthly. In addition to
common stocks, the Fund may also invest in other securities with equity
features, such as convertible securities and preferred stocks. The balance of
the Fund's assets may be invested in small or large companies, government
securities or other short-term investments. The Fund's investment manager has in
the past and may in the future actively trade the portfolio in pursuit of the
Fund's goal. Due to this, the annual portfolio turnover rate may be higher than
other Berger Funds.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's investments may go down and you
could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in stocks of large companies. Mid-sized companies may pose greater risk due to
narrow product lines, limited financial resources, less depth in management or a
limited trading market for their stocks. The Fund's investments are often
focused in a small number of business sectors. In addition, the Fund may invest
in certain securities with unique risks, such as convertible securities and
foreign securities.
See "Investment Techniques, Securities and the Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
return since it began operations through December 31, 1998. This return includes
the reinvestment of all dividends and capital gains distributions and reflects
Fund expenses. As with all mutual funds, past performance does not guarantee
future results.
TOTAL RETURN FROM DECEMBER 31, 1997
THROUGH DECEMBER 31, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
10
<PAGE>
BERGER
MID CAP GROWTH
FUND
Average annual return is a measure of the Fund's performance over time. The
Fund's average annual return is compared with the S&P 400. While the Fund does
not seek to match the returns of the S&P 400, this index is a good indicator of
general stock market performance for mid-sized companies. You may not invest in
the S&P 400 and unlike the Fund, it does not incur fees or charges.
AVERAGE ANNUAL RETURN AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR (DECEMBER 31, 1997)
- ---------------------------------------------------------
<S> <C> <C>
The Fund XX%
- ---------------------------------------------------------
S&P 400 XX%
- ---------------------------------------------------------
</TABLE>
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .75
- ----------------------------------------------------
Distribution (12b-1) fee .25
- ----------------------------------------------------
Other expenses 1.46
- ----------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 2.46
- ----------------------------------------------------
FEE WAIVER(1) (.46)
- ----------------------------------------------------
NET EXPENSES 2.00
- ----------------------------------------------------
- ----------------------------------------------------
</TABLE>
1. Under a written agreement, the Fund's investment advisor waives its fee to
the extent that the Fund's annual operating expenses exceed 2.00%. The agreement
may be terminated by the advisor only upon 90 days' prior written notice to the
Fund.
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for them indirectly because they reduce the Fund's return. Fund
expenses include management fees, 12b-1 fees and administrative costs such as
shareholder recordkeeping and reports, custodian and pricing services and
registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 203
- ---------------------------------------------------
Three 627
- ---------------------------------------------------
Five 1,078
- ---------------------------------------------------
Ten 2,327
- ---------------------------------------------------
</TABLE>
11
<PAGE>
BERGER
MID CAP
VALUE FUND
[BERGER MID CAP VALUE FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BXXX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for capital appreciation. In pursuing
that goal, the Fund primarily invests in the common stocks of mid-sized
companies whose stock prices are believed to be undervalued.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - Investment selection focuses on
companies that have fallen out of favor with the market or are temporarily
misunderstood by the investment community. To a lesser degree, the Fund also
invests in companies that demonstrate special situations or turnarounds, meaning
companies that have experienced significant business problems but are believed
to have favorable prospects for recovery.
The Fund's investment manager generally looks for companies with:
- - A low price relative to their assets, earnings, cash flow or business
franchise
- - Products and services that give them a competitive advantage
- - Quality balance sheets and strong management.
The investment manager's philosophy is to weigh a security's downside risk
before considering its upside potential, which may help provide an element of
capital preservation. Under normal circumstances, the Fund invests at least 65%
of its assets in equity securities of mid-sized companies whose market
capitalization falls, at the time of initial purchase, within a range of $1
billion to the 12-month average of the maximum market capitalization for
companies included in the Standard & Poor's Mid Cap 400 Index (S&P 400). This
average is updated monthly. In addition to common stocks, the Fund may also
invest in other securities with equity features such as convertible securities,
preferred stocks, warrants and rights. The balance of the Fund's assets may be
invested in small or large companies, government securities or other short-term
investments.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with above-average risk and intend to make a long-term investment
commitment. Like all managed funds, there is a risk that the investment
manager's strategy for managing the Fund may not achieve the desired results. In
addition, the price of common stock moves up and down in response to corporate
earnings and developments, economic and market conditions and anticipated
events. As a result, the price of the Fund's
investments may go down and you could lose money on your investment.
The Fund's share price may fluctuate more than that of funds primarily invested
in large companies. Mid-sized companies may pose greater risk due to narrow
product lines, limited financial resources, less depth in management or a
limited trading market for their stocks. The Fund's investments are often
focused in a small number of business sectors. In addition, the Fund may invest
in certain securities with unique risks, such as special situations and foreign
securities.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1998. The table
includes reinvestment of all dividends and capital gains distributions and
reflects Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Average annual return is a measure of the Fund's performance over time. The
Fund's average annual return is compared with the S&P 400. While the Fund does
not seek to match the returns of the S&P 400, this index is a good indicator of
general stock market performance for mid-sized companies. You may not invest in
the S&P 400 and unlike the Fund, it does not incur fees or charges.
AVERAGE ANNUAL RETURN AS OF DECEMBER 31, 1998*
<TABLE>
<CAPTION>
LIFE OF THE FUND
(AUGUST 12, 1998)
- --------------------------------------------------
<S> <C>
The Fund XX%
- --------------------------------------------------
S&P 400 XX%
- --------------------------------------------------
</TABLE>
* Not annualized.
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .25
- ----------------------------------------------------
Distribution (12b-1) fee .75
- ----------------------------------------------------
Other expenses(1) .62
- ----------------------------------------------------
Total Annual Fund Operating Expenses(1) 1.62
- ----------------------------------------------------
- ----------------------------------------------------
</TABLE>
1. Based on estimates for the Fund's first full year of operations.
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for
12
<PAGE>
BERGER
MID CAP
VALUE FUND
them indirectly because they reduce the Fund's return. Fund expenses include
management fees,12b-1 fees and administrative costs such as shareholder
recordkeeping and reports, custodian and pricing services and registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 165
- ---------------------------------------------------
Three 511
- ---------------------------------------------------
</TABLE>
13
<PAGE>
BERGER
100 FUND
[BERGER 100 FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BEONX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for long-term capital appreciation. In
pursuing that goal, the Fund primarily invests in the common stocks of
established companies with the potential for strong earnings growth.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - Stock selection focuses on companies
believed to have good earnings growth potential regardless of the company's
size.
The Fund's investment manager generally looks for companies with:
- - Potential to increase earnings consistently and which reinvest their profits
rather than pay dividends
- - Reasonably priced securities which are well-positioned in growing,
under-penetrated or fragmented industries or sectors
- - Strong, capable management teams and conservatively financed balance sheets.
The Fund may sometimes take substantial positions in convertible securities,
preferred stocks, corporate bonds, government securities or other short-term
investments. The Fund may also invest in foreign securities. The Fund's
investment manager has in the past and may in the future actively trade the
portfolio in pursuit of the Fund's goal. Due to this, the annual portfolio
turnover rate may be higher than other Berger Funds.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with the risks of equity investing and intend to make a long-term
investment commitment. Like all managed funds, there is a risk that the
investment manager's strategy for managing the Fund may not achieve the desired
results. In addition, the price of common stock moves up and down in response to
corporate earnings and developments, economic and market conditions and
anticipated events. As a result, the price of the Fund's investments may go down
and you could lose money on your investment.
In addition, the Fund may invest in certain securities with unique risks, such
as small companies and foreign securities. Also, the Fund's investments may
focus in a small number of business sectors.
See "Investment Techniques, Securities and the Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance for the ten-year period through December 31, 1998. These returns
include reinvestment of all dividends and capital gain distributions and reflect
Fund expenses. As with all mutual funds, past performance does not guarantee
future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
89 48.30%
90 -5.59%
91 88.81%
92 8.53%
93 21.20%
94 -6.66%
95 21.34%
96 13.73%
97 13.57%
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR 5 YEARS 10 YEARS (SEPTEMBER 30, 1974)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Fund XX% XX% XX% XX
- -------------------------------------------------------------------------------
S&P 500 XX% XX% XX% XX
- -------------------------------------------------------------------------------
</TABLE>
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .75
- ----------------------------------------------------
Distribution (12b-1) fee .25
- ----------------------------------------------------
Other expenses .38
- ----------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.38
- ----------------------------------------------------
</TABLE>
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for them indirectly because they reduce the Fund's return. Fund
expenses include management fees,12b-1 fees and
14
<PAGE>
BERGER
100 FUND
administrative costs such as shareholder recordkeeping and reports, custodian
and pricing services and registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- -----------------------------------------------
<S> <C>
One 140
- -----------------------------------------------
Three 437
- -----------------------------------------------
Five 755
- -----------------------------------------------
Ten 1,657
- -----------------------------------------------
</TABLE>
15
<PAGE>
BERGER/BIAM
INTERNATIONAL
FUND
[BERGER/BIAM INTERNATIONAL FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BBINX
</TABLE>
[ICON] THE FUND'S GOAL - The Fund aims for long-term capital appreciation. In
pursuing that goal, the Fund primarily invests in a portfolio consisting of
common stocks of well-established foreign companies.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - The portfolio's investment manager
first identifies economic and business themes that it believes provide a
favorable framework for selecting stocks. Using fundamental analysis, the
investment manager then selects individual companies best positioned to take
advantage of opportunities presented by these themes.
The portfolio's investment manager generally looks for companies with:
- - Securities that are fundamentally undervalued relative to their long-term
prospective earnings growth rates, their historic valuation levels and their
competitors
- - Business operations predominantly in well-regulated and more stable foreign
markets
- - Substantial size and liquidity, strong balance sheets, proven management and
diversified earnings.
The Fund invests all of its assets in the Berger/BIAM International Portfolio
(Portfolio), which has the same goals and policies as the Fund. The Portfolio
invests primarily in common stocks with 65% of its total assets in securities of
companies located in at least five different countries outside the United
States. Recently, the Portfolio has been weighted toward countries in Western
Europe, Australia and the Far East. However, it may also invest in other foreign
countries, including developing countries. A majority of the Portfolio's assets
are invested in mid-sized to large capitalization companies. The Portfolio may
also take positions in convertible securities, preferred stocks, corporate bonds
and short- and long-term foreign or U.S. government securities.
See "Organization of the Berger Funds Family -- Special Fund Structures --
Master/Feeder" later in this prospectus for more information on the Fund's
investment in the Portfolio.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with the risks of international investing and intend to make a
long-term investment commitment. Like all managed funds, there is a risk that
the investment manager's strategy for managing the Fund may not achieve the
desired results. In addition, the price of common stock moves up and down in
response to corporate earnings and developments, economic and market conditions
and anticipated events. As a result, the price of the Fund's investments may go
down and you could lose money on your investment. There are additional risks
with investing in foreign countries, especially in developing countries --
specifically, economic, currency, information, political and transaction risks.
As a result of these additional risks, the Fund may be more volatile than a
domestic stock fund. In addition, foreign stocks may not move in concert with
the U.S. markets. The Fund's investments are often focused in a small number of
business sectors. In addition, the Fund may invest in certain securities with
unique risks, such as forward
foreign currency contracts.
See "Investment Techniques, Securities and the Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations(1) through December 31, 1998. These
returns include reinvestment of all dividends and capital gains and reflect Fund
expenses. As with all mutual funds, past performance does not guarantee future
results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year since the Fund
began.(1)
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
90 -4.11%
91 13.18%
92 10.21%
93 36.38%
94 -7.80%
95 18.78%
96 18.51%
97 2.90%
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Morgan Stanley Capital
International Europe, Australasia and the Far East Index (EAFE Index). While the
Fund does not seek to match the returns of the EAFE Index, this index is a good
16
<PAGE>
BERGER/BIAM
INTERNATIONAL
FUND
indicator of foreign stock markets. You may not invest in the EAFE Index and
unlike the Fund, it does not incur fees or charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998(1)
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR 5 YEARS (JULY 31, 1989)
- -------------------------------------------------------------------
<S> <C> <C> <C>
The Fund XX% XX% XX%
- -------------------------------------------------------------------
EAFE Index XX% XX% XX%
- -------------------------------------------------------------------
</TABLE>
1. Performance figures covering periods prior to October 11, 1996, include the
performance of a pool of assets advised by the Portfolio's investment manager
for periods before the Portfolio began operations. This performance has been
adjusted to reflect the increased expenses expected in operating the Fund, net
of fee waivers. The asset pool was not registered with the SEC and was not
subject to the investment restrictions imposed on mutual funds. If the pool had
been registered, its performance might have been adversely affected.
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES(1)
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .90
- ----------------------------------------------------
Distribution (12b-1) fee .25
- ----------------------------------------------------
Other expenses .68
- ----------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.83
- ----------------------------------------------------
FEE WAIVER(2) (.03)
- ----------------------------------------------------
NET EXPENSES 1.80
- ----------------------------------------------------
</TABLE>
1. Annual fund operating expenses consist of the Fund's expenses plus the
Fund's share of the expenses of the Portfolio.
2. Under a written agreement, the Portfolio's investment advisor waives its fee
to the extent that the Portfolio's annual operating expenses exceed 1.00%. The
agreement may not be terminated except by a vote of the Portfolio's Board of
Trustees.
UNDERSTANDING EXPENSES - Annual Fund operating expenses are borne by the Fund.
As a result, you bear them indirectly because they reduce the Fund's return.
Fund expenses include the Fund's share of the Portfolio's expenses,12b-1 fees,
an administrative fee and registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 183
- ---------------------------------------------------
Three 566
- ---------------------------------------------------
Five 975
- ---------------------------------------------------
Ten 2,116
- ---------------------------------------------------
</TABLE>
17
<PAGE>
BERGER
GROWTH AND
INCOME FUND
[BERGER GROWTH AND INCOME FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol BEOOX
</TABLE>
[ICON] THE FUND'S GOALS - The Fund aims for capital appreciation and has a
secondary goal of providing a moderate level of current income. In pursuing
these goals, the Fund primarily invests in the securities of well-established,
growing companies. The Fund's secondary goal may be changed at any time without
a shareholder vote.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - Security selection focuses on the
common stocks, convertible securities and preferred stocks of companies that
have demonstrated a pattern of earnings growth and stability and are also
expected to provide current income.
The Fund's investment manager generally looks for companies with:
- - Competitive products and services and a successful orientation to global
markets
- - Higher than average rate of earnings growth with somewhat lower dividend
yields
- - Strong, capable management teams and conservatively financed balance sheets.
Common stock of companies with mid-sized to large market capitalizations usually
constitutes a majority of the Fund's investments. The Fund may also invest in
corporate bonds, government securities or other short-term investments, and it
may invest in smaller companies or foreign securities when valuations are
attractive.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with the risks of equity and fixed-income investing and intend to
make a long-term investment commitment. Like all managed funds, there is a risk
that the investment manager's strategy for managing the Fund may not achieve the
desired results. In addition, the price of common stock moves up and down in
response to corporate earnings and developments, interest rate movements,
economic and market conditions and anticipated events. As a result, the price of
the Fund's investments may go down and you could lose money on your investment.
To the extent the Fund invests in fixed-income securities it takes on additional
risks, including movements in interest rates and default on payment of principal
or interest. The Fund may invest up to 20% of its assets in convertible
securities rated below investment grade (BB or lower by S&P, Ba or lower by
Moody's). The issuers of lower rated bonds are less financially secure, and are
more likely to be hurt by interest rate movements. When interest rates are low,
the Fund's income distributions to you may be reduced or eliminated. In
addition, the Fund may invest in certain securities with unique risks, such as
foreign and small company securities.
See "Investment Techniques, Securities and Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
annual return for the ten-year period through December 31, 1998. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Year-by-year returns show you how the Fund's performance has varied by
illustrating the differences for each full calendar year for the past ten years.
YEAR-BY-YEAR TOTAL RETURN AS OF DECEMBER 31
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
89 20.32%
90 -7.99%
91 60.97%
92 4.82%
93 23.57%
94 -9.07%
95 23.92%
96 15.61%
97 22.70%
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
18
<PAGE>
BERGER
GROWTH AND
INCOME FUND
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
LIFE OF THE FUND
1 YEAR 5 YEARS 10 YEARS (SEPTEMBER 30, 1974)
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Fund XX% XX% XX%
- ------------------------------------------------------------------------
S&P 500 XX% XX% XX%
- ------------------------------------------------------------------------
</TABLE>
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .75
- ----------------------------------------------------
Distribution (12b-1) fee .25
- ----------------------------------------------------
Other expenses .44
- ----------------------------------------------------
Total Annual Fund Operating Expenses 1.44
- ----------------------------------------------------
</TABLE>
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for them indirectly because they reduce the Fund's return. Fund
expenses include management fees, 12b-1 fees and administrative costs such as
shareholder recordkeeping and reports, custodian and pricing services and
registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- - $10,000 initial investment
- - 5% total return for each year
- - Fund operating expenses remain the same for each period
- - Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
- ---------------------------------------------------
<S> <C>
One 147
- ---------------------------------------------------
Three 456
- ---------------------------------------------------
Five 787
- ---------------------------------------------------
Ten 1,724
- ---------------------------------------------------
</TABLE>
19
<PAGE>
BERGER
BALANCED
FUND
[BERGER BALANCED FUND PHOTO]
<TABLE>
<S> <C>
- - Ticker Symbol: BEBAX
</TABLE>
[ICON] THE FUND'S GOALS - The Fund aims for capital appreciation and current
income. In pursuing these goals, the Fund primarily invests in a diversified
group of domestic equity and fixed-income securities.
[ICON] PRINCIPAL INVESTMENT STRATEGIES - The allocation between equity and
fixed-income securities is based upon the investment manager's assessment of
available investment opportunities and relevant market, economic and financial
factors.
The Fund's investment manager generally looks for companies with:
- -Reasonably priced equity securities with strong, consistent and predictable
earnings growth rates
- -Strong, capable management teams and competitive products or services
- -Conservatively financed balance sheets.
The Fund's equity investments consist primarily of common stocks of companies
with mid-sized to large market capitalizations. The Fund's fixed-income
investments are a variety of income-producing securities, such as short- to
long-term corporate and government debt securities, convertible securities,
preferred stocks and mortgage-backed securities. The investment manager believes
its investment style emphasizing equity securities offers shareholders the
opportunity for capital appreciation along with a reasonable level of capital
preservation. Normally, equity securities are expected to range from 50% to 75%
of the Fund's total assets. However, it is the Fund's policy to invest at least
25% of its total assets in fixed-income senior securities and at least 25% in
equity securities. The Fund may invest up to 20% of its assets in convertible
securities rated below investment grade. The Fund will not purchase any
nonconvertible securities rated below investment grade (BB or lower by S&P, Ba
or lower by Moody's). The Fund's investment manager has in the past and may in
the future actively trade the portfolio in pursuit of the Fund's goal. Due to
this, the annual portfolio turnover rate may be higher than the other Berger
Funds.
[ICON] PRINCIPAL RISKS - You may be interested in the Fund if you are
comfortable with the risks of equity and fixed-income investing and intend to
make a long-term investment commitment. Like all managed funds, there is a risk
that the investment manager's strategy for managing the Fund may not achieve the
desired results. In addition, the price of common stock moves up and down in
response to corporate earnings and developments, interest rate movements,
economic and market conditions and anticipated events. As a result, the price of
the Fund's investments may go down and you could lose money on your investment.
The Fund may be riskier than other balanced funds that invest more heavily in
fixed-income securities.
To the extent the Fund invests in fixed-income securities it takes on additional
risks, including movements in interest rates and default on payment of principal
or interest. The Fund may invest up to 20% of its assets in convertible
securities rated below investment grade. The issuers of lower rated bonds are
less financially secure, and are more likely to be hurt by interest rate
movements. When interest rates are low, the Fund's income distributions to you
may be reduced or eliminated. In addition, the Fund may invest in certain
securities with unique risks, such as foreign and small company securities.
See "Investment Techniques, Securities and the Associated Risks" later in this
prospectus for more information on risks.
[ICON] THE FUND'S PAST PERFORMANCE - The information below shows the Fund's
performance since it began operations through December 31, 1998. These returns
include reinvestment of all dividends and capital gains distributions and
reflect Fund expenses. As with all mutual funds, past performance does not
guarantee future results.
Total return shows you the Fund's performance for the one full calendar year
since it began.
TOTAL RETURN FROM DECEMBER 31, 1997
THROUGH DECEMBER 31, 1998(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
98
</TABLE>
<TABLE>
<S> <C> <C>
BEST QUARTER:
WORST QUARTER:
</TABLE>
20
<PAGE>
BERGER
BALANCED
FUND
Average annual total return is a measure of the Fund's performance over time.
The Fund's average annual return is compared with the Standard & Poor's 500
Index (S&P 500). While the Fund does not seek to match the returns of the S&P
500, this index is a good indicator of general stock market performance. You may
not invest in the S&P 500 and unlike the Fund, it does not incur fees or
charges.
AVERAGE ANNUAL RETURNS AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
1 LIFE OF THE FUND
YEAR (SEPTEMBER 30, 1997)
- --------------------------------------------------
<S> <C> <C>
The Fund XX%(1) XX%(1)
- --------------------------------------------------
S&P 500 XX% XX%
- --------------------------------------------------
</TABLE>
1. Returns primarily generated during a period of higher than normal trading
activity undertaken in response to market conditions during the Fund's initial
period of operations before it became fully invested.
[ICON] FUND EXPENSES - As a shareholder in the Fund, you do not pay any sales
charges, redemption or exchange fees.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(deducted directly from the Fund) %
- ----------------------------------------------------
<S> <C>
Management fee .70
- ----------------------------------------------------
Distribution (12b-1) fee .25
- ----------------------------------------------------
Other expenses .62
- ----------------------------------------------------
TOTAL ANNUAL FUND OPERATING EXPENSES 1.57
- ----------------------------------------------------
FEE WAIVER(1) (.07)
- ----------------------------------------------------
NET EXPENSES 1.50
- ----------------------------------------------------
</TABLE>
1. Under a written agreement, the Fund's investment advisor waives its fee to
the extent that the Fund's annual operating expenses exceed 1.50%. The agreement
will remain in effect until April 30, 1999. After that date, it may be
terminated by the advisor only upon 90 days' prior written notice to the Fund.
UNDERSTANDING EXPENSES Annual Fund operating expenses are paid by the Fund. As a
result, you pay for them indirectly because they reduce the Fund's return. Fund
expenses include management fees,12b-1 fees and administrative costs such as
shareholder recordkeeping and reports, custodian and pricing services and
registration fees.
The following example helps you compare the cost of investing in the Fund to the
cost of investing in other mutual funds by showing what your costs may be over
time. It uses the same assumptions that other funds use in their prospectuses:
- -$10,000 initial investment
- -5% total return for each year
- -Fund operating expenses remain the same for each period
- -Redemption after the end of each period
Your actual costs may be higher or lower, so this example should be used for
comparison only. Based on these assumptions your costs at the end of each period
would be:
EXAMPLE COSTS
<TABLE>
<CAPTION>
YEARS $
<S> <C>
- --------------------------------------------------------
One 153
- --------------------------------------------------------
Three 474
- --------------------------------------------------------
Five 818
- --------------------------------------------------------
Ten 1,791
- --------------------------------------------------------
</TABLE>
21
<PAGE>
INVESTMENT TECHNIQUES,
SECURITIES AND
ASSOCIATED RISKS
<TABLE>
<CAPTION>
BERGER BERGER BERGER
SMALL SMALL BERGER BERGER GROWTH
BERGER NEW BERGER COMPANY CAP MID CAP MID CAP BERGER/BIAM AND BERGER
RISK AND INVESTMENT GENERATION SELECT GROWTH VALUE GROWTH VALUE BERGER INTERNATIONAL INCOME BALANCED
TABLE FUND FUND FUND FUND FUND FUND 100 FUND FUND FUND FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DIVERSIFICATION DIAMOND N DIAMOND DIAMOND DIAMOND DIAMOND DIAMOND DIAMOND DIAMOND DIAMOND
SMALLER AND /Y/ Y /Y/ /Y/ /Y/ /Y/ Y Y Y Y
MID-SIZED COMPANY
SECURITIES
Market, liquidity
and information risk
FOREIGN SECURITIES Y Y Y Y Y Y Y /Y/ Y Y
Market, currency,
transaction,
liquidity,
information and
political risk
SECTOR FOCUS /Y/ /Y/ /Y/ /Y/ /Y/ /Y/ Y /Y/ Y Y
Market and liquidity
risk
CONVERTIBLE Y Y Y Y Y Y Y Y /Y/ /Y/
SECURITIES(1)
Market, interest
rate and credit risk
INVESTMENT GRADE Y Y Y Y Y Y Y Y Y /Y/
BONDS
(NONCONVERTIBLE)
Interest rate,
market and credit
risk
COMPANIES WITH Y Y Y 5ADIAMOND Y Y 5ADIAMOND Y 5ADIAMOND Y
LIMITED OPERATING
HISTORIES
Market, liquidity
and information risk
ILLIQUID AND 15 15 15 10DIAMOND 15 15 15 15 15 15
RESTRICTED
SECURITIES(2)
Market, liquidity
and transaction risk
SPECIAL SITUATIONS Y Y Y /Y/ Y /Y/ Y Y Y Y
Market and
information risk
MORTGAGE-BACKED AND N N N N N N N N N /Y/
ASSET-BACKED
SECURITIES
Interest rate,
credit, prepayment,
extension and market
risk
TEMPORARY DEFENSIVE Y Y Y Y Y Y Y N Y Y
MEASURES
Opportunity risk
BORROWING 25ADIAMOND 25ADIAMOND 25ADIAMOND 5ADIAMOND 25ADIAMOND 25ADIAMOND 5ADIAMOND 25ADIAMOND 5ADIAMOND 25ADIAMOND
Leverage risk
HEDGING STRATEGIES
FINANCIAL FUTURES(3) 5 5 5 NDIAMOND 5 5 5 N 5 5
Hedging,
correlation,
opportunity and
leverage risk
FORWARD FOREIGN Y Y Y NDIAMOND Y Y Y /Y/ Y Y
CURRENCY
CONTRACTS(3)
Hedging, credit,
correlation,
opportunity and
leverage risk
OPTIONS(3) 5 5 5 5 5 5 5 N 5 5
(EXCHANGE-TRADED AND
OVER-THE-COUNTER)
Hedging, credit,
correlation and
leverage risk
WRITING (SELLING) 25A 25A 25A 10 25A 25A 25A N 25A 25A
COVERED CALL
OPTIONS(3)
(EXCHANGE-TRADED AND
OVER-THE-COUNTER)
Opportunity, credit
and leverage risk
</TABLE>
22
<PAGE>
BEFORE
YOU
INVEST...
in any of the Berger Funds, make sure you understand the risks involved. All
investments involve risk. Generally, the greater the risk, the greater the
potential for return. The reverse is also generally true, the lower the risk,
the lower the potential for return.
AN INVESTMENT IN THE BERGER FUNDS IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. THE FUNDS ARE NOT A
COMPLETE INVESTMENT PROGRAM, BUT MAY TO SERVE TO DIVERSIFY OTHER TYPES OF
INVESTMENTS IN YOUR PORTFOLIO. THERE IS NO GUARANTEE THAT THE FUNDS WILL MEET
THEIR INVESTMENT GOALS, AND ALTHOUGH YOU HAVE THE POTENTIAL TO MAKE MONEY, YOU
COULD ALSO LOSE MONEY BY INVESTING IN THE FUNDS.
The table on the opposite page will help you further understand the risks the
Funds take by investing in certain securities and the investment techniques used
by the Berger Funds. A glossary follows the table. You may get more detailed
information about the risks of investing in the Berger Funds in the Statement of
Additional Information (SAI), including a discussion of debt security ratings in
Appendix A to the SAI.
<TABLE>
<S> <C> <C> <C> <C> <C>
/Y/ Y N DIAMOND 5A
KEY TO TABLE Yes, the security Yes, the security No, the security The restriction Use of a security
Follow down the or technique is or technique is or technique is is fundamental to or technique is
columns under the permitted by a permitted by a not permitted by a Fund. permitted, but
name of the Fund Fund and is Fund. a Fund. (Fundamental subject to a
in which you are emphasized by a restrictions restriction of up
interested. The Fund. cannot be changed to 5% of total
boxes will tell without a assets.
you: shareholder
vote.)
10A 25A 5 10 15
Use of a security Use of a security Use of a security Use of a security Use of a security
or technique is or technique is or technique is or technique is or technique is
permitted, but permitted, but permitted, but permitted, but permitted, but
subject to a subject to a subject to a subject to a subject to a
restriction of up restriction of up restriction of up restriction of up restriction of up
to 10% of total to 25% of total to 5% of net to 10% of net to 15% of net
assets. assets. assets. assets. assets.
</TABLE>
NOTES TO TABLE
1. The Funds have no minimum quality standards for convertible securities,
although they will not invest in defaulted securities. They also will not invest
20% or more of their assets in convertible securities rated below investment
grade or in unrated convertible securities that the advisor considers to be
below investment grade.
2. The Berger Small Cap Value Fund may invest in illiquid securities, but not
restricted securities.
3. The Funds may use futures, forwards and options only for hedging. Not more
than 5% of a Fund's net assets may be used for initial margins for futures and
premiums for options, although a Fund may have more at risk under these
contracts than the initial margin or premium. However, a Fund's aggregate
obligations under these contracts may not exceed the total market value of the
assets being hedged, such as some or all of the value of the Fund's equity
securities.
23
<PAGE>
RISK AND INVESTMENT GLOSSARY
BELOW INVESTMENT GRADE BONDS
have ratings of BB (Standard & Poor's) or Ba (Moody's) or below. Bonds rated
below investment grade are subject to greater credit risk than investment grade
bonds. Also called "high-yield bonds" or "junk bonds."
BORROWING
refers to a loan of money from a bank or other financial institution undertaken
by a Fund for temporary or emergency reasons only.
COMMON STOCK
is a share of ownership (equity) interest in a company.
COMPANIES WITH LIMITED OPERATING HISTORIES
are securities issued by companies that have been in continuous operation for
less than three years. Sometimes called "unseasoned" issuers.
CONVERTIBLE SECURITIES
are debt or equity securities which may be converted on specified terms into
stock of the issuer.
CORRELATION RISK
occurs when a Fund "hedges" ~ uses one investment to offset the Fund's position
in another. If the two investments do not behave in relation to one another the
way Fund managers expect them to, then unexpected results may occur.
CREDIT RISK
means that the issuer of a security or the counterparty to an investment contact
may default or become unable to pay its obligations when due.
CURRENCY RISK
happens when a Fund buys or sells a security denominated in foreign currency.
Foreign currencies "float" in value against the U.S. dollar. Adverse changes in
foreign currency value can cause investment losses when a Fund's investments are
converted to U.S. dollars.
EXTENSION RISK
is the risk that, as interest rates rise, borrowers are less likely to refinance
their mortgages or other debts. As a result, the principal on mortgage-backed or
asset-backed securities may be paid later than expected, which could cause the
value of the securities to go down.
DIVERSIFICATION
means a diversified fund may not, with respect to at least 75% of its assets,
invest more than 5% in the securities of one company. A nondiversified fund may
be more volatile than a diversified fund because it invests more of its assets
in a smaller number of companies and the gains or losses on a single stock will
therefore have a greater impact on the fund's share price. All of the Berger
Funds are diversified funds, except the Berger Select Fund.
FINANCIAL FUTURES
are exchange-traded contracts on securities, securities indexes or foreign
currencies that obligate the holder to take or make future delivery of a
specified quantity of those underlying securities or currencies on a
predetermined future date.
FOREIGN SECURITIES
are issued by companies located outside of the United States. A Fund considers a
company to be located outside the United States if the principal securities
trading market for its equity securities is located outside the U.S. or it is
organized under the laws of, and has a principal office in, a country other than
the U.S.
FORWARD FOREIGN CURRENCY CONTRACTS
are privately negotiated contracts committing the holder to purchase or sell a
specified quantity of a foreign currency on a predetermined future date.
HEDGING RISK
comes into play when a Fund uses a security whose value is based on an
underlying security or index to "offset" the Fund's position in another security
or currency. The objective of hedging is to offset potential losses in one
security with gains in the hedge. But a hedge can eliminate or reduce gains as
well as offset losses. (Also see "Correlation risk.")
ILLIQUID AND RESTRICTED SECURITIES
are securities which, by rules of their issue or by their nature, cannot be sold
readily. These include illiquid Rule 144A securities.
INFORMATION RISK
means that information about a security or issuer might not be available,
complete, accurate or comparable.
INTEREST RATE RISK
is the risk that changes in interest rates will adversely affect the value of an
investor's securities. When interest rates rise, the value of fixed-income
securities will generally fall. Conversely, a drop in interest rates will
generally cause an increase in the value of fixed-income securities. Longer-term
securities are subject to greater interest rate risk.
24
<PAGE>
INVESTMENT GRADE BONDS
are rated BBB (Standard & Poor's) or Baa (Moody's) or above.
LEVERAGE RISK
occurs in some securities or techniques that tend to magnify the effect of small
changes in an index or a market. This can result in a loss that exceeds the
amount that was invested in the contract.
LIQUIDITY RISK
occurs when investments cannot be sold readily. A Fund may have to accept a
less-than-desirable price to complete the sale of an illiquid security or may
not be able to sell it at all.
MARKET CAPITALIZATION
is the total current market value of a company's outstanding common stock.
MARKET RISK
exists in all mutual funds and means the risk that the prices of securities in a
market, a sector, or an industry will fluctuate, and that such movements might
reduce an investment's value.
MORTGAGE-BACKED SECURITIES
are securities that represent interests in "pools" of mortgages or that are
backed by mortgages where the interest and principal payments on the mortgages
are "passed-through" to the security holder. Mortgage-backed securities may be
issued or guaranteed by the U.S. government. They may also be privately issued
and backed by U.S. government guaranteed securities or by private arrangements
to make them more secure. Asset-backed securities are similar, except backed by
assets such as car loans or credit card receivables rather than mortgages.
Mortgage-backed and asset-backed securities may be fixed-rate or variable rate
securities.
OPPORTUNITY RISK
means missing out on an investment opportunity because the assets necessary to
take advantage of it are committed to less advantageous investments or
strategies.
OPTIONS
are contracts giving the holder the right but not the obligation to purchase or
sell a security on or before a predetermined future date for a fixed price.
Options on securities indexes are similar, but settle in cash.
POLITICAL RISK
comes into play with investments, particularly foreign investments, which may be
adversely affected by nationalization, taxation, war, government instability or
other economic or political actions or factors.
PREPAYMENT RISK
is the risk that, as interest rates fall, borrowers are more likely to refinance
their mortgages or other debts. As a result, the principal on mortgage-backed or
asset-backed securities may be paid earlier than expected, which could cause the
yield on the securities to go down and cause prepaid amounts to have to be
reinvested at a relatively lower interest rate.
SECTOR FOCUS
occurs when a significant portion of a Fund's assets are invested in a
relatively small number of related industries. The Funds will not concentrate
more than 25% of their total assets in any one industry. Sector focus may
increase both market and liquidity risk.
SMALL AND MID-SIZED COMPANY SECURITIES
are securities issued by small or mid-sized companies, as measured by their
market capitalization. The market capitalization range targeted by each of the
Funds investing primarily in small or mid-sized companies varies by Fund and
appears in the description for those Funds under the heading "Principal
Investment Strategies." In general, the smaller the company, the greater its
risks.
SPECIAL SITUATIONS
are companies about to undergo a structural, financial or management change
which may significantly affect the value of their securities.
TEMPORARY DEFENSIVE MEASURES
may be taken when a Fund's investment manager believes they are warranted due to
market conditions. When this happens, the Fund may increase its investment in
government securities and other short-term securities without regard to the
Fund's investment restrictions, policies or normal investment emphasis.
TRANSACTION RISK
means that a Fund may be delayed or unable to settle a transaction or that
commissions and settlement expenses may be higher than usual.
WRITING (SELLING) COVERED CALL OPTIONS
is the selling of a contract to another party which gives them the right but not
the obligation to buy a particular security from you. A Fund will write call
options only if it already owns the security (if it is "covered").
25
<PAGE>
<TABLE>
<S> <C>
BUYING SHARES
- - Minimums:
- - Initial investment $ 2,000
- - Subsequent investments $ 50
- - Automatic investment plan $ 50
</TABLE>
SEND NEW ACCOUNT
APPLICATIONS TO
The Berger Funds
P.O. Box 419958
Kansas City, MO 64141-6958
OR FOR OVERNIGHT, CERTIFIED
OR REGISTERED MAIL ONLY
The Berger Funds
330 West 9th St., 1st Floor
Kansas City, MO 64105
<TABLE>
<CAPTION>
BY AUTOMATIC INVESTMENT
BY MAIL BY TELEPHONE BY ONLINE ACCESS PLAN
<S> <C> <C> <C>
[ENVELOPE ICON] [TELEPHONE ICON] [COMPUTER ICON] [CALENDAR ICON]
Read this prospectus. If you already have a If you have established a To automatically purchase
Fill out the application Berger Funds account, you Berger Funds account with more shares on a regular
if you are opening a new may purchase additional electronic funds transfer basis, fill out the Auto-
account. shares by telephone privileges you may pur- matic Investment Plan
Make out a check to order. chase additional shares section of the
BERGER FUNDS for the You must pay for them via online access. application.
amount you want to within three business You will find us online Investments are trans-
invest. days by wire, electronic at www.bergerfunds.com. ferred automatically from
Send the application and funds transfer or your bank account.
a check to The Berger overnight delivery of a See details on the
Funds in the envelope check. application.
provided. Call (800) 551-5849 for
To add to an existing ac- current wire or
count, be sure to include electronic funds transfer
your account number on instructions.
your check and mail it to
the appropriate address
above.
All shareholders are automatically granted telephone
and online transaction privileges unless they decline
them explicitly in writing, either on the account
application or by writing to The Berger Funds at the
address above.
You may give up some level of security by choosing to
buy and sell shares by telephone or online rather
than by mail.
</TABLE>
IMPORTANT NOTES
ABOUT PAYING FOR
YOUR SHARES
Your check must be made payable to BERGER FUNDS, or it will not be accepted.
You may NOT purchase shares by cash, credit card, third-party checks or checks
drawn on foreign banks.
Telephone and online purchase orders may not exceed four times the value of an
account on the date the order is placed. Shares previously bought by telephone
or online access are included in calculating account size only if payment has
been received for those shares.
Orders not paid for on time will be canceled and shares will be redeemed from
your account to compensate for any decline in price of the shares canceled.
The Funds reserve the right to reject any order and to waive minimums or
increase minimums following notice.
26
<PAGE>
SELLING
(REDEEMING)
SHARES
<TABLE>
<CAPTION>
BY SYSTEMATIC
BY MAIL BY TELEPHONE BY ONLINE ACCESS WITHDRAWAL PLAN
<S> <C> <C> <C>
[ENVELOPE ICON] [TELEPHONE ICON] [COMPUTER ICON] [CALENDAR ICON]
Send a written Call (800) 551-5849. You will find us Shares may be
request indicating online at redeemed
your account number www.bergerfunds.com. automatically ($50
and the dollar amount minimum) monthly,
or number of shares quarterly,
you are redeeming to semi-annually or
the appropriate ad- annually.
dress shown under A systematic
"Buying Shares." withdrawal plan may
Your request must be be established if you
signed by each own shares in a Fund
registered worth at least
shareholder, with the $5,000.
signature(s) Call (800) 551-5849
appearing exactly as for more information
they do on your and forms.
account registration.
FOR LIMITATIONS ON TELEPHONE AND ONLINE
REDEMPTIONS SEE "SIGNATURE GUARANTEES /
SPECIAL DOCUMENTATION" BELOW.
TELEPHONE AND ONLINE REDEMPTIONS ARE NOT
AVAILABLE FOR SHARES HELD IN RETIREMENT
ACCOUNTS SPONSORED BY THE FUNDS.
</TABLE>
IMPORTANT NOTES
ABOUT PAYMENT
FOR YOUR
REDEEMED SHARES
IN TIMES OF EXTREME ECONOMIC OR MARKET CONDITIONS, TRANSACTIONS BY TELEPHONE OR
ONLINE MAY BE DIFFICULT.
Generally, payment for your redeemed shares will be sent to you within three
business days after receipt of your redemption request in good order.
You may receive payment for redeemed shares via wire or electronic funds
transfer. You may elect these services on the account application or send to the
Berger Funds a written request providing your bank information with your
signature guaranteed. (See "Signature Guarantees / Special Documentation"
below.)
Wire and electronic funds transfers are subject to a $1,000 minimum and $100,000
maximum.
You will be charged $10 if you request a wire transfer. There is no charge for
an electronic funds transfer.
A wire transfer will be sent the next business day after receipt of your order,
and an electronic funds transfer will be sent the second business day after
receipt of your order.
Proceeds from the redemption of shares purchased by check may be delayed until
full payment for the shares has been received and cleared, which may take up to
15 days from the purchase date.
27
<PAGE>
INFORMATION ABOUT
YOUR ACCOUNT
EXCHANGING
SHARES
Shares of the Funds described in this prospectus may be exchanged for shares of
any other Berger Fund or for shares in the Berger Cash Account Trust Portfolios
(the Berger CAT Portfolios). The Berger CAT Portfolios are three separately
managed, unaffiliated money market funds: the Money Market Portfolio, the
Government Securities Portfolio and the Tax-Exempt Portfolio.
The exchange privilege with the Berger CAT Portfolios does not constitute an
offering or recommendation of the shares of these portfolios by the Berger Funds
or Berger Associates. Berger Associates is compensated for administrative
services it performs with respect to the Berger CAT Portfolios.
When exchanging shares:
- - Each account must be registered identically ~ have the same signatures and
addresses.
- - Each Fund or Berger CAT Portfolio must be legally eligible for sale in your
state of residence.
- - You may exchange out of the Berger Funds up to four times per calendar year.
At this time, there is no limit on the number of exchanges permitted out of the
Berger CAT Portfolios.
- - You may exchange by telephone, online access or mail.
- - You are responsible for obtaining and reading the prospectus for the Fund or
Berger CAT Portfolio into which you are exchanging.
- - Exchanges result in the sale of one Fund's shares and the purchase of another,
normally resulting in a taxable event for you.
- - It may take one business day or more for your money from a redemption of Fund
shares to be invested in a Berger CAT Portfolio.
- - Exchanges into any new Fund or Berger CAT Portfolio are subject to that Fund's
or Portfolio's initial and subsequent investment minimums.
- --------------------------------------------------------------------------------
SIGNATURE
GUARANTEES/
SPECIAL
DOCUMENTATION
The Funds use Signature Guarantees to protect you and the Funds from possible
fraudulent requests for redeemed shares. Your redemption request must be in
writing and accompanied by a Signature Guarantee if:
- - Your request exceeds $100,000.
- - You request that payment be made to a name other than the one on your account
registration.
- - You request that payment be mailed to an address which has been changed within
30 days of your redemption request or to an address other than the one of
record.
- - You change or add information relating to your designated bank.
The Berger Funds reserve the right to require Signature Guarantees under other
certain circumstances.
You can get a Signature Guarantee from most broker-dealers, national or state
banks, credit unions, federal savings and loan associations or other eligible
institutions. YOU CANNOT OBTAIN A SIGNATURE GUARANTEE FROM A NOTARY PUBLIC.
Make sure the Signature Guarantee appears:
- - Together with the signature(s) of all registered owner(s) of the redeemed
shares on the written redemption request.
- - On any share certificates you hold for the redeemed shares or on a separate
statement of assignment (stock power) which may be obtained from a bank or
broker.
Additional documents are required for redemptions by corporations, executors,
administrators, trustees and guardians. For instructions, call (800) 551-5849 or
write to The Berger Funds, P.O. Box 419958, Kansas City, MO 64141-6958.
- --------------------------------------------------------------------------------
YOUR
SHARE
PRICE
The price at which you buy, sell or exchange Fund shares is the share price or
net asset value (NAV). The share price for each Fund is determined by adding the
value of that Fund's investments, cash and other assets, deducting liabilities,
and then dividing that value by the total number of that Fund's shares
outstanding.
Each Fund's share price is calculated at the close of the regular trading
session of the New York Stock Exchange (normally 4:00 p.m. New York time) each
day that the Exchange is open. Share price is not calculated on the days that
the Exchange is closed.
FOR A PURCHASE, REDEMPTION OR EXCHANGE OF FUND SHARES, YOUR PRICE IS THE SHARE
PRICE NEXT CALCULATED AFTER YOUR REQUEST IS RECEIVED IN GOOD ORDER AND ACCEPTED
BY THE
28
<PAGE>
FUND, ITS AUTHORIZED AGENT OR DESIGNEE. TO RECEIVE A SPECIFIC DAY'S PRICE, YOUR
REQUEST MUST BE RECEIVED BEFORE THE CLOSE OF THE NEW YORK STOCK EXCHANGE ON THAT
DAY.
When the Funds calculate their share price, they value the securities they hold
at market value. Sometimes market quotes for some securities are not available
or are not representative of market value. Examples would be when events occur
that materially affect the value of a security at a time when the security is
not trading or when the securities are illiquid. In that case, securities may be
valued in good faith at fair value, using consistently applied procedures
decided on by the trustees or directors. Money market instruments maturing
within 60 days are valued at amortized cost, which approximates market value.
Assets and liabilities expressed in foreign currencies are converted into U.S.
dollars at the prevailing market rates quoted by one or more banks or dealers
shortly before the close of the Exchange.
A Fund's foreign securities may trade on days that the Exchange is closed and
the Fund's daily share price is not calculated. As a result, the Fund's daily
share price may be affected and you will not be able to purchase or redeem
shares.
- --------------------------------------------------------------------------------
OTHER
INFORMATION
ABOUT YOUR
ACCOUNT
SECURITY CONSIDERATIONS
You may give up some level of security by choosing to buy or sell shares by
telephone or online, rather than by mail. The Funds use procedures designed to
give reasonable assurance that telephone and online instructions are genuine,
including recording the transactions, testing the identity of the shareholder
placing the order and sending prompt written confirmation of transactions to the
shareholder of record. The Funds, and their service providers, are not liable
for acting upon instructions communicated by telephone or online that they
believe to be genuine if these procedures are followed.
CONFIRMATION OF YOUR PURCHASES AND REDEMPTIONS
After any transaction, you will receive written confirmation including the share
price and the dollar amount and number of shares bought or redeemed. Exception:
Shares purchased under Automatic Investment Plans or redeemed under Systematic
Withdrawal Plans will be confirmed quarterly. Partial shares will be calculated
to three decimal places.
SHARE CERTIFICATES
You may request and receive share certificates. However, unless specifically
requested, your account will be maintained on a book-entry basis without issuing
share certificates to represent your shares. If you decide to hold share
certificates, you must endorse your certificates and send them back to the
Berger Funds when you sell your shares.
PURCHASES THROUGH BROKER-DEALERS
You may buy Fund shares through certain broker-dealers or other financial
organizations, but these organizations may charge you a fee or may have
different minimums for first-time or additional investments which are not
applicable if you buy shares directly from the Funds.
THIRD PARTY ADMINISTRATORS
Certain brokerage firms and other companies may provide administrative services
(such as sub-transfer agency, recordkeeping or shareholder communications
services) to investors purchasing shares of the Funds through those companies. A
Fund's advisor or a Fund (if approved by its directors or trustees) may pay fees
to these companies for their services. These companies may also be appointed as
agents for or authorized by the Funds to accept on their behalf purchase and
redemption requests that are received in good order. Subject to Fund approval,
certain of these companies may be authorized to designate other entities to
accept purchase and redemption orders on behalf of the Funds.
YEAR 2000 AND EURO READINESS
Mutual funds and businesses around the world could be adversely affected if
computers do not properly process date-related information with respect to the
Year 2000. Similar adverse affects could result if computers do not properly
process information based on the conversion to the Euro, the new currency of the
European Union taking effect on January 1, 1999. The Funds' advisors are
addressing these issues for their computers and are getting reasonable
assurances from the Funds' other major service providers that they too are
addressing these issues to preserve smooth functioning of the Funds' trading,
pricing, shareholder account, custodial and other operations. There can be no
assurances, however, that all problems will be avoided.
These computer problems could also adversely affect the Funds' investments.
Improperly functioning computers may disrupt securities markets generally or
result in overall economic uncertainty. Individual companies may also be
adversely affected by the cost
29
<PAGE>
of fixing their computers, which could be substantial. The Funds' investment
managers consider these issues when evaluating investments for the Funds.
REDEMPTIONS IN-KIND
Each Fund intends to redeem its shares only for cash, although in order to
protect the interest of remaining shareholders, it retains the right to redeem
its shares in-kind under unusual circumstances. In-kind payment means payment
will be made to you in portfolio securities rather than cash. If this occurs,
you will incur transaction costs if you sell the securities for cash.
REDEMPTIONS BY THE FUNDS OF CERTAIN ACCOUNTS
To reduce their expenses, all Funds other than the Berger 100 Fund may
involuntarily redeem the shares in your account if your balance drops below
$2,000 ~ but only if it drops below this amount because you have redeemed
shares, not because the share value has declined. You will be given 60 days'
notice before a Fund undertakes any involuntary redemption. During that time,
you may buy more shares to bring your account above the minimum. Existing
shareholders of the following Funds have lower minimum balance requirements and
must maintain these minimum balances to avoid involuntary redemption:
<TABLE>
<CAPTION>
IF YOUR SHARES WERE YOUR MINIMUM IF YOUR SHARES WERE YOUR MINIMUM
FUND PURCHASED BEFORE... ACCOUNT BALANCE IS PURCHASED BEFORE... ACCOUNT BALANCE IS
<S> <C> <C> <C> <C>
Berger Growth and Income Fund January 26, 1996 $250 November 28, 1996 $500
Berger Small Company Growth Fund January 26, 1996 $250 November 28, 1996 $500
Berger New Generation Fund November 28, 1996 $1,000
</TABLE>
- --------------------------------------------------------------------------------
DISTRIBUTIONS
AND TAXES
DISTRIBUTIONS OF INCOME AND GAINS
Unless you tell us that you want to receive your distributions in cash, they
will be reinvested automatically in Fund shares. The Funds generally make two
different kinds of distributions:
- - Capital gains from the sale of portfolio securities held by a fund. Each Fund
will distribute any net realized capital gains annually, normally in December.
- - Net investment income from interest or dividends received on securities held
by a fund. The Funds will distribute their investment income as follows:
<TABLE>
<CAPTION>
DISTRIBUTIONS OF
FUND NET INVESTMENT INCOME
<S> <C>
Berger Growth and Income Fund QUARTERLY
(normally in March, June, September and December)
Berger Balanced Fund QUARTERLY
(normally in March, June, September and December)
All other Berger Funds ANNUALLY
(normally in December)
</TABLE>
YOUR TAXES
You generally will owe tax on amounts distributed to you by the Funds whether
you reinvest them in additional shares or receive them in cash. Distributions of
gains from the sale of assets held by a Fund for more than one year generally
are taxable to you at the applicable long-term capital gains rate, regardless of
how long you have owned your Fund shares. Distributions from other sources
generally are taxed as ordinary income.
Distributions made by the Funds to you will normally be capital gains. A portion
of those gains may be net short-term capital gains, which are taxed as ordinary
income. The Berger Growth and Income Fund and the Berger Balanced Fund normally
will also distribute net investment income, which is taxed as ordinary income.
The other Berger Funds generally will not distribute net investment income,
although any net investment income that is generated as a by-product of managing
their portfolios will be distributed to you.
If you redeem Fund shares that have appreciated in value, you will have a
taxable gain upon redemption. Exchanges are treated as a redemption and purchase
for tax purposes. Therefore, you will also have a taxable gain if you exchange
shares that have appreciated in value.
ADDITIONAL TAX INFORMATION
You should consult your own tax advisor about your particular situation. For
more information about other tax matters, including backup withholding for
certain taxpayers and other tax aspects of redemptions, see the SAI.
30
<PAGE>
TAX-SHELTERED
RETIREMENT PLANS
The Funds offer several tax-qualified retirement plans for individuals,
businesses and nonprofit organizations. For information about establishing a
Berger Funds IRA, Roth IRA, profit-sharing or money purchase pension plan,
403(b) Custodial Account, SEP-IRA, SIMPLE IRA account or other retirement plans,
please call (800) 551-5849 or write to The Berger Funds, P.O. Box 419958, Kansas
City, MO 64141-6958. Trustees for existing 401(k) or other plans interested in
using Fund shares as an investment or investment alternative in their plans are
invited to call the Funds at (800) 259-2820.
31
<PAGE>
ORGANIZATION
OF THE BERGER
FUNDS FAMILY
INVESTMENT
MANAGERS
The following companies provide day-to-day investment management and
administrative services to the Funds. The advisory fees paid to them for the
most recent fiscal year are shown in the following table as a percentage of each
Fund's average daily net assets.
BERGER ASSOCIATES, INC. (210 University Blvd., Suite 900, Denver, CO 80206)
serves as investment advisor, sub-advisor, administrator or sub-administrator to
mutual funds and institutional investors. Berger Associates has been in the
investment advisory business for over 20 years. When acting as investment
advisor, Berger Associates is responsible for managing the investment operations
of the Funds. Berger Associates also provides administrative services to the
Funds.
BBOI WORLDWIDE LLC (210 University Blvd., Suite 700, Denver, CO 80206) was
formed in 1996 as a joint venture between Berger Associates and Bank of Ireland
Asset Management (U.S.) Limited (BIAM). As investment advisor, BBOI oversees,
evaluates and monitors the investment advisory services provided by BIAM as
sub-advisor.
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED (BIAM) (20 Horseneck Lane,
Greenwich, CT 06830 (representative office); 26 Fitzwilliam Place, Dublin 2,
Ireland (main office)) serves as investment advisor or sub-advisor to pension
and profit-sharing plans and other institutional investors and mutual funds.
Bank of Ireland's investment management group was founded in 1966. As
sub-advisor, BIAM manages the investments in the Berger/BIAM International
Portfolio.
PERKINS, WOLF, MCDONNELL & COMPANY (PWM) (53 West Jackson Boulevard, Suite 818,
Chicago, IL 60604) served as investment advisor to the Berger Small Cap Value
Fund (then known as The Omni Investment Fund) from 1987 to February 1997, when
PWM became the sub-advisor to the Fund. As sub-advisor, PWM manages the Fund's
investment operations.
32
<PAGE>
<TABLE>
<CAPTION>
ADVISORY FEE
FUND PAID BY FUND THE FUND'S INVESTMENT MANAGER
<S> <C> <C>
BERGER NEW GENERATION 0.90% paid to Berger
FUND Associates
BERGER SELECT FUND 0.75% paid to Berger PATRICK S. ADAMS, Senior Vice President of Berger
Associates Associates. Mr. Adams joined Berger Associates in February
1997 and assumed management of the Fund at its inception in
December 1997. He has managed equity funds since 1985.
BERGER SMALL COMPANY 0.90% paid to Berger AMY K. SELNER, Vice President of Berger Associates, is the
GROWTH FUND Associates investment manager of the Berger Small Company Growth Fund.
Ms. Selner joined Berger Associates as a senior technology
analyst in April 1996 and assumed management of the Fund in
November 1998. Ms. Selner has more than seven years of
experience in the investment industry.
BERGER SMALL CAP VALUE 0.90% paid to Berger ROBERT H. PERKINS has been the investment manager for the
FUND Associates Berger Small Cap Value Fund since its inception in October
1987. Mr. Perkins has been an investment manager since 1970
and serves as President and a director of Perkins, Wolf,
McDonnell & Company. THOMAS PERKINS has been an investment
manager since 1974 and joined PWM as a portfolio manager in
1998. Thomas Perkins assumed co-management of the Fund in
January 1999.
BERGER MID CAP GROWTH 0.75% paid to Berger AMY K. SELNER assumed management of the Fund at its
FUND Associates(1) inception in December 1997.
BERGER MID CAP VALUE FUND 0.75% paid to Berger THOMAS M. PERKINS AND ROBERT H. PERKINS have served as
Associates co-investment managers of the Berger Mid Cap Value Fund
since its inception in August 1998.
BERGER 100 FUND 0.75% paid to Berger PATRICK S. ADAMS assumed management of the Fund in February
Associates 1997.
BERGER/BIAM INTERNATIONAL 0.90% paid to BBOI BIAM, using a team approach, has been the investment manager
FUND Worldwide(1) for the Portfolio, in which the Fund is invested, since its
inception in 1996. BIAM is the sub-advisor to the Portfolio
and is part of Bank of Ireland's asset management group,
established in 1966. Most of the team of investment
professionals have been with the group for at least ten
years.
BERGER GROWTH AND INCOME 0.75% paid to Berger TINO SELLITTO, Vice President of Berger, is the investment
FUND Associates manager of the Berger Growth and Income Fund. Mr. Sellitto
joined Berger as a senior equity analyst in January 1998 and
assumed management of the Fund in November 1998. Mr.
Sellitto has 4 years of experience in the investment
industry. Prior to that Mr. Sellitto served as an account
executive with an equipment distributor.
BERGER BALANCED FUND 0.70% paid to Berger PATRICK S. ADAMS AND JOHN B. JARES, Vice President of Berger
Associates(1) Associates, are co- investment managers of the Berger
Balanced Fund. Mr. Jares joined Berger Associates in May
1997. They assumed management of the Fund at its inception
in September 1997. Mr. Jares has five years of experience in
the investment management industry.
</TABLE>
1. After waivers, advisory fees paid were: Berger Mid Cap Growth Fund: .29%;
Berger/BIAM International Fund: .87%; and Berger Balanced Fund: .63% for the
fiscal year ended September 30, 1998.
33
<PAGE>
PORTFOLIO TURNOVER. Portfolio changes are made whenever the Fund's investment
manager believes that the Fund's goal could be better achieved by investment in
another security, regardless of portfolio turnover. At times, portfolio turnover
for a Fund may exceed 100% per year. A turnover rate of 100% means the
securities owned by a Fund were replaced once during the year. Higher turnover
rates may result in higher brokerage costs to the Funds and in higher net
taxable gains for you as an investor. Each Fund's portfolio turnover rate can be
found under the heading "Financial Highlights for the Berger Funds Family."
- --------------------------------------------------------------------------------
12b-1
ARRANGEMENTS
The Funds are "no-load" funds, meaning that you pay no sales charge or
commissions when you buy or sell Fund shares. However, each Fund has adopted a
12b-1 plan permitting it to pay a fee in connection with distribution of its
shares. Berger Associates is entitled to be paid a fee under each plan of 0.25%
of each Fund's average daily net assets. Because this fee is paid on an ongoing
basis, this may result in the cost of your investment increasing and over time
may cost you more than other types of sales charges. The fee may be used for
such things as marketing and promotion, compensation to dealers and others who
provide distribution and administrative services, and shareholder support
services (such as routine requests for information).
- --------------------------------------------------------------------------------
SPECIAL FUND
STRUCTURES
MULTI-CLASS. The Berger Small Cap Value Fund currently has two classes of
shares. The Investor Shares offered in this prospectus are available to the
general public. The other class of shares, Institutional Shares, are offered
through a separate prospectus and are designed for investors who maintain a
minimum account balance of $250,000. Each class of shares has its own expenses
so that share price, performance and distributions will differ between classes.
The 12b-1 plan adopted by the Berger Small Cap Value Fund applies only to the
Investor Shares. For more information on Institutional Shares, please call (800)
259-2820.
MASTER/FEEDER. The Berger/BIAM International Fund is organized as a "feeder"
fund in a "master/feeder" structure. This means that the Fund's assets are all
invested in a larger "master" portfolio of securities, the Berger/BIAM
International Portfolio, which has investment goals and policies identical to
those of the Fund. The other feeders investing in the Portfolio are the
International Equity Fund and the Berger/ BIAM International CORE Fund, each of
which has a minimum balance requirement of $1,000,000 and its own expenses so
that share price, performance and distributions will differ among feeders. For
more information on these feeders, please call (800) 259-2820.
The Fund may withdraw its investment in the Portfolio at any time, if the
Trustees determine that it is in the best interests of the Fund to do so. In
that event, the Fund might transfer to another master fund or hire its own
investment advisor. A withdrawal could result in the Fund receiving an in-kind
distribution of portfolio securities from the Portfolio. In that case, the Fund
could incur brokerage, tax or other charges if it converted the securities to
cash. In addition, an in-kind distribution could adversely affect the liquidity
of the Fund.
For more information on multi-class and master/ feeder fund structures, see the
SAI.
34
<PAGE>
FINANCIAL
HIGHLIGHTS
[ICON] FINANCIAL HIGHLIGHTS FOR THE BERGER FUNDS FAMILY - The financial
highlights will help you understand each Fund's financial performance for the
periods indicated. Certain information reflects financial results for a single
Fund share. Total return shows how much your investment in the Fund increased or
decreased during each period, assuming you reinvested all dividends and
distributions. Except as otherwise noted, PricewaterhouseCoopers LLP,
independent accountants, audited this information. Their reports are included in
the Funds' annual report, which is available without charge upon request.
BERGER NEW GENERATION FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended September 30,
-----------------------------------------------
1998 1997 1996(1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $14.72 $11.82 $10.00
- -----------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.13) 0.56
- -----------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (2.06) 3.64 1.26
- -----------------------------------------------------------------------------------------------------
Total from investment operations (2.06) 3.51 1.82
- -----------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- (0.61) --
- -----------------------------------------------------------------------------------------------------
Distributions (from capital gains) -- 0.00 --
- -----------------------------------------------------------------------------------------------------
Total dividends and distributions -- (0.61) --
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period $12.66 $14.72 $11.82
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Total Return(2) (13.99)% 31.53% 18.20%
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $113,693 $190,164 $116,912
- -----------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 1.72% 1.89% 1.90%(4)
- -----------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (1.37)% (1.51)% 12.35%(4)
- -----------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.72% 1.89% 2.09%(4)
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate 243% 184% 474%(5)
- -----------------------------------------------------------------------------------------------------
</TABLE>
1. Period from March 29, 1996 (commencement of investment operations) to
September 30, 1996.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the Advisor.
4. Annualized.
5. Portfolio turnover was greater 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.
35
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER SELECT FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM DECEMBER 31,
1997(1)
TO SEPTEMBER 30, 1998
- -----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.00
- -----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.07
- -----------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions 3.19
- -----------------------------------------------------------------------------------
Total from investment operations 3.26
- -----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- -----------------------------------------------------------------------------------
Distributions (from capital gains) --
- -----------------------------------------------------------------------------------
Total dividends and distributions --
- -----------------------------------------------------------------------------------
Net asset value, end of period $13.26
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Total Return(2) 32.60%
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $41,571
- -----------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 1.13%(3)
- -----------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.48%(3)
- -----------------------------------------------------------------------------------
Portfolio turnover rate 1486%(4)
- -----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
4. Portfolio turnover was greater than expected during this period due to active
trading undertaken in response to market conditions at a time when the Fund's
assets were still relatively small and before the Fund was fully invested.
36
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER SMALL COMPANY GROWTH FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended September 30,
---------------------------------------------------------------------
1998 1997 1996 1995 1994(1)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.33 $4.74 $3.61 $2.74 $2.50
- --------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.05) (0.03) (0.02) --
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions (1.24) 0.84 1.16 0.89 0.24
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.24) 0.79 1.13 0.87 0.24
- --------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- -- -- --(2) --
- --------------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (0.48) (0.20) -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (0.48) (0.20) -- -- --
- --------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.61 $5.33 $4.74 $3.61 $2.74
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Total Return(3) (24.70)% 17.68% 31.30% 31.90% 9.60%
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $561,741 $902,685 $871,467 $522,667 $211,852
- --------------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(4) 1.48% 1.67% 1.68% 1.89% 2.10%
- --------------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (1.01)% (1.09)% (0.97)% (0.74)% 0.32%(5)
- --------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.59% 1.67% 1.68% 1.89% 2.10%(5)
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 97% 111% 91% 109% 108%
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Period from December 30, 1993 (commencement of investment operations) to
September 30, 1994.
2. Dividends from net investment income were less than $0.01 per share.
3. Total return not annualized for periods of less than one full year.
4. Net expenses represent gross expenses reduced by fees waived by the Advisor.
5. Annualized.
37
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER SMALL CAP VALUE FUND -- INVESTOR SHARES
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
YEAR ENDED FEBRUARY 14, 1997(1)
SEPTEMBER 30, 1998 TO SEPTEMBER 30, 1997
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of
period $22.28 $17.24
- ----------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.42 0.03
- ----------------------------------------------------------------------------------------
Net realized and unrealized
gains (losses) on investments
and foreign currency
transactions (2.58) 5.01
- ----------------------------------------------------------------------------------------
Total from investment operations (2.16) 5.04
- ----------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment
income) (0.17) --
- ----------------------------------------------------------------------------------------
Distributions (from capital
gains) (2.37) --
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Total dividends and distributions (2.54) --
- ----------------------------------------------------------------------------------------
Net asset value, end of period $17.58 $22.28
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Total Return(2) (10.98)% 29.23%
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in
thousands) $108,465 $55,211
- ----------------------------------------------------------------------------------------
Ratio of net income (loss) to
average net assets 0.87% 0.60%(3)
- ----------------------------------------------------------------------------------------
Gross expense ratio to average
net assets 1.56% 1.66%(3)
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 69% 81%
- ----------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations for Investor Share class.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
38
<PAGE>
FINANCIAL
HIGHLIGHTS
The following supplemental financial highlights are for the Berger Small Cap
Value Fund for periods before February 14, 1997, when the Fund first adopted
share classes and began offering the Investor Shares. Therefore, the 0.25% 12b-1
fee paid by the Investor Shares is not reflected in the data on the table.
Except for information for the period January 1, 1997, through February 14,
1997, the information in the table was audited by the Fund's prior independent
accountants. The information for the period January 1, 1997, through February
14, 1997, is unaudited.
BERGER SMALL CAP VALUE FUND
SUPPLEMENTAL FINANCIAL HIGHLIGHTS
For A Share Outstanding Throughout the Periods Presented
<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1,
1997 TO
FEBRUARY 14, Years Ended December 31,
1997(2) -----------------------------------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987(1)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of
period $16.48 $14.57 $12.75 $13.99 $13.39 $11.39 $9.23 $12.18 $11.21 $10.06 $11.33
- -----------------------------------------------------------------------------------------------------------------------------------
From investment
operations
Net investment
income (loss) (0.02) 0.12 0.09 (0.01) 0.03 0.09 0.14 0.28 0.23 0.24 0.21
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized
gains (losses)
on investments 0.78 3.62 3.23 0.91 2.14 2.14 2.16 (2.95) 2.71 1.77 (0.29)
- -----------------------------------------------------------------------------------------------------------------------------------
Total from
investment
operations 0.76 3.74 3.32 0.90 2.17 2.23 2.30 (2.67) 2.94 2.01 (0.08)
- -----------------------------------------------------------------------------------------------------------------------------------
Less dividends and
distributions
Dividends (from
net investment
income) 0.00 (0.11) (0.09) 0.00 (0.03) (0.10) (0.14) (0.29) (0.22) (0.24) (0.20)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions
(from capital
gains) 0.00 (1.72) (1.41) (2.14) (1.54) (0.13) 0.00 0.00 (1.74) (0.62) (0.99)
- -----------------------------------------------------------------------------------------------------------------------------------
Total dividends and
distributions 0.00 (1.83) (1.50) (2.14) (1.57) (0.23) (0.14) (0.29) (1.96) (0.88) (1.19)
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $17.24 $16.48 $14.57 $12.75 $13.99 $13.39 $11.39 $9.23 $12.19 $11.21 $10.06
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Total Return(4) 4.61% 25.58% 26.07% 6.74% 16.25% 19.59% 25.01% (21.94)% 26.44% 20.09% (0.68)%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental
Data:
Net assets, end of
period (in
thousands) $38,622 $36,041 $31,833 $18,270 $16,309 $14,007 $11,940 $9,839 $13,576 $9,976 $6,748
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net income
(loss) to average
net assets (0.87)%(5) 0.69% 0.64% (0.04)% 0.18% 0.73% 1.24% 2.34% 1.85% 2.33% 1.87%(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Gross expenses to
average net
assets 2.04%(5) 1.48% 1.64% 1.43% 1.31% 1.41% 1.52% 1.84% 1.78% 1.44% 1.69%(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover
rate 27% 69% 90% 125% 108% 105% 130% 146% 118% 103% 189%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Covers the period from February 1, 1987 to December 31, 1987. Effective
October 20, 1987, the Fund became publicly registered under the Investment
Company Act of 1940. Prior thereto, its shares were not publicly offered.
2. Commencement of Investor Shares class.
3. All per share amounts prior to December 31, 1994 have been adjusted for a 10
for 1 share split which occured September 30, 1994.
4. Not annualized for periods of less than one full year.
5. Annualized.
39
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER MID CAP GROWTH FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM DECEMBER 31,
1997(1)
TO SEPTEMBER 30, 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.00
- ----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) --
- ----------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions 0.93
- ----------------------------------------------------------------------------------
Total from investment operations 0.93
- ----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- ----------------------------------------------------------------------------------
Distributions (from capital gains) --
- ----------------------------------------------------------------------------------
Total dividends and distributions --
- ----------------------------------------------------------------------------------
Net asset value, end of period $10.93
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total Return(2) 9.30%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $4,283
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Net expense ratio to average net assets(3) 2.00%(4)
- ----------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (0.82)%(4)
- ----------------------------------------------------------------------------------
Gross expense ratio to average net assets 2.46(4)
- ----------------------------------------------------------------------------------
Portfolio turnover rate 262%
- ----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the Advisor.
4. Annualized.
40
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER MID CAP VALUE FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM AUGUST 12, 1998(1)
TO SEPTEMBER 30, 1998
- ----------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.00
- ----------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.03
- ----------------------------------------------------------------------------------
Net realized and unrealized gains
(losses) on investments and foreign
currency transactions (0.70)
- ----------------------------------------------------------------------------------
Total from investment operations (0.67)
- ----------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) --
- ----------------------------------------------------------------------------------
Distributions (from capital gains) --
- ----------------------------------------------------------------------------------
Total dividends and distributions --
- ----------------------------------------------------------------------------------
Net asset value, end of period $9.33
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Total Return(2) (6.70)%
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------
Net assets, end of period (in thousands) $19,710
- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 2.30%(3)
- ----------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.68%(3)
- ----------------------------------------------------------------------------------
Portfolio turnover rate 25%
- ----------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Annualized.
41
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER 100 FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended September 30,
----------------------------------------------------------------------
1998 1997(1) 1996(1) 1995(1) 1994(1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $21.51 $19.64 $18.89 $15.96 $16.54
- ----------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) -- (0.09) (0.08) (0.04) (0.12)
- ----------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (2.57) 4.73 1.76 2.97 (0.46)
- ----------------------------------------------------------------------------------------------------------------------------
Total from investment operations (2.57) 4.64 1.68 2.93 (0.58)
- ----------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (6.95) (2.77) (0.93) -- --
- ----------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (6.95) (2.77) (0.93) -- --
- ----------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.99 $21.51 $19.64 $18.89 $15.96
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Total Return (16.08)% 26.50% 9.36% 18.36% (3.51)%
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $1,286,828 $1,889,048 $2,012,706 $2,205,678 $2,228,743
- ----------------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(2) 1.38% 1.41% 1.42% 1.49% 1.70%
- ----------------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets (0.38)% (0.40)% (0.43)% (0.28)% (0.74)%
- ----------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.38% 1.41% 1.42% 1.49% 1.95%
- ----------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 280% 200% 122% 114% 64%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Per share calculations for the period were based on average shares
outstanding.
2. Net expenses represent gross expenses reduced by fees waived by the Advisor.
42
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER/BIAM INTERNATIONAL FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30, PERIOD FROM NOVEMBER 7, 1996 (1)
1998 TO SEPTEMBER 30, 1997
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 11.46 $ 10.00
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.74 0.05
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (1.70) 1.41
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations (0.96) 1.46
- ---------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.06) --
- ---------------------------------------------------------------------------------------------------------------
Distributions (in excess of capital gains) (0.38) --
- ---------------------------------------------------------------------------------------------------------------
Total dividends and distributions (0.44) --
- ---------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 10.06 $ 11.46
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Total Return(2) (8.46)% 14.60%
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- ---------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $16,515 $18,673
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(3)(4) 1.80% 1.90%(5)
- ---------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 2.20% 0.61%(5)
- ---------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets(4) 1.83% 1.99%(5)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
1. Commencement of investment operations.
2. Total return not annualized for periods of less than one full year.
3. Net expenses represent gross expenses reduced by fees waived by the Advisor.
4. Reflects the Fund's expenses plus the Fund's pro rata share of the
Portfolio's expenses.
5. Annualized.
43
<PAGE>
The following table is based on the historical financial statements of the pool
of assets that was, in a practical sense, the predecessor to the Portfolio in
which the Fund is invested. The total return, expense ratios and per share data
on the table have been adjusted to reflect the increase in Fund operating
expenses that was expected to occur when the pool's assets were transferred to
the Portfolio over the pool's actual operating expenses for each period shown.
The table covers the period from the beginning of the pool through October 11,
1996, when the pool's assets were transferred to the Portfolio. The pool was not
registered with the SEC and was not subject to the investment restrictions
imposed on mutual funds. If the pool had been registered, the pool's financial
results might have been adversely affected.
INTERNATIONAL EQUITY POOL
ADJUSTED SELECTED DATA (UNAUDITED)
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JANUARY 1, JULY 31,
1996 TO Year Ended December 31, 1989(1) TO
OCTOBER 11, ----------------------------------------------------------------- DECEMBER 31,
1996(2) 1995 1994 1993 1992 1991 1990 1989
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Data:(3)
Net asset value,
beginning of period $8.94 $7.52 $8.16 $5.98 $5.43 $4.80 $5.00 $4.11
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
From investment
operations
Net investment income
(loss) 0.11 0.12 0.06 0.10 0.08 0.08 0.06 0.02
- --------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain
(loss) on
investments 0.95 1.30 (0.70) 2.07 0.47 0.55 (0.26) 0.88
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 1.06 1.41 (0.64) 2.17 0.55 0.63 (0.21) 0.90
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $10.00 $8.94 $7.52 $8.16 $5.98 $5.43 $4.60 $5.00
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Total Return(3) 11.91% 16.76% (7.80)% 36.38% 10.21% 13.19% (4.11)% 21.80%
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) $4,482 $5,662 $6,215 $5,495 $3,016 $2,364 $1,201 $916
- --------------------------------------------------------------------------------------------------------------------------------
Net expense ratio to
average net
assets(3,4) 1.78%(5) 1.78% 1.78% 1.78% 1.78% 1.78% 1.78% 1.78%(5)
- --------------------------------------------------------------------------------------------------------------------------------
Ratio of net income
(loss) to average net
assets(3) 1.11%(5) 1.03% 0.42% 0.92% 0.78% 1.26% 0.79% (0.47)%(5)
- --------------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to
average net assets(2) 1.83%(5) 1.83% 1.83% 1.83% 1.83% 1.83% 1.83% 1.83%(5)
- --------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 30% 34% 62% 41% 36% 27% 31% 41.3%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Commencement of operations of the pool.
2. Commencement of operations of the Portfolio in which the Fund is invested.
3. Adjusted to reflect the increase in expenses expected in operating the Fund,
including the Fund's pro rata share of the Portfolio's expenses. Additionally,
total return is not annualized for periods of less than one full year.
4. Net expenses represent gross expenses less fees that would have been waived
by the advisor of the Portfolio if the fee waiver in effect for the Portfolio
had been in effect for the pool.
5. Annualized.
44
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER GROWTH AND INCOME FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------------------------------------------
1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.72 $14.06 $12.89 $11.48 $11.27
- -------------------------------------------------------------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.04 0.14 0.20 0.16 0.12
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions (0.30) 4.28 1.17 1.43 0.21
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.26) 4.42 1.37 1.59 0.33
- -------------------------------------------------------------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.03) (0.13) (0.20) (0.18) (0.12)
- -------------------------------------------------------------------------------------------------------------------------
Dividends (in excess of net investment
income) (0.01) -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Distributions (from capital gains) (2.82) (1.63) -- -- --
- -------------------------------------------------------------------------------------------------------------------------
Total dividends and distributions (2.86) (1.76) (0.20) (0.18) (0.12)
- -------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.60 $16.72 $14.06 $12.89 $11.48
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Total Return (1.60)% 34.56% 10.66% 14.05% 2.91%
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
- -------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $301,330 $357,023 $315,538 $354,396 $391,570
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
Net expense ratio to average net assets(1) 1.44% 1.51% 1.56% 1.64% 1.81%
- -------------------------------------------------------------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 0.25% 0.87% 1.39% 1.33% 1.19%
- -------------------------------------------------------------------------------------------------------------------------
Gross expense ratio to average net assets 1.44% 1.51% 1.56% 1.64% 2.06%
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 417%(2) 173% 112% 85% 23%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Net expenses represent gross expenses reduced by fees waived by the Advisor.
2. Portfolio turnover was greater than expected during this period due to higher
than normal trading activity undertaken in response to market conditions that
existed at that time.
45
<PAGE>
FINANCIAL
HIGHLIGHTS
BERGER BALANCED FUND
For A Share Outstanding Throughout the Periods Presented
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
1998(1)
- ----------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.00
- ----------------------------------------------------------------------
From investment operations
Net investment income (loss) 0.22
- ----------------------------------------------------------------------
Net realized and unrealized gains (losses)
on investments and foreign currency
transactions 5.17
- ----------------------------------------------------------------------
Total from investment operations 5.39
- ----------------------------------------------------------------------
Less dividends and distributions
Dividends (from net investment income) (0.21)
- ----------------------------------------------------------------------
Distributions (from capital gains) (1.90)
- ----------------------------------------------------------------------
Total dividends and distributions (2.11)
- ----------------------------------------------------------------------
Net asset value, end of period $13.28
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Total Return 56.77%
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in thousands) $30,721
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Net expense ratio to average net assets(2) 1.50%
- ----------------------------------------------------------------------
Ratio of net income (loss) to average net
assets 1.81%
- ----------------------------------------------------------------------
Gross expense ratio to average net assets 1.57%
- ----------------------------------------------------------------------
Portfolio turnover rate 658%(3)
- ----------------------------------------------------------------------
</TABLE>
1. The Fund had no financial highlights for the one day of operations during the
period ended September 30, 1997.
2. Net expenses represent gross expenses reduced by fees waived by the Advisor.
3. Portfolio turnover was greater than expected during this period due to higher
than normal trading activity undertaken in response to market conditions at a
time when the Fund's assets were still relatively small and before the Fund was
fully invested.
46
<PAGE>
<TABLE>
<C> <S> <C> <C>
FOR MORE INFORMATION
Additional information about the
Funds' investments is available in the
Funds' semi-annual and annual reports
to shareholders. The Funds' annual
report contains a discussion of the You can also obtain copies by visiting
market conditions and investment the SEC's Public Reference Room in
strategies that affected the Funds' Washington DC. For information on the
performance over the past year. operation of the Public Reference
Room, call (800) SEC-0330. Copies of
You may wish to read the Statement of documents may also be obtained by
Additional Information (SAI) for more sending your request and the appro-
information on the Funds and the priate fee to the SEC's Public
securities they invest in. The SAI is Reference Section, Washington, DC
incorporated into this prospectus by 20549-6009.
reference, which means that it is
considered to be part of the INVESTMENT COMPANY ACT FILE NUMBERS:
prospectus. Berger Investment Portfolio
Trust 811-8046
You can get free copies of the annual Berger New Generation Fund
and semi-annual reports and the SAI, Berger Select Fund
request other information or get Berger Small Company Growth Fund
answers to your questions about the Berger Mid Cap Growth Fund
Funds by writing or calling the Funds Berger Mid Cap Value Fund
at: Berger Balanced Fund
Berger Omni Investment Trust 811-4273
The Berger Funds Berger Small Cap Value Fund --
P.O. Box 419958 Investor Shares
Kansas City, MO 64141-6958 The One Hundred Fund, Inc. 811-1382
(800) 551-5849 Berger 100 Fund
www.bergerfunds.com Berger/BIAM Worldwide Funds
Trust 811-07669
[BERGER MOUNTAIN LOGO] Text-only versions of Fund documents Berger/BIAM International Fund Prospectus
can be viewed online or downloaded Berger One Hundred and One Fund, printed on
Together we can move from the SEC's web site at Inc. 811-1383 recycled paper
mountains-Registered Trademark- www.sec.gov. Berger Growth and Income Fund [RECYCLE SYMBOL]
</TABLE>
<PAGE>
BERGER NEW GENERATION FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER SELECT FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER SMALL COMPANY GROWTH FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER SMALL CAP VALUE FUND - INVESTOR SHARES
A SERIES OF BERGER OMNI INVESTMENT TRUST
BERGER MID CAP GROWTH FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER MID CAP VALUE FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
BERGER 100 FUND
BERGER/BIAM INTERNATIONAL FUND
A SERIES OF BERGER/BIAM WORLDWIDE FUNDS TRUST
BERGER GROWTH AND INCOME FUND
BERGER BALANCED FUND
A SERIES OF BERGER INVESTMENT PORTFOLIO TRUST
STATEMENT OF ADDITIONAL INFORMATION
SHAREHOLDER SERVICES: 1-800-551-5849
This Statement of Additional Information ("SAI") is not a prospectus.
It relates to the Prospectus for the Berger Funds listed above (the "Funds"),
dated January 28, 1999, as it may be amended or supplemented from time to time,
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, meaning that a buyer pays no
commissions or sales charge when buying or redeeming shares of the Funds,
although each Fund pays certain costs of distributing its shares. See "Section
5. Expenses of the Funds -- 12b-1 Plans" below. This SAI describes each of
these Funds which have many features in common, but may have different
investment objectives and different investment emphases.
The financial statements of each of the Funds for the fiscal year
ended September 30, 1998, and the related Report of Independent Accountants on
those statements, are incorporated into this SAI by reference from the Funds'
1998 Annual Report to Shareholders dated September 30, 1998. A copy of that
Annual Report is available, without charge, upon request, by calling
1-800-333-1001.
DATED JANUARY 28, 1999
<PAGE>
TABLE OF CONTENTS
&
CROSS-REFERENCES TO PROSPECTUS
<TABLE>
<CAPTION>
SECTION PAGE CROSS-REFERENCES TO
NO. RELATED DISCLOSURES
IN PROSPECTUS
- --------------------------------------------------------------------------------
<S> <C> <C>
Introduction 1 Table of Contents
- --------------------------------------------------------------------------------
1. Portfolio Policies of the Funds 1 Berger Funds;
Investment Techniques,
Securities and the Associated
Risks
- --------------------------------------------------------------------------------
2. Investment Restrictions 15 Berger Funds;
Investment Techniques,
Securities and the Associated
Risks
- --------------------------------------------------------------------------------
3. Management of the Funds 22 Organization of the Berger Funds
Family
- --------------------------------------------------------------------------------
4. Investment Advisor 27 Organization of the Berger Funds
Family
- --------------------------------------------------------------------------------
5. Expenses of the Funds 33 Berger Funds;
Organization of the Berger Funds
Family; Financial Highlights
for the Berger Funds Family
- --------------------------------------------------------------------------------
6. Brokerage Policy 41 Organization of the Berger Funds
Family
- --------------------------------------------------------------------------------
7. How to Purchase Shares in the Funds 45 Buying Shares; Exchanging
Shares
- --------------------------------------------------------------------------------
8. How the Net Asset Value is 45 Your Share Price
Determined
- --------------------------------------------------------------------------------
9. Income Dividends, Capital Gains 46 Distributions and Taxes
Distributions and Tax Treatment
- --------------------------------------------------------------------------------
10. Suspension of Redemption Rights 48 Other Information About Your
Account
- --------------------------------------------------------------------------------
11. Tax-Sheltered Retirement Plans 48 N/A
- --------------------------------------------------------------------------------
12. Special Purchase and Exchange Plans 51 Exchanging Shares
- --------------------------------------------------------------------------------
13. Performance Information 52 Financial Highlights for the
Berger Funds Family
- --------------------------------------------------------------------------------
14. Additional Information 55 Organization of the Berger Funds
Family; Special Fund Structures
- --------------------------------------------------------------------------------
Financial Statements 61 Financial Highlights
- --------------------------------------------------------------------------------
</TABLE>
i
<PAGE>
INTRODUCTION
The Funds described in this SAI are all mutual funds, or open-end,
management investment companies. All of the Funds are diversified funds, except
the Berger Select Fund. See below under "Non-Diversification" in Section 1 for
further information concerning the Berger Select Fund. 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 or SAI
concerning the other Funds.
1. INVESTMENT STRATEGIES AND RISKS OF THE FUNDS
The Prospectus describes the investment goals (objectives) of each of
the Funds and the principal investment strategies employed to achieve those
objectives. It also describes the principal risks of investing in each Fund.
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. For the Berger/BIAM
International Fund, the term "Fund" in this Section 1 should be read to mean the
Berger/BIAM International Portfolio (the "Portfolio"), in which all the
investable assets of the Fund are invested.
COMMON AND PREFERRED STOCKS. Stocks represent shares of ownership in
a company. Generally, preferred stock has a specified dividend and ranks after
bonds and before common stocks in its claim on income for dividend payments and
on assets should the company be liquidated. After other claims are satisfied,
common stockholders participate in company profits on a pro-rata basis. Profits
may be paid out in dividends or reinvested in the company to help it grow.
Increases and decreases in earnings are usually reflected in a company's stock
price, so common stocks generally have the greatest appreciation and
depreciation potential of all corporate securities. While most preferred stocks
pay dividends, any of the Funds may purchase preferred stock where the issuer
has omitted, or is in danger of omitting, payment of its dividends. Such
investments would be made primarily for their capital appreciation potential.
All investments in stocks are subject to market risk, meaning that their prices
may move up and down with the general stock market, and that such movements
might reduce their value.
DEBT SECURITIES. Debt securities (such as bonds or debentures) are
fixed-income securities which bear interest and are issued by corporations or
governments. The issuer has a contractual obligation to pay interest at a
stated rate on specific dates and to repay principal on a specific maturity
date. In addition to market risk, debt securities are generally subject to two
other kinds of risk: credit risk and interest rate risk. Credit risk refers to
the ability of the issuer to meet interest or principal payments as they come
due. The lower the rating given a security by a rating service (such as Moody's
Investor Service ("Moody's") and Standard & Poor's ("S&P")), the greater the
credit risk the rating service perceives with respect to that security. None of
the Funds will purchase any nonconvertible securities rated below investment
grade (Ba or lower by Moody's, BB or lower by S&P). In cases where the ratings
assigned by more than one rating agency differ, the Funds will consider the
security as rated in the higher category. If nonconvertible securities
purchased by a Fund are downgraded to below investment grade following purchase,
the directors or trustees of the Fund, in consultation with the Fund's advisor
or sub-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 this SAI.
Interest rate risk refers to the fact that the value of fixed-income
securities (like debt securities) generally fluctuates in response to changes in
interest rates. A decrease in interest
-1-
<PAGE>
rates will generally result in an increase in the price of fixed-income
securities held by a Fund. Conversely, during periods of rising interest rates,
the value of fixed-income securities held by a Fund will generally decline.
Longer-term securities are generally more sensitive to interest rate changes and
are more volatile than shorter-term securities, but they generally offer higher
yields to compensate investors for the associated risks.
CONVERTIBLE SECURITIES. The Funds may also purchase debt or equity
securities which are convertible into common stock when the Fund's advisor or
sub-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 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
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. The credit risk associated with convertible securities generally is
reflected by their ratings by organizations such as Moody's or S&P or a similar
determination of creditworthiness by the Fund's advisor or sub-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, the Funds will not invest in any
security in default at the time of purchase, and each of the Funds 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 a 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 or sub-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 this SAI. Convertible
securities will be included in the 25% of total assets the Berger Balanced Fund
will keep in fixed-income senior securities. However, only that portion of
their value attributable to their fixed-income characteristics will be used in
calculating the 25%.
ZEROS/STRIPS. Certain Funds may 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.
SECURITIES OF SMALLER COMPANIES. Each of the Funds may invest in
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.
SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. Each of the
Funds may invest in securities of companies with limited operating histories.
The Funds consider these to be securities of companies with a record of less
than three years' continuous operation, even including
-2-
<PAGE>
the operations of any predecessors and parents. (These are sometimes referred
to as "unseasoned issuers.") These companies 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 companies. In
addition, many of these companies may also be small companies and involve the
risks and price volatility associated with smaller companies.
INITIAL PUBLIC OFFERINGS. The Funds may invest in a company's
securities at the time the company first offers securities to the public, that
is, at the time of the company's initial public offering or IPO. Although
companies can be any age or size at the time of their IPOs, they are often
smaller and have a limited operating history. See "Securities of Smaller
Companies" and "Securities of Companies with Limited Operating Histories"
above. In addition, market psychology prevailing at the time of an IPO can have
a substantial and unpredictable effect on the price of an IPO security. As a
result, a company's securities may be particularly volatile at the time of its
IPO and for a period thereafter.
FOREIGN SECURITIES. Each Fund may invest in foreign securities, which
may be traded in foreign markets and denominated in foreign currency. The
Funds' investments may also include American Depositary Receipts (ADRs),
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 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 Funds. Moreover, the economies of individual foreign countries
will vary in comparison to the U.S. economy in such respects as growth of gross
domestic product, rate 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. A developing country
generally is considered to be in the initial stages of its industrialization
cycle. 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.
-3-
<PAGE>
For any Fund invested 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 foreign 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 foreign currency
against the U.S. dollar would adversely affect the dollar value of the foreign
securities. 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.
PASSIVE FOREIGN INVESTMENT COMPANIES (PFICs). The Funds may
purchase the securities of certain companies considered Passive Foreign
Investment Companies (PFICs) under U.S. tax laws. For certain types of
PFICs, in addition to bearing their proportionate share of a Fund's expenses
(management fees and operating expenses), shareholders will also indirectly
bear similar expenses of such PFIC. PFIC investments also may be subject to
less favorable U.S. tax treatment, as discussed in Section 9 below.
ILLIQUID AND RESTRICTED SECURITIES. Each of the Funds (except the
Berger Small Cap Value 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. The Berger Small
Cap Value Fund is authorized to invest in illiquid securities, but not in
restricted securities. However, none of the Funds will purchase any such
security, the purchase of which would cause the Fund to invest more than 15%
(10% in the case of the Berger Small Cap Value Fund) 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% (10% in the case of the Berger Small Cap Value Fund) 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, a Fund's advisor or sub-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 willing to purchase or sell the security and the number of
other potential purchasers; (3) dealer undertakings to 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. 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 debt 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
-4-
<PAGE>
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.
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 certain risks, such as credit risk to the Fund if the other party
defaults on its obligation and the Fund is delayed or prevented from liquidating
the collateral. 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 and delayed. Further, 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. The Funds expect that these risks 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 market value at the time of purchase would be invested in such securities.
When-issued or delayed delivery transactions arise when securities (normally,
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 available on a comparable security 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 PORTFOLIO SECURITIES. Certain Funds may lend their
securities to qualified institutional investors (such as brokers, dealers or
other financial organizations) 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. 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
-5-
<PAGE>
securities, marked-to-market on a daily basis. By lending its securities, each
of those Funds 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.
Each of those Funds 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 receives
reasonable interest on the loan, which interest may include the Fund's investing
cash collateral in interest bearing short-term investments, and (e) the Fund
receives all dividends and distributions on the loaned securities and any
increase in the market value of the loaned securities.
The Funds bear 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. None of the Funds
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 (other than the Berger Small Cap Value Fund
and the Berger/BIAM International Fund) currently is only permitted 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"). The Berger Small Cap
Value Fund and the Berger/BIAM International Fund are not permitted to engage in
short sales at all.
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.
-6-
<PAGE>
In the past, a Fund could have made a short sale, as described above,
when it wanted to sell a security it owned at a current attractive price, but
also wished 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. However, federal tax legislation has
since eliminated the ability to defer recognition of gain or loss in short sales
against the box and accordingly, it is not anticipated that any of the Funds
will be engaging in these transactions unless there are further legislative
changes.
SPECIAL SITUATIONS. Each Fund may also invest in special situations,
that is, in common stocks of companies that have recently experienced or are
anticipated to experience a significant change in structure, management,
products or services. Examples of special situations are companies being
reorganized or merged, companies having unusual new products, or which enjoy
particular tax advantages, or companies that are run by new management or may be
probable takeover candidates. The opportunity to invest in special situations,
however, is limited and depends in part on the market's assessment of these
issuers and their circumstances. In addition, stocks of companies in special
situations may be more volatile, since the market value of these stocks may
decline if an anticipated event or benefit does not materialize.
HEDGING TRANSACTIONS. Each Fund is authorized to make limited use of
certain types of futures, forwards and/or 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. 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 the
Fund, may exceed the premium received for the option. However, a Fund is
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 the Fund will be able to meet its
obligations under its futures and forward contracts and its obligations under
options written by that Fund, the 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 a Fund utilizing futures transactions, forward
contracts and options are: (a) losses resulting from market movements not
anticipated by the Fund; (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 or termination of the
contract when so desired; and (e) the need for additional information and skills
beyond those required for the management of a portfolio of traditional
securities. In addition, when the 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.
-7-
<PAGE>
Following is additional information concerning the futures, forwards
and options which the Berger New Generation Fund, the Berger Select Fund, the
Berger Small Company Growth Fund, the Berger Mid Cap Growth Fund, the Berger Mid
Cap Value Fund, the Berger 100 Fund, the Berger Growth and Income Fund and the
Berger Balanced Fund may utilize, 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, those Funds may only write call options that are covered
and only up to 25% of the Fund's total assets.
Currently, the Berger/BIAM International Fund is authorized to utilize
only forward contracts for hedging purposes and is not permitted to utilize
futures or options. Consequently, the following additional information should
be read as applicable to that Fund only to the extent it discusses forwards. If
the trustees ever authorize that Fund to utilize futures or options, such
investments would be permitted solely for hedging purposes, and the Fund would
not be permitted to invest more than 5% of its net assets at the time of
purchase in initial margins for financial futures transactions and premiums for
options. In addition, the Fund's advisor or sub-advisor may be required to
obtain bank regulatory approval before that Fund engages in futures and options
transactions.
Currently, the Berger Small Cap Value Fund is authorized to utilize
only options for hedging purposes and is not permitted to utilize futures or
forwards. Consequently, the following additional information should be read as
applicable to that Fund only to the extent it discusses options. If the
trustees ever authorize that Fund to utilize futures or forwards, such
investments would be permitted solely for hedging purposes, and the Fund would
not be permitted to invest more than 5% of its net assets at the time of
purchase in initial margins for financial futures transactions and premiums for
options.
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.
Certain Funds 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
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
-8-
<PAGE>
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 a Fund's investment
limitations. A Fund will incur brokerage fees when it buys or sells 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. A 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.
Where applicable, 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, a 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 a 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 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 a Fund 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
-9-
<PAGE>
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 a Fund still may not result in a successful
use of futures.
Futures contracts entail additional risks. Although a Fund will only
utilize futures contracts when it 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 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 utilizing futures contracts 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 value less than or equal to the
securities it wishes to hedge or is considering purchasing. 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.
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
-10-
<PAGE>
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. Certain Funds may buy and write options
on futures contracts for hedging purposes. An option on a futures contract
gives a Fund 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 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 authorized to utilize forward
contracts currently intend that they will only use forward contracts or
commitments for hedging purposes and will only use forward foreign currency
exchange contracts, although a Fund 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 relevant 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
-11-
<PAGE>
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").
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 investment 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.
A Fund 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 utilizing forward contracts 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.
OPTIONS ON SECURITIES AND SECURITIES INDICES. Certain Funds 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
-12-
<PAGE>
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 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
-13-
<PAGE>
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 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 utilizing put
options 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 the 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.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The Berger Balanced Fund
may invest in certain mortgage-backed and asset-backed securities.
Mortgage-backed securities are securities that directly or indirectly represent
a participation in, or are secured by and payable from, mortgage loans secured
by real property. Asset-backed securities are similar, except that they are
backed by assets other than mortgages, such as motor vehicle installment sales
contracts,
-14-
<PAGE>
installment loan contracts, leases of various types of real and personal
property and receivables from revolving credit agreements (credit cards).
The primary risk of any mortgage-backed or asset-backed security is
the uncertainty of the timing of cash flows from the assets underlying the
securities. See the subheading "Special Risks of Mortgage-Backed Securities"
below for more information about prepayment and extension risks. Also, see the
subheading "Asset-Backed Securities" below for more information about
asset-backed securities.
There are currently three basic types of mortgage-backed securities:
(i) those issued or guaranteed by the United States Government or one of its
agencies or instrumentalities, such as the Government National Mortgage
Association (GNMA), the Federal National Mortgage Association (FNMA) and the
Federal Home Loan Mortgage Corporation (FHLMC); (ii) those issued by private
issuers that represent an interest in or are collateralized by mortgage-backed
securities issued or guaranteed by the United States Government or one of its
agencies or instrumentalities; and (iii) those issued by private issuers that
represent an interest in or are collateralized by whole mortgage loans or
mortgage-backed securities without a government guarantee but usually having
some form of private credit enhancement.
U.S. MORTGAGE-BACKED SECURITIES. The Fund may invest in
mortgage-backed securities issued or guaranteed by GNMA, FNMA and FHLMC. GNMA
certificates are backed by the "full faith and credit" of the United States.
FNMA and FHLMC certificates are not backed by the full faith and credit of the
United States, but the issuing agency or instrumentality has the right to
borrow, to meet its obligations, from an existing line of credit with the U.S.
Treasury. The U.S. Treasury has no legal obligation to provide such line of
credit and may choose not to do so. Each of GNMA, FNMA and FHLMC guarantee
timely distribution of interest to certificate holders. GNMA and FNMA also
guarantee timely distribution of scheduled principal payments. FHLMC generally
guarantees only the ultimate collection of principal of the underlying mortgage
loans.
COLLATERALIZED MORTGAGE OBLIGATIONS AND MULTICLASS PASS-THROUGH
SECURITIES. The Berger Balanced Fund may also invest in collateralized
mortgage obligations (CMOs). CMOs are debt obligations collateralized by
mortgage loans or mortgage pass-through securities. Typically, CMOs are
collateralized by GNMA, FNMA or FHLMC certificates, but also may be
collateralized by whole loans or private mortgage pass-through securities
(such collateral is referred to in this section as Mortgage Assets).
Multiclass pass-through securities are equity interests in a trust composed
of Mortgage Assets. Payments of principal of and interest on the Mortgage
Assets, and any reinvestment income thereon, provide the funds to pay debt
service on the CMOs or make scheduled distributions on the multiclass
pass-through securities. CMOs may be issued by agencies or instrumentalities
of the U. S. Government, or by private originators of, or investors in,
mortgage loans, including savings and loan associations, mortgage banks,
commercial banks, investment banks and special purpose subsidiaries of the
foregoing. The Fund may invest in CMOs issued by private entities only if
the CMOs are rated at least investment grade (at least BBB by S&P or Baa by
Moody's) or, if unrated, are determined to be of comparable quality.
In a CMO, a series of bonds or certificates is issued in multiple
classes. Each class of CMOs, often referred to as a "tranche," is issued at a
specific fixed or floating coupon rate and has a stated maturity or final
distribution date. Interest is paid or accrues on all classes of the CMOs on a
monthly, quarterly or semiannual basis. Certain CMOs may have variable or
floating interest rates. The principal of and interest on the Mortgage Assets
may be allocated among the several classes of a CMO series in a number of
different ways.
Generally, the purpose of the allocation of the cash flow of a CMO to
the various classes is to obtain a more predictable cash flow to the individual
tranches than exists with the
-15-
<PAGE>
underlying collateral of the CMO. As a general rule, the more predictable the
cash flow is on a CMO tranche, the lower the anticipated yield will be on that
tranche at the time of issuance relative to prevailing market yields on
mortgage-backed securities. As part of the process of creating more predictable
cash flows on most of the tranches in a series of CMOs, one or more tranches
generally must be created that absorb most of the volatility in the cash flows
on the underlying mortgage loans. The yields on these tranches may be higher
than prevailing market yields on mortgage-backed securities with similar
maturities. As a result of the uncertainty of the cash flows of these tranches,
the market prices of and yield on these tranches generally are more volatile.
The Fund also may invest in parallel pay CMOs and Planned Amortization
Class CMOs (PAC Bonds). Parallel pay CMOs are structured to provide payments of
principal on each payment date to more than one class. These simultaneous
payments are taken into account in calculating the stated maturity date or final
distribution date of each class, which, as with other CMO structures, must be
retired by its stated maturity date or final distribution date but may be
retired earlier. PAC Bonds generally require payments of a specified amount of
principal on each payment date. PAC Bonds always are parallel pay CMOs with the
required principal payment on such securities having the highest priority after
interest has been paid to all classes.
The Fund may not invest in "stripped" mortgage-backed securities
(interest-only securities (IOs) or principal-only securities (POs)) or in
mortgage-backed securities known as "inverse floaters."
PRIVATE MORTGAGE PASS-THROUGH SECURITIES. Private mortgage
pass-through securities are structured similarly to the GNMA, FNMA and FHLMC
mortgage pass-through securities and are issued by originators of and investors
in mortgage loans, including depository institutions, mortgage banks, investment
banks and special purpose subsidiaries of the foregoing. These securities
usually are backed by a pool of conventional fixed rate or adjustable rate
mortgage loans. Since private mortgage pass-through securities typically are
not guaranteed by an entity having the credit status of GNMA, FNMA and FHLMC,
these securities generally are structured with one or more types of credit
enhancement to make them more secure, which may be through guarantees, insurance
policies or letters of credit obtained by the issuer or sponsor from third
parties, through various means of structuring the transaction or through a
combination of those approaches. The Fund may invest in private mortgage
pass-through securities only if they are rated at least investment grade (at
least BBB by S&P or Baa by Moody's) or, if unrated, are determined to be of
comparable quality.
SPECIAL RISKS OF MORTGAGE-BACKED SECURITIES. Mortgage-backed
securities have certain different characteristics than traditional debt
securities. As a result of the risks associated with these securities, the Fund
could realize a loss by investing in them, regardless of their rating or their
credit enhancement features.
Among the major differences between mortgage-backed securities and
traditional debt securities are that on mortgage-backed securities, interest and
principal payments are made more frequently, usually monthly, and principal may
be prepaid at any time because the underlying mortgage loans or other assets
generally may be prepaid at any time. As a result, if the Fund purchases such a
security at a premium, a prepayment rate that is faster than expected will
reduce yield to maturity, while a prepayment rate that is slower than expected
will have the opposite effect of increasing yield to maturity. Alternatively,
if the Fund purchases these securities at a discount, faster than expected
prepayments will increase, while slower than expected prepayments will reduce,
yield to maturity.
Mortgage-backed securities, like all fixed-income securities,
generally decrease in value as a result of increases in interest rates. In
addition, although generally the value of fixed-income securities increases
during periods of falling interest rates and, as stated above, decreases
-16-
<PAGE>
during periods of rising interest rates, as a result of prepayments and other
factors, this is not always the case with respect to mortgage-backed securities.
Although the extent of prepayments on a pool of mortgage loans depends
on various economic and other factors, as a general rule, prepayments on fixed
rate mortgage loans will increase during a period of falling interest rates and
decrease during a period of rising interest rates. Accordingly, during a period
of declining rates, the Fund is likely to have greater amounts to reinvest as a
result of prepayments and is likely to have to reinvest those amounts at lower
interest rates than during a period of rising interest rates. Mortgage-backed
securities generally decrease in value as a result of increases in interest
rates and may benefit less than other fixed-income securities from declining
interest rates because of the risk of prepayment.
The Fund may invest in mortgage derivative securities, such as CMOs,
the average life of which is determined using mathematical models that
incorporate prepayment assumptions and other factors that involve estimates of
future economic and market conditions. These estimates may vary from actual
future results, particularly during periods of extreme market volatility. In
addition, under certain market conditions, the average weighted life of mortgage
derivative securities may not accurately reflect the price volatility of such
securities. For example, in periods of supply and demand imbalances in the
market for such securities and/or in periods of sharp interest rate movements,
the prices of mortgage derivative securities may fluctuate to a greater extent
than would be expected from interest rate movements alone.
The Fund's investments in mortgage derivative securities also subject
the Fund to extension risk. Extension risk is the possibility that rising
interest rates may cause prepayments to occur at a slower than expected rate.
This particular risk may effectively change a security which was considered
short or intermediate-term at the time of purchase into a long-term security.
Long-term securities generally fluctuate more widely in response to changes in
interest rates than short or intermediate-term securities.
In addition, CMOs and other mortgage-backed securities issued by
private entities are not U.S. government securities and are not guaranteed by
any government agency, although the pool of securities underlying a privately
issued mortgage-backed security may be subject to a guarantee. Therefore, if
the collateral securing a privately issued mortgage-backed security held by
the Fund, in addition to any third party credit support or guarantees, is
insufficient to make payment, the Fund could sustain a loss on its investment
in that security. However, as stated above, the Fund will invest in CMOs and
other mortgage-backed securities issued by private entities only if they are
rated at least investment grade (at least BBB by S&P or Baa by Moody's) or,
if unrated, are determined to be of comparable quality.
ASSET-BACKED SECURITIES. The Berger Balanced Fund may also invest in
asset-backed securities. Asset-backed securities are securities that represent
direct or indirect participation in, or are secured by and payable from, assets
other than mortgage-backed assets, such as motor vehicle installment sales
contracts, installment loan contracts, leases of various types of real and
personal property and receivables from revolving credit agreements (credit
cards). Asset-backed securities have yield characteristics similar to those of
mortgage-backed securities and are subject to many of the same risks. See the
subheading "Special Risks of Mortgage-Backed Securities" above for a discussion
of those risks. In addition, asset-backed securities involve certain risks that
are not posed by mortgage-backed securities, since asset-backed securities do
not usually contain the complete benefit of a security interest in the related
collateral. For example, credit card receivables generally are unsecured and
the debtors are entitled to the protection of a number of state and federal
consumer credit laws, including the bankruptcy laws, some of which may reduce
the ability to obtain full payment. In the case of automobile receivables, due
to various
-17-
<PAGE>
legal and economic factors, proceeds for repossessed collateral may not always
be sufficient to support payments on these securities.
New instruments and variations of existing mortgage-backed securities
and asset-backed securities continue to be developed. The Fund may invest in
any such instruments or variations as may be developed, to the extent consistent
with its investment objective and policies and applicable legal requirements.
TEMPORARY DEFENSIVE MEASURES. Each of the Funds (except the
Berger/BIAM International Fund) may increase its investment in government
securities, and other short-term, interest-bearing securities without regard to
the Fund's otherwise applicable percentage limits, policies or its normal
investment emphasis, when its advisor or sub-advisor believes market conditions
warrant a temporary defensive position. Taking larger positions in such
short-term investments may serve as a means of preserving capital in unfavorable
market conditions. When in a defensive position, a Fund could miss the
opportunity to participate in any stock or bond market advances that occur
during those periods, which the Fund might have been able to participate in if
it had remained more fully invested.
NON-DIVERSIFICATION. The Berger Select Fund is classified as a
"non-diversified" Fund under the Investment Company Act of 1940, which means
that the Fund is not limited by that Act in the proportion of its assets that it
may invest in the securities of a single issuer. The Fund's net asset value may
be more volatile than that of a more-widely diversified fund because the Fund
invests more of its assets in a smaller number of issuers. Consequently, the
Fund may be more vulnerable to any single economic, political or regulatory
occurrence, and the gains or losses on a single stock will have a greater impact
on the Fund's net asset value.
However, the Fund intends to conduct its operations so as to qualify
to be taxed as a "regulated investment company" under the Internal Revenue Code,
which will generally relieve the Fund of any liability for federal income tax to
the extent its earnings are distributed to shareholders. See Section 9--Income
Dividends, Capital Gains Distributions and Tax Treatment below. To qualify as a
regulated investment company, among other requirements, the Fund will limit its
investments so that, at the close of each quarter of the taxable year, (i) not
more than 25% of the market value of the Fund's total assets will be invested in
securities of a single issuer, and (ii) with respect to 50% of the market value
of its total assets, not more than 5% of the market value of its total assets
will be invested in the securities of a single issuer and the Fund will not own
more than 10% of the outstanding voting securities of a single issuer. These
limitations do not apply to U.S. government securities.
PORTFOLIO TURNOVER. The portfolio turnover rates of each of the Funds
are shown in the Financial Highlights tables included in the Prospectus. The
annual portfolio turnover rates of some 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. 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 for all the Funds may increase as a result of large
amounts of purchases and redemptions of shares of the Funds due to economic,
market or other factors that are not within the control of management.
Higher portfolio turnover will 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 to shareholders. The Funds' brokerage
policy is discussed
-18-
<PAGE>
further below under Section 6--Brokerage Policy, and additional information
concerning income taxes is located under Section 9--Income Dividends, Capital
Gains Distributions and Tax Treatment.
2. INVESTMENT RESTRICTIONS
The investment objective of the Berger New Generation Fund, the Berger
Select Fund, the Berger Small Company Growth Fund, the Berger Small Cap Value
Fund, the Berger Mid Cap Growth Fund, the Berger Mid Cap Value Fund, the Berger
100 Fund, the Berger/BIAM International Fund and the Berger Balanced 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.
Each Fund has adopted certain fundamental and non-fundamental
restrictions on its investments and other activities. Fundamental restrictions
may not 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. Non-fundamental restrictions may be changed in the future by
action of the directors or trustees without shareholder vote.
BERGER NEW GENERATION FUND, BERGER SELECT FUND, BERGER SMALL COMPANY GROWTH
FUND-Registered Trademark-, BERGER MID CAP GROWTH FUND, THE BERGER MID CAP VALUE
FUND AND BERGER BALANCED FUND
Except as noted, the following fundamental restrictions apply to each
of the Berger New Generation Fund, the Berger Select Fund, the Berger Small
Company Growth Fund, the Berger Mid Cap Growth Fund, the Berger Mid Cap Value
Fund and the Berger Balanced Fund. The Fund may not:
1. ( Does not apply to the Berger Select Fund) 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) 25% or more (more than 25%, in the case of the Berger Small Company
Growth 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.
-19-
<PAGE>
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.
In applying the industry concentration investment restriction (no. 2
above), each 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 New Generation Fund, the Berger Select Fund, the
Berger Small Company Growth Fund, the Berger Mid Cap Growth Fund, the Berger Mid
Cap Value Fund and the Berger Balanced 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 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.
2. 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).
3. The Fund may not invest in companies for the purposes of
exercising control of management.
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. 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.
-20-
<PAGE>
6. 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.
BERGER SMALL CAP VALUE FUND
The following fundamental restrictions apply to the Berger Small Cap
Value Fund. The Fund may not:
1. Issue senior securities as defined in the Investment Company Act
of 1940.
2. Invest in companies for the purpose of acquiring control or
management thereof.
3. Invest or hold securities of any issuer if the officers and
trustees of the Fund and its advisor own individually more than one-half (1/2)
of 1% of the securities of such issuer or together own more than 5% of the
securities of such issuer.
4. Invest in other investment companies, except in connection with a
plan of merger, consolidation, reorganization or acquisition of assets, or in
the open market involving no commission or profit to a sponsor or dealer (other
than a customary broker's commission).
5. Participate on a joint or joint and several basis in any trading
account in securities.
6. Purchase securities of any company with a record of less than
three (3) years continuous operation (including that of predecessors) if such
purchase would cause the cost of the Fund's investments in all such companies to
exceed 5% of the Fund's total assets.
7. Invest in securities (except those of the U.S. government or its
agencies) of any issuer if immediately thereafter the Fund would then own more
than 10% of that issuer's voting securities.
8. Loan cash or portfolio securities, except in connection with the
acquisition of debt securities which the Fund's investment policies and
restrictions permit it to purchase.
9. Borrow money in excess of 5% of the value of its assets and,
then, only as a temporary measure for extraordinary or emergency purposes.
10. Pledge, mortgage or hypothecate any of its assets to secure a
debt.
11. Purchase or sell real estate or any other interests in real
estate (including real estate limited partnership interests).
12. Purchase securities on margin or sell short.
13. Invest in commodities or commodity contracts.
14. Act as an underwriter of securities of other issuers or invest in
portfolio securities which the Fund might not be free to sell to the public
without registration of such securities under the Securities Act of 1933
("Restricted Securities").
-21-
<PAGE>
15. Invest more than 10% of the value of its net assets in illiquid
securities, including Restricted Securities, securities which are not readily
marketable, repurchase agreements maturing in more than seven (7) days, written
over-the-counter ("OTC") options and securities used as cover for written OTC
options.
16. Invest in oil, gas or mineral leases.
17. Invest more than 5% of the value of its net assets in warrants or
more than 2% of its net assets in warrants that are not listed on the New York
Stock Exchange, the American Stock Exchange, or the NASDAQ National Market
System.
18. Invest more than 25% of the value of its assets, at the time of
purchase, in securities of companies principally engaged in a particular
industry, although the Fund may as a temporary defensive measure invest up to
100% of its total assets in obligations issued or guaranteed by the U.S.
government or its agencies.
19. 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.
In applying the Fund's industry concentration restriction (number (18)
above), the Fund uses the industry groups used in the Data Monitor Portfolio
Monitoring System of William O'Neil & Co. Incorporated.
The trustees have adopted additional non-fundamental investment
restrictions for the Berger Small Cap Value Fund. These limitations may be
changed by the trustees 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
put and call options, but no more than 5% of the Fund's net assets at the time
of purchase may be invested in premiums for options. The Fund may only write
call options that are covered and only up to 10% of the Fund's net 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.
Investment restrictions that involve a maximum percentage of
securities or assets will not be considered to be violated unless an excess over
the percentage occurs immediately after, and is caused by, an acquisition or
encumbrance of securities or assets of the Berger Small Cap Value 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. The 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.
-22-
<PAGE>
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.
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 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:
-23-
<PAGE>
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 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 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.
4. 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.
BERGER/BIAM INTERNATIONAL FUND
The Fund has adopted the investment policy that it may,
notwithstanding any other fundamental or non-fundamental investment policy or
restriction, invest all of its investable assets in the securities of another
open-end investment company or series thereof with substantially the same
investment objective, policies and limitations as the Fund. This arrangement is
commonly referred to as a master/feeder.
All other fundamental and non-fundamental investment policies and
restrictions of the Berger/BIAM International Fund and the Berger/BIAM
International Portfolio (the "Portfolio") are identical. Therefore, although
the following investment restrictions refer to the Portfolio, they apply equally
to the Fund.
The Portfolio 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
Portfolio 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
Portfolio. Whenever the Fund is requested to vote on a change in the investment
restrictions of the Portfolio, the Fund will hold a meeting of its shareholders
and will cast its votes as instructed by the shareholders.
The following fundamental restrictions apply to the Portfolio. The
Portfolio may not:
1. With respect to 75% of the Portfolio'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
Portfolio in the securities of such issuer exceeds 5% of the value of the
Portfolio's total assets or (b) the Portfolio owns more than 10% of the
outstanding voting securities of such issuer.
2. Invest in any one industry (other than U.S. government
securities) 25% or more of the value of its total assets at the time of such
investment.
-24-
<PAGE>
3. Borrow money, except from banks for temporary or emergency
purposes in amounts not to exceed 25% of the Portfolio'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 Portfolio's
total assets taken at market value. When borrowings exceed 5% of the
Portfolio's total assets, the Portfolio will not purchase portfolio securities.
4. Act as a securities underwriter (except to the extent the
Portfolio 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 Portfolio may enter into repurchase
agreements and may lend portfolio securities in accordance with the Portfolio's
investment policies. The Portfolio 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.
In applying the industry concentration investment restriction (no. 2
above), the Portfolio uses the industry groups designated by the Financial Times
World Index Service.
The trustees have adopted additional non-fundamental investment
restrictions for the Portfolio. These limitations may be changed by the
trustees without a shareholder vote. The non-fundamental investment
restrictions include the following:
1. With respect to 100% of the Portfolio's total assets, the
Portfolio may not 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 Portfolio in the securities of such issuer
exceeds 5% of the value of the Portfolio's total assets or (b) the Portfolio
owns more than 10% of the outstanding voting securities of such issuer.
2. The Portfolio may not purchase securities on margin from a broker
or dealer, except that the Portfolio may obtain such short-term credits as may
be necessary for the clearance of transactions, and may not make short sales of
securities. This limitation shall not prohibit or restrict the Portfolio from
entering into futures, forwards and options contracts or from making margin
payments and other deposits in connection therewith.
3. The Portfolio 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 Portfolio may not invest in companies for the purposes of
exercising control of management.
5. The Portfolio 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 Portfolio, taken at market
value at the time of purchase would be invested in such securities.
-25-
<PAGE>
6. The Portfolio may not enter into any futures, forwards or
options, except that only for the purpose of hedging, the Portfolio may enter
into forward foreign currency exchange contracts with stated contract values of
up to the value of the Portfolio's assets.
7. The Portfolio may not purchase or sell securities on a
when-issued or delayed delivery basis, if as a result more than 5% of its net
assets taken at market value at the time of purchase would be invested in such
securities.
3. MANAGEMENT OF THE FUNDS
Each Fund is supervised by a board of directors or trustees who are
responsible for major decisions about the Funds' policies and overall Fund
oversight. Each Fund's board hires the companies that run day-to-day Fund
operations, such as the investment advisor, administrator, transfer agent and
custodian.
The directors or trustees and executive officers of each of the Funds
are listed below, together with information which includes their principal
occupations during the past five years and other principal business
affiliations.
MICHAEL OWEN, 412 Reid Hall, Montana State University, Bozeman, MT 59717,
DOB:1937. 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, Berger/BIAM
Worldwide Portfolios Trust and Berger Omni Investment Trust.
* GERARD M. LAVIN, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1942. President and a director of Berger 100 Fund and Berger
Growth and Income Fund, and President and a trustee of Berger
Investment Portfolio Trust and Berger Omni Investment Trust, since
February 1997. President and a trustee of Berger/BIAM Worldwide
Portfolios Trust and Berger/BIAM Worldwide Funds Trust since their
inception in May 1996. President and a trustee of Berger
Institutional Products Trust since its inception in October 1995.
President and a director since April 1995 of Berger Associates, Inc.
Member and Chairman of the Board of Managers and Co-Chief Executive
Officer on the Management Committee of BBOI Worldwide LLC since
November 1996. President and a director of West Side Investments,
Inc. (investments), a wholly-owned subsidiary of DST Systems, Inc.,
since February 1998. Formerly, a Vice President of DST Systems, Inc.
(data processing) from July 1995 to February 1998; President and Chief
Executive Officer of Investors Fiduciary Trust Company (banking) from
February 1992 to March 1995; and Chief Operating Officer of SunAmerica
Asset Management Co. (money management) from January 1990 to February
1992.
DENNIS E. BALDWIN, 3481 South Race Street, Englewood, CO 80110, DOB: 1928.
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, Berger/BIAM
Worldwide Portfolios Trust and Berger Omni Investment Trust.
* WILLIAM M. B. BERGER, 210 University Boulevard, Suite 900, Denver, CO
80206, DOB: 1925. Director and, formerly, President (1974-1994) of
Berger 100 Fund and Berger
-26-
<PAGE>
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. Trustee of Berger Omni Investment Trust since February
1997. 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, DOB: 1925. 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, Berger/BIAM Worldwide
Portfolios Trust and Berger Omni Investment Trust.
KATHERINE A. CATTANACH, 672 South Gaylord, Denver, CO 80209, DOB: 1945.
Managing Principal, Sovereign Financial Services, Inc. (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 Products Trust, Berger/BIAM Worldwide Funds
Trust, Berger/BIAM Worldwide Portfolios Trust and Berger Omni
Investment Trust.
* DENIS CURRAN, 20 Horseneck Lane, Greenwich, CT 06830, DOB: 1947. President
and a director since December 1994, and Senior Vice President and a
director from September 1991 to December 1994, of Bank of Ireland
Asset Management (U.S.) Limited (investment advisory firm). Member of
the Board of Managers and Chief Executive Officer on the Management
Committee of BBOI Worldwide LLC since November 1996. Trustee of
Berger/BIAM Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios
Trust since November 1996.
PAUL R. KNAPP, 33 North LaSalle Street, Suite 1900, Chicago, IL 60602, DOB:
1945. Since 1991, Chairman, President, Chief Executive Officer and a
director of Catalyst Institute (international public policy research
organization focused primarily on financial markets and institutions).
Since September 1997, President, Chief Executive Officer and a
director of DST Catalyst, Inc. (international financial markets
consulting, software and computer services company). Since February
1998, Vice President and a director of West Side Investments, Inc.
(investments), a wholly-owned subsidiary of DST Systems, Inc.
Previously (1991 - September 1997), Chairman, President, Chief
Executive Officer and a director of Catalyst Consulting (international
financial institutions business consulting firm). Prior thereto
(1988-1991), President, Chief Executive Officer and a director 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, Berger/BIAM Worldwide
Portfolios Trust and Berger Omni Investment Trust.
HARRY T. LEWIS, JR., 370 17th Street, Suite 3560, Denver, CO 80202, DOB:
1933. 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 J.D. Edwards & Co. (computer software company) since 1995.
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, Berger/BIAM
Worldwide Portfolios Trust and Berger Omni Investment Trust.
-27-
<PAGE>
WILLIAM SINCLAIRE, 3049 S. Perry Park Road, Sedalia, CO 80135, DOB: 1928.
President, Santa Clara LLC (cattle company), 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, Berger/BIAM
Worldwide Portfolios Trust and Berger Omni Investment Trust.
* PATRICK S. ADAMS, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1960. Executive Vice President and portfolio manager of the
Berger 100 Fund and Executive Vice President and co-portfolio manager
of the Berger Growth and Income Fund since February 1997. President
and portfolio manager of the Berger Select Fund since November 1997.
President and portfolio manager of the Berger IPT - 100 Fund and
President and co-portfolio manager of the Berger IPT - Growth and
Income Fund since February 1997. President and co-portfolio manager
of the Berger Balanced Fund since its inception in August 1997.
Senior Vice President of Berger Associates since February 1997.
Formerly, Senior Vice President from June 1996 to January 1997 with
Zurich Kemper Investments, Inc.; Portfolio Manager from March 1993 to
May 1996 with Founders Asset Management, Inc.; research analyst and
portfolio manager from January 1990 to January 1992 and Senior
Portfolio Manager/Senior Analyst from January 1992 to February 1993
with First of America Investment Corp.; and Portfolio Manager from
August 1985 to December 1989 with Capital Management Group - Star
Bank.
* JOHN B. JARES, 210 University Boulevard, Suite 900, Denver, CO 80206, DOB:
1966. Vice President and co-portfolio manager of the Berger Balanced
Fund since its inception in August 1997. Vice President (since October
1997) and Portfolio Manager (May 1997 to October 1997) with Berger
Associates. Formerly, Research Analyst (February 1994 to December
1996) and Co-Lead Portfolio Manager (January 1997 to May 1997) with
Founders Asset Management, Inc., and Research Associate with Lipper
Analytical Services, Inc. from October 1992 to February 1994.
* ANTHONY (TINO) R. SELLITTO III, 210 University Boulevard, Suite 900,
Denver, CO 80206, DOB: 1964. Vice President and portfolio manager of
the Berger Growth and Income Fund and the Berger IPT - Growth and
Income Fund since November 1998. Vice President (since September
1998) and senior equity analyst (January 1998 to September 1998) with
Berger Associates. Formerly, Vice President and Assistant Portfolio
Manager at Crestone Capital Management, Inc. (August 1995 to January
1998), Portfolio Manager at Hawaiian Trust Company (September 1994 to
August 1995) and Account Executive at W.W. Grainger Inc. (distributor
of industrial equipment) (October 1991 to September 1994).
* AMY K. SELNER, 210 University Boulevard, Suite 900, Denver, CO 80206, DOB:
1968. Vice President and portfolio manager of the Berger Mid Cap
Growth Fund since its inception in December 1997. Vice President
(since December 1997) and senior research analyst (April 1996 through
December 1997) with Berger Associates. Formerly, Assistant Portfolio
Manager and Research Analyst with INVESCO Trust Company from March
1991 through March 1996.
* JANICE M. TEAGUE, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1954. Vice President and Secretary (since November 1998) and
Assistant Secretary (September 1996 to November 1998) of the Berger
Funds. Vice President (since December 1997) and Assistant Secretary
(September 1996 through December 1997) with Berger Associates. Vice
President and Secretary with Berger Distributors, Inc., since August
1998. Formerly, self-employed as a business consultant from June 1995
through September 1996, Secretary of the Janus Funds from January 1990
to May 1995 and Assistant Secretary of Janus Capital Corporation from
October 1989 to May 1995.
-28-
<PAGE>
* DAVID J. SCHULTZ, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1950. Vice President and Treasurer (since November 1998) and
Assistant Treasurer (September 1996 to November 1998) of the Berger
Funds. Vice President (since February 1997) and Controller (since
August 1994) with Berger Associates. Chief Financial Officer and
Treasurer (since May 1996), Assistant Secretary (since August 1998)
and Secretary (May 1996 to August 1998) with Berger Distributors, Inc.
Formerly, Partner with Smith, Brock & Gwinn (accounting firm) from
January 1984 to August 1994.
* BRIAN S. FERRIE, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1958. Vice President of the Berger Funds since November 1998.
Vice President (since February 1997) and Chief Compliance Officer
(since August 1994) with Berger Associates. Chief Compliance Officer
with Berger Distributors, Inc., since May 1996. Formerly, Compliance
Officer with United Services Advisor, Inc., from January 1988 to July
1994, and Director of Internal Audit of United Services Funds from
January 1987 to July 1994.
* JOHN PAGANELLI, 210 University Boulevard, Suite 900, Denver, CO 80206,
DOB: 1967. Assistant Treasurer of the Berger Funds since November
1998. Vice President (since November 1998) and Manager of Accounting
(January 1997 through November 1998) with Berger Associates.
Formerly, manager of Accounting (December 1994 through October 1996)
and Senior Accountant (November 1991 through December 1994) with
Palmeri Fund Administrators, Inc.
- ----------------
* Interested person (as defined in the Investment Company Act of 1940) of one
or more of the Funds and/or of the Funds' advisors or sub-advisors.
The directors or trustees of the Funds have adopted a director/trustee
retirement age of 75 years.
DIRECTOR/TRUSTEE COMPENSATION
The officers of the Funds received no compensation from the Funds
during the fiscal year ended September 30, 1998. However, directors and
trustees of the Funds who are not "interested persons" of the Funds or their
advisors or sub-advisors are compensated for their services according to a fee
schedule, allocated among the Funds. Neither the officers of the Funds nor the
directors or trustees receive any form of pension or retirement benefit
compensation from the Funds.
The following table sets forth information regarding compensation paid
or accrued during the fiscal year ended September 30, 1998, for each director or
trustee of the Funds:
-29-
<PAGE>
<TABLE>
<CAPTION>
NAME AND POSITION AGGREGATE COMPENSATION FROM
WITH BERGER FUNDS
- ----------------------------------------------------------------------------------------------------------------------------------
BERGER BERGER BERGER BERGER BERGER BERGER BERGER BERGER/ BERGER BERGER ALL
NEW SELECT SMALL SMALL MID CAP MID CAP 100 BIAM GROWTH BALANCED BERGER
GENERATION FUND(1) COMPANY CAP GROWTH VALUE FUND INTERNATIONAL AND FUND FUNDS(4)
FUND GROWTH VALUE FUND(1) FUND(2) FUND(3) INCOME
FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dennis E. $1,852 $266 $10,808 $2,317 $ 36 $360 $24,043 $2,378 $4,691 $337 $47,000
Baldwin(5)
- ----------------------------------------------------------------------------------------------------------------------------------
William M.B. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Berger(5),(6)
- ----------------------------------------------------------------------------------------------------------------------------------
Louis R. Bindner(5) $1,828 $266 $10,663 $2,296 $ 36 $360 $23,722 $2,357 $4,629 $334 $46,400
- ----------------------------------------------------------------------------------------------------------------------------------
Katherine A. $1,852 $266 $10,808 $2,317 $ 36 $360 $24,043 $2,378 $4,691 $337 $47,000
Cattanach(5)
- ----------------------------------------------------------------------------------------------------------------------------------
Lucy Black $ 334 $ 0 $ 1,982 $ 294 $ 0 $ 0 $ 4,380 $ 277 $ 848 $ 41 $ 8,200
Creighton(5),(9)
- ----------------------------------------------------------------------------------------------------------------------------------
Denis Curran(7) N/A N/A N/A N/A N/A N/A N/A $ 0 N/A N/A $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Paul R. Knapp(5) $1,852 $266 $10,808 $2,317 $ 36 $360 $24,043 $2,378 $4,691 $337 $47,000
- ----------------------------------------------------------------------------------------------------------------------------------
Gerard M. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Lavin(5),(6),(7),(8)
- ----------------------------------------------------------------------------------------------------------------------------------
Harry T. Lewis(5) $1,852 $266 $10,808 $2,317 $ 36 $360 $24,043 $2,378 $4,691 $337 $47,000
- ----------------------------------------------------------------------------------------------------------------------------------
Michael Owen(5) $2,246 $323 $13,107 $2,810 $ 44 $440 $29,158 $2,884 $5,689 $408 $57,000
- ----------------------------------------------------------------------------------------------------------------------------------
William $1,828 $266 $10,663 $2,296 $ 36 $360 $23,772 $2,357 $4,629 $334 $46,400
Sinclaire(5)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-30-
<PAGE>
NOTES TO TABLE
(1) Covers the period December 31, 1997 (date operations commenced)
through September 30, 1998.
(2) The Berger Mid Cap Value Fund did not commence operations until August
12, 1998. Figures are estimates for the Fund's first year of operations.
(3) Comprised of the portion of the trustee compensation paid by
Berger/BIAM Worldwide Portfolios to its trustees and allocated to the Fund.
(4) Includes the Berger 100 Fund, the Berger Growth and Income Fund, the
Berger Investment Portfolio Trust (including the Berger Small Company Growth
Fund, the Berger New Generation Fund, the Berger Balanced Fund, the Berger
Select Fund and the Berger Mid Cap Growth Fund), the Berger Institutional
Products Trust (four series), the Berger/BIAM Worldwide Funds Trust (three
series, including the Berger/BIAM International Fund), the Berger/BIAM Worldwide
Portfolios Trust (one series) and the Berger Omni Investment Trust (including
the Berger Small Cap Value Fund). Aggregate compensation figures do not include
first-year estimates for the Berger Mid Cap Value Fund. Of the aggregate
amounts shown for each director/trustee, the following amounts were deferred
under applicable deferred compensation plans: Dennis E. Baldwin $36,100; Louis
R. Bindner $3,638; Katherine A. Cattanach $45,202; Lucy Black Creighton $6,280;
Michael Owen $10,276; William Sinclaire $14,898.
(5) Director of Berger 100 Fund and Berger Growth and Income Fund and
trustee of Berger Investment Portfolio Trust, Berger Institutional Products
Trust, Berger/BIAM Worldwide Portfolios Trust, Berger/BIAM Worldwide Funds Trust
and Berger Omni Investment Trust.
(6) Interested person of Berger Associates.
(7) Interested person of BBOI Worldwide LLC. Trustee of Berger/BIAM
Worldwide Funds Trust and Berger/BIAM Worldwide Portfolios Trust.
(8) President of Berger 100 Fund, Berger Growth and Income Fund, Berger
Investment Portfolio Trust, Berger/BIAM Worldwide Portfolios Trust, Berger/BIAM
Worldwide Funds Trust and Berger Omni Investment Trust.
(9) Resigned as a director and trustee effective November 1997.
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 Funds.
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 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
obligation to make payments of deferred fees under the plan is a general
obligation of the Fund.
As of November 10, 1998, the officers and directors/trustees of the
Funds as a group owned of record or beneficially approximately 3.05% of the
Berger Mid Cap Growth Fund, approximately 1.54% of the Berger Select Fund and an
aggregate of less than 1% of the outstanding shares of each of the other Funds.
4. INVESTMENT ADVISORS AND SUB-ADVISORS
BERGER ASSOCIATES - INVESTMENT ADVISOR
Berger Associates, Inc. ("Berger Associates"), 210 University
Boulevard, Suite 900, Denver, CO 80206, is the investment advisor to all the
Berger Funds except the Berger/BIAM International Fund. Berger Associates is
responsible for managing the investment operations of these Funds and the
composition of their investment portfolios. Berger Associates also acts as each
Funds' administrator and is responsible for such functions as monitoring
compliance with all applicable federal and state laws.
-31-
<PAGE>
Berger Associates has been in the investment advisory business for
over 20 years. It serves as investment advisor or sub-advisor to mutual funds
and institutional investors and had assets under management of approximately
$3.0 billion as of September 30, 1998. Berger Associates is a wholly-owned
subsidiary of Kansas City Southern Industries, Inc. ("KCSI"). 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.
BBOI WORLDWIDE LLC - INVESTMENT ADVISOR
BBOI Worldwide LLC ("BBOI Worldwide"), 210 University Boulevard,
Denver, CO 80206, is the investment advisor to the Berger/BIAM International
Portfolio (the "Portfolio"), in which all the investable assets of the
Berger/BIAM International Fund are invested. BBOI Worldwide oversees, evaluates
and monitors the investment advisory services provided to the Portfolio by the
Portfolio's sub-advisor and is responsible for furnishing general business
management and administrative services to the Portfolio.
BBOI Worldwide is a Delaware limited liability company formed in 1996.
BBOI Worldwide is a joint venture between Berger Associates and Bank of Ireland
Asset Management (U.S.) Limited ("BIAM"), the sub-advisor to the Portfolio,
which have both been in the investment advisory business for many years.
Berger Associates and BIAM each own a 50% membership interest in BBOI
Worldwide and each have an equal number of representatives on BBOI Worldwide's
Board of Managers. Berger Associates' role in the joint venture is to provide
administrative services, and BIAM's role is to provide international and global
investment management expertise. Agreement of representatives of both Berger
Associates and BIAM is required for all significant management decisions.
BANK OF IRELAND ASSET MANAGEMENT (U.S.) LIMITED - SUB-ADVISOR
As permitted in its Investment Advisory Agreement with the Berger/BIAM
International Portfolio, BBOI Worldwide has delegated day-to-day investment
management responsibility for the Portfolio to BIAM. As sub-advisor, BIAM
manages the investments in the Portfolio and determines what securities and
other investments will be purchased, retained, sold or loaned, consistent with
the investment objective and policies established by the trustees. BIAM's main
offices are at 26 Fitzwilliam Place, Dublin 2, Ireland. BIAM maintains a
representative office at 20 Horseneck Lane, Greenwich, CT 06830. BIAM is an
indirect wholly-owned subsidiary of Bank of Ireland, a publicly traded,
diversified financial services group with business operations worldwide. Bank
of Ireland provides investment management services through a network of related
companies, including BIAM which serves primarily institutional clients in the
United States and Canada. Bank of Ireland and its affiliates managed assets for
clients worldwide in excess of $33 billion as of September 30, 1998.
Bank of Ireland or its affiliates may have deposit, loan or other
commercial or investment banking relationships with the issuers of securities
which may be purchased by the Portfolio, including outstanding loans to such
issuers which could be repaid in whole or in part with the proceeds of
securities purchased by the Portfolio. Federal law prohibits BIAM, in making
investment decisions, from using material non-public information in its
possession or in the possession of any of its affiliates. In addition, in
making investment decisions for the Portfolio, BIAM will not take into
consideration whether an issuer of securities proposed for purchase or sale by
the Portfolio is a customer of Bank of Ireland or its affiliates.
-32-
<PAGE>
The Glass-Steagall Act prohibits a depository institution and certain
affiliates from underwriting or distributing most securities and from
affiliating with businesses engaged in certain similar activities. BIAM
believes that it may perform the services for the Fund contemplated by the
Sub-Advisory Agreement between BBOI Worldwide and BIAM consistent with the
Glass-Steagall Act and other applicable banking laws and regulations. However,
future changes in either Federal or state statutes and regulations concerning
the permissible activities of banks and their affiliates, as well as future
judicial or administrative decisions or interpretations of present and future
statutes and regulations, might prevent BIAM from continuing to perform those
services for the Fund. If the circumstances described above should change, the
trustees of the Fund and the Portfolio would review the relationships with BIAM
and consider taking all actions appropriate under the circumstances.
PERKINS, WOLF, MCDONNELL & COMPANY - SUB-ADVISOR
Perkins, Wolf, McDonnell & Company ("PWM"), 53 West Jackson Boulevard,
Suite 818, Chicago, Illinois 60604, has been engaged as the investment
sub-advisor for the Berger Small Cap Value Fund and the Berger Mid Cap Value
Fund. PWM was organized in 1980 under the name Mac-Per-Wolf Co. to operate as a
securities broker-dealer. In September 1983, it changed its name to Perkins,
Wolf, McDonnell & Company. PWM is a member of the National Association of
Securities Dealers, Inc. (the "NASD") and, in 1984, became registered as an
investment advisor with the SEC.
PWM was the investment advisor of the Berger Small Cap Value Fund from
the date the Fund commenced operations in 1985 to February 1997. PWM became the
investment sub-advisor to the Fund on February 14, 1997, following shareholder
approval of a new Sub-Advisory Agreement between Berger Associates as advisor
and PWM as sub-advisor. PWM has been the investment sub-adviser to the Berger
Mid Cap Value Fund since it commenced operations in August 1998.
Thomas M. Perkins and Robert H. Perkins, as co-investment managers,
are responsible for the day-to-day investment management of the Berger Small Cap
Value Fund and the Berger Mid Cap Value Fund. Robert Perkins has been an
investment manager since 1970 and serves as President and a director of PWM.
Thomas Perkins has been an investment manager since 1974 and joined PWM as a
portfolio manager in 1998. Robert Perkins owns 49% of PWM. Robert Perkins and
Thomas Perkins are brothers. Gregory E. Wolf owns 20% of PWM and serves as its
Treasurer and a director.
INVESTMENT ADVISORY AGREEMENTS
Under the Investment Advisory Agreements between each Fund and its
advisor, the advisor is generally responsible for furnishing continuous advice
and recommendations as to the acquisition, holding or disposition of securities
or other assets which each Fund may own or contemplate acquiring from time to
time. Each Investment Advisory Agreement provides that the investment advisor
shall not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission taken with respect to
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties thereunder and except to the extent otherwise provided by law.
Under the Agreements, the advisor is compensated for its services by
the payment of a fee at the following annual rates, calculated as a percentage
of the average daily net assets of the Fund:
-33-
<PAGE>
<TABLE>
<CAPTION>
FUND ADVISOR INVESTMENT ADVISORY FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Berger New Generation Fund Berger Associates 0.90%(1)
- ---------------------------------------------------------------------------------------------------------
Berger Select Fund Berger Associates 0.75%
- ---------------------------------------------------------------------------------------------------------
Berger Small Company Growth Fund Berger Associates 0.90%(3)
- ---------------------------------------------------------------------------------------------------------
Berger Small Cap Value Fund Berger Associates (2) 0.90% (2)
- ---------------------------------------------------------------------------------------------------------
Berger Mid Cap Growth Fund Berger Associates 0.75% (1)
- ---------------------------------------------------------------------------------------------------------
Berger Mid Cap Value Fund Berger Associates (2) 0.75% (2)
- ---------------------------------------------------------------------------------------------------------
Berger 100 Fund Berger Associates 0.75% (3)
- ---------------------------------------------------------------------------------------------------------
Berger/BIAM International Fund (4) BBOI Worldwide (4) 0.90% (4)
- ---------------------------------------------------------------------------------------------------------
Berger Growth and Income Fund Berger Associates 0.75% (3)
- ---------------------------------------------------------------------------------------------------------
Berger Balanced Fund Berger Associates 0.70% (1)
- ---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Under a written agreement, the Fund's investment advisor waives its fee
to the extent that the Fund's annual operating expenses in any fiscal year,
including the investment advisory fee and the 12b-1 fee, but excluding brokerage
commissions, interest, taxes and extraordinary expenses, exceed 1.90% in the
case of the Berger New Generation Fund, and 2.00% in the case of the Berger Mid
Cap Growth Fund, and 1.50% in the case of the Berger Balanced Fund, of the
Fund's average daily net assets for that fiscal year. The agreement may be
terminated by the advisor upon 90 days' prior written notice to the Fund.
(2) Fund is sub-advised by PWM. See text preceding and following table.
For the Berger Small Cap Value Fund, the investment advisory fee is allocated
among the Investor Shares and the other class of the Fund on the basis of net
assets attributable to each such class.
(3) Under a written agreement, the Fund's investment advisor waives its fee
to the extent that the Fund's annual operating expenses in any fiscal year,
including the investment advisory fee, but excluding the 12b-1 fee, brokerage
commissions, interest, taxes and extraordinary expenses, exceed 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. The agreement may be terminated by the advisor upon 90 days' prior
written notice to the Fund.
(4) The Berger/BIAM International Fund bears its pro rata portion of the fee
paid by the Berger/BIAM International Portfolio to BBOI Worldwide as the
advisor. The Portfolio is sub-advised by BIAM. See text preceding and
following table. Under a written agreement, the Portfolio's investment advisor
waives its investment advisory fee to the extent that the Portfolio's annual
operating expenses in any fiscal year, including the investment advisory fee and
custodian fees, but excluding brokerage commissions, interest, taxes and
extraordinary expenses, exceed 1.00% of the Portfolio's average daily net assets
for that fiscal year. The agreement may not be terminated without the prior
written consent of the Portfolio by a vote of its Board of Trustees. Any such
reduction in the advisory fee paid by the Portfolio will also reduce the pro
rata share of the advisory fee borne indirectly by the Berger/BIAM International
Fund.
Each Fund's current Investment Advisory Agreement will continue in
effect until the last day of April 1999 or 2000, 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 the advisor. Each Agreement is subject to termination by the Fund or
the advisor on 60 days' written notice, and terminates automatically in the
event of its assignment.
-34-
<PAGE>
Under the Sub-Advisory Agreement between the advisor and the
sub-advisors for the Berger/BIAM International Portfolio, the Berger Small Cap
Value Fund and the Berger Mid Cap Value Fund, the sub-advisor is responsible for
day-to-day investment management. The sub-advisor manages the investments and
determines what securities and other investments will be acquired, held or
disposed of, consistent with the investment objective and policies established
by the trustees. Each Sub-Advisory Agreement provides that the sub-advisor
shall not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission taken with respect to
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties thereunder and except to the extent otherwise provided by law.
No fees are paid directly to the sub-advisors by the Funds. PWM, as
the sub-advisor of the Berger Small Cap Value Fund, receives from the advisor a
fee at the annual rate of 0.90% of the first $75 million of average daily net
asset of the Fund, 0.50% of the next $125 million, and 0.20% of any amounts in
excess of $200 million. As the sub-advisor of the Berger Mid Cap Value Fund,
PWM receives from the advisor a fee at the annual rate of 0.75% of the first $50
million of average daily net assets of the Fund, 0.375% of the next $50 million
and 0.20% of any amount in excess of $100 million, subject to a minimum of
$400,000 per year for the first 2-1/2 years. BIAM, as the sub-advisor of the
Berger/BIAM International Portfolio, receives from the advisor a fee at the
annual rate of 0.45% of the average daily net assets of the Portfolio. During
certain periods, BIAM may voluntarily waive all or a portion of its fee under
the Sub-Advisory Agreement, which will not affect the fee paid by the Portfolio
to the advisor.
The Sub-Advisory Agreements will continue in effect until April 1999
or 2000, and thereafter from year to year if such continuation is specifically
approved at least annually by the 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
trustees of the Fund who are not "interested persons" (as that term is defined
in the Investment Company Act of 1940) of the Fund or the advisor or the
sub-advisor. The Sub-Advisory Agreements are subject to termination by the Fund
or the sub-advisor on 60 days' written notice, and terminate automatically in
the event of their assignment and in the event of termination of the related
Investment Advisory Agreement.
OTHER ARRANGEMENTS BETWEEN BERGER ASSOCIATES AND PWM
Berger Associates and PWM entered into an Agreement, dated November
18, 1996, as amended January 27, 1997 and April 8, 1998 (the "November 18
Agreement"), under which, among other things, PWM agreed that, so long as Berger
Associates acts as the advisor to the Berger Small Cap Value Fund, and PWM
provides sub-advisory or other services in connection with the Fund, PWM will
not manage or provide advisory services to any registered investment company
that is in direct competition with the Fund. PWM has agreed to the same
restriction with respect to the Berger Mid Cap Value Fund.
The November 18 Agreement also provides that at the end of the first
five years under the Sub-Advisory Agreement for the Berger Small Cap Value Fund
(or at such earlier time if the Sub-Advisory Agreement is terminated or not
renewed by the trustees other than for cause), Berger Associates and PWM will
enter into a consulting agreement for PWM to provide consulting services to
Berger Associates with respect to the Fund, subject to any requisite approvals
under the Investment Company Act of 1940. Under the Consulting Agreement, PWM
would provide training and assistance to Berger Associates analysts and
marketing support appropriate to the Fund and would be paid a fee at an annual
rate of 0.10% of the first $100 million of average daily net assets of the Fund,
0.05% of the next $100 million and 0.02% on any part in excess of $200 million.
No part of the consulting fee would be borne by the Fund.
-35-
<PAGE>
Berger Associates and PWM have also agreed that if the Sub-Advisory
Agreement with PWM pertaining to the Berger Mid Cap Value Fund is terminated or
not renewed by the trustees other than for cause within the first 2-1/2 years of
its effectiveness, Berger Associates and PWM will enter into a consulting
agreement for the remainder of the 2-1/2 year period, under which PWM will
provide consulting services to Berger Associates with respect to the Fund,
subject to any requisite approvals under the Investment Company Act of 1940.
Under the Consulting Agreement, PWM would provide training and assistance to
Berger Associates analysts and marketing support appropriate to the Fund and for
those services, Berger Associates would pay PWM a fee at a rate equal to
$400,000 annually less certain agreed amounts. No part of the consulting fee
would be borne by the Fund.
TRADE ALLOCATIONS
Investment decisions for each Fund and other accounts advised by the
Funds' advisors and sub-advisors 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 a Fund's advisor or sub-advisor 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, the
advisor or sub-advisor 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.
RESTRICTIONS ON PERSONAL TRADING
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.
PWM has adopted a Code of Ethics which is substantially similar to the
Code adopted by Berger Associates. BBOI Worldwide has also adopted a Code of
Ethics substantially similar to the Code adopted by Berger Associates covering
all board members, officers, employees and other access persons (as defined
below) of BBOI Worldwide who are not also covered by an approved Code of Ethics
of an affiliated person who is an investment advisor ("covered persons").
-36-
<PAGE>
At present, there are no persons who would be covered by BBOI Worldwide's Code
of Ethics who are not also covered by the Code of Ethics of Berger Associates or
BIAM, which are both investment advisors affiliated with BBOI Worldwide.
BIAM has adopted a Code of Ethics which restricts its officers,
employees and other staff from personal trading in specified circumstances,
including among others prohibiting participation in initial public offerings,
prohibiting dealing in a security for the seven days before and after any trade
in that security on behalf of clients, prohibiting trading in a security while
an order is pending for any client on that same security, and requiring profits
from short-term trading in securities (purchase and sale within a 60-day period)
to be forfeited. In addition, staff of BIAM must report all of their personal
holdings in securities annually and must disclose their holdings in any private
company if an investment in that same company is being considered for clients.
Staff of BIAM are required to pre-clear all transactions in securities not
otherwise exempt under the Code of Ethics and must instruct their broker to
provide BIAM with duplicate confirmations of all such personal trades.
5. EXPENSES OF THE FUNDS
All Funds Except the Berger/BIAM International Fund
In addition to paying an investment advisory fee to its advisor, each
Fund (other than the Berger/BIAM International Fund) pays all of its expenses
not assumed by its advisor, including, but not limited to, 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 for shareholders
of the Fund.
Under a separate Administrative Services Agreement with respect to
each of such Funds, Berger Associates performs certain administrative and
recordkeeping services not otherwise performed by the Fund's custodian and
recordkeeper, including the preparation of financial 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 0.01%
of its average daily net assets for such services. These 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.
The following tables show the total dollar amounts of advisory fees
and administrative services fees paid by each of such Funds to Berger Associates
for the periods indicated and the amount of such fees waived on account of
excess expenses under applicable expense limitations.
-37-
<PAGE>
BERGER NEW GENERATION FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $ 1,229,000 $ 14,000 $ 0 $ 1,243,000
- ---------------------------------------------------------------------------
1997 $ 962,000 $ 20,000 $ 0 $ 982,000
- ---------------------------------------------------------------------------
1996* $ 398,000 $ 4,000 $ (85,000) $ 317,000
- ---------------------------------------------------------------------------
</TABLE>
* Covers period from March 29, 1996 (commencement of operations) through the end
of the Fund's first fiscal year on September 30, 1996.
BERGER SELECT FUND
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998* $143,000 $2,000 $ 0 $145,000
- ---------------------------------------------------------------------------
</TABLE>
* Covers period from December 31, 1997 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
BERGER SMALL COMPANY GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $6,984,000 $ 78,000 $ 0 $7,062,000
- --------------------------------------------------------------------------
1997 $6,831,000 $ 78,000 $ 0 $6,909,000
- --------------------------------------------------------------------------
1996 $5,902,000 $ 66,000 $ 0 $5,968,000
- --------------------------------------------------------------------------
</TABLE>
BERGER SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $ 1,515,000 $17,000 $ 0 $1,532,000
- --------------------------------------------------------------------------
1997*^ $ 418,000 $ 4,000 $ 0 $ 422,000
- --------------------------------------------------------------------------
1996^ $ 325,000 $ 0 $ 0 $ 325,000
- --------------------------------------------------------------------------
</TABLE>
* On February 14, 1997, new fee arrangements came into effect for the Fund with
shareholder approval, at which time Berger Associates became the Fund's advisor
and administrator and PWM, the Fund's former investment advisor, became the
Fund's sub-advisor.
-38-
<PAGE>
Under the Investment Advisory Agreement in effect for the Fund until February
14, 1997, the Fund paid an advisory fee to PWM at an annual rate of 1.00% of the
Fund's average daily net assets. The Fund's fiscal year end was changed from
December 31 to September 30 during 1997. Accordingly, the amount shown for 1996
was paid by the Fund during the fiscal year ended December 31, 1996, and the
amounts shown for 1997 cover the period January 1, 1997, through September 30,
1997.
BERGER MID CAP GROWTH FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998* $20,000 $ 0 $(12,000) $ 8,000
- --------------------------------------------------------------------------
</TABLE>
* Covers period from December 31, 1997 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
BERGER MID CAP VALUE FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998* $20,000 $ 0 $ 0 $20,000
- --------------------------------------------------------------------------
</TABLE>
* Covers period from August 12, 1998 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
BERGER 100 FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $12,939,000 $173,000 $ 0 $13,112,000
- --------------------------------------------------------------------------
1997 $14,424,000 $192,000 $ 0 $14,616,000
- --------------------------------------------------------------------------
1996 $15,767,000 $210,000 $ 0 $15,977,000
- --------------------------------------------------------------------------
</TABLE>
BERGER GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $2,539,000 $ 34,000 $ 0 $2,573,000
- --------------------------------------------------------------------------
1997 $2,442,000 $ 32,000 $ 0 $2,474,000
- --------------------------------------------------------------------------
1996 $2,496,000 $ 33,000 $ 0 $2,529,000
- --------------------------------------------------------------------------
</TABLE>
-39-
<PAGE>
BERGER BALANCED FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Investment Administrative Advisory Fee TOTAL
Ended Advisory Fee Service Fee Waiver
September 30,
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 $168,000 $ 2,000 $(16,000) $154,000
- --------------------------------------------------------------------------
</TABLE>
Each of the Funds has appointed Investors Fiduciary Trust Company
("IFTC"), 801 Pennsylvania, Kansas City, MO 64105, 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 Systems, Inc.
("DST"), P.O. Box 419958, Kansas City, MO 64141, as sub-agent to provide
transfer agency and dividend disbursing services for the Funds. Approximately
41% of the outstanding shares of DST are owned by KCSI.
As recordkeeping and pricing agent, IFTC calculates the daily net
asset value of each Fund 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 $14.00 per
open Fund shareholder account, subject to preset volume discounts, 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.
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.
Earnings credits received by each Fund can be found on the Fund's Statement of
Operations in the Annual Report incorporated by reference into this Statement of
Additional Information.
BERGER/BIAM INTERNATIONAL FUND
The Berger/BIAM International Fund is allocated and bears indirectly
its pro rata share of the aggregate annual operating expenses of the Berger/BIAM
International Portfolio, since all of the investable assets of the Fund are
invested in the Portfolio.
Expenses of the Portfolio include, among others, its pro rata share of
the expenses of Berger/BIAM Worldwide Portfolios Trust, of which the Portfolio
is a series, such as: expenses of registering the Trust with securities
authorities; the compensation of its independent trustees; expenses of preparing
reports to investors and to governmental offices and commissions; expenses of
meetings of investors and trustees of the Trust; legal fees; and insurance
premiums of the Trust. Expenses of the Portfolio also include, among others,
the fees payable to the advisor under the Investment Advisory Agreement;
expenses connected with the execution of portfolio
-40-
<PAGE>
transactions, including brokerage commissions on purchases and sales of
portfolio securities (which are considered a cost of securities of the
Portfolio); custodian fees; auditors' fees; interest and taxes imposed on the
Portfolio; transfer agent, recordkeeping and pricing agent fees; and such other
non-recurring and extraordinary items as may arise from time to time.
Expenses of the Berger/BIAM International Fund include, among others,
its pro rata share of the expenses of the Berger/BIAM Worldwide Funds Trust, of
which the Fund is a series, such as: expenses of registering the Trust with
securities authorities; expenses of meetings of the shareholders of the Trust;
and legal fees. Expenses of the Fund also include, among others, registration
and filing fees incurred in registering shares of the Fund with securities
authorities; 12b-1 fees; taxes imposed on the Fund; the fee payable to the
Advisor under the Administrative Services Agreement; and such other
non-recurring and extraordinary items as may arise from time to time.
SERVICE ARRANGEMENTS FOR THE FUND. Under an Administrative Services
Agreement with the Berger/BIAM International Fund, BBOI Worldwide serves as the
administrator of the Fund. In this capacity, it is responsible for
administering and managing all aspects of the Fund's day-to-day operations,
subject to the oversight of the trustees of the Fund. BBOI Worldwide is
responsible, at its expense, for furnishing (or procuring other parties to
furnish) all administrative services reasonably necessary for the operation of
the Fund, including recordkeeping and pricing services, custodian services,
transfer agency and dividend disbursing services, tax and audit services,
insurance, printing and mailing to shareholders of prospectuses and other
required communications, and certain other administrative and recordkeeping
services, such as coordinating matters relating to the operations of the Fund,
monitoring the Fund's status as a "regulated investment company" under the
Internal Revenue Code, coordinating registration of sufficient Fund shares under
federal and state securities laws, arranging for and supervising the preparation
of registration statements, tax returns, proxy materials, financial statements
and reports for filing with regulatory authorities and distribution to
shareholders of the Fund. Under the Administrative Services Agreement, the Fund
pays BBOI Worldwide a fee at an annual rate equal to the lesser of (i) 0.45% of
its average daily net assets, or (ii) BBOI Worldwide's annual cost to provide or
procure these services (including the fees of any services providers whose
services are procured by BBOI Worldwide), plus an additional 0.02% of the Fund's
average daily net assets. The trustees of the Fund regularly review amounts
paid to and expenditures incurred by BBOI Worldwide pursuant to the
Administrative Services Agreement. In addition, in the event that BBOI
Worldwide's duties under the Administrative Services Agreement are delegated to
another party, BBOI Worldwide may take into account, in calculating the cost of
such services, only the costs incurred by such other party in discharging the
delegated duties.
Under a Sub-Administration Agreement between BBOI Worldwide and Berger
Associates, Berger Associates has been delegated the responsibility to perform
certain of the administrative and recordkeeping services required under the
Administrative Services Agreement and to procure, at BBOI Worldwide's expense,
third parties to provide the services not provided by Berger Associates. Under
the Sub-Administration Agreement, Berger Associates is paid a fee by BBOI
Worldwide of 0.25% of the Fund's average daily net assets for its services.
During certain periods, Berger Associates may voluntarily waive all or a portion
of its fee from BBOI Worldwide, which will not affect the fee paid by the Fund
to BBOI Worldwide under the Administrative Services Agreement.
IFTC has been appointed to provide recordkeeping and pricing services
to the Fund, including calculating the daily net asset value of the Fund, and to
perform certain accounting and recordkeeping functions that it requires. In
addition, IFTC has been appointed to serve as the Fund's custodian, transfer
agent and dividend disbursing agent. IFTC has engaged DST as sub-transfer agent
to provide transfer agency and dividend disbursing services for the Funds. The
fees of Berger Associates, IFTC and DST are all paid by BBOI Worldwide.
Approximately 41% of the
-41-
<PAGE>
outstanding shares of DST are owned by KCSI, which also owns 100% of the
outstanding shares of Berger Associates.
SERVICE ARRANGEMENTS FOR THE PORTFOLIO. Under the Investment Advisory
Agreement between BBOI Worldwide and the Berger/BIAM International Portfolio, in
addition to providing investment advisory services, BBOI Worldwide is
responsible for providing or arranging for all managerial and administrative
services necessary for the operations of the Portfolio. BBOI Worldwide is
responsible for providing certain of these services at its own expense, such as
compliance monitoring and preparing investor communications, which have been
delegated to Berger Associates as part of the Sub-Administration Agreement
discussed above. Other services are procured from third party service providers
at the Portfolio's own expense, such as custody, recordkeeping and pricing
services.
The Portfolio has appointed IFTC as recordkeeping and pricing agent to
calculate the daily net asset value of the Portfolio and to perform certain
accounting and recordkeeping functions required by the Portfolio. In addition,
the Portfolio has appointed IFTC as its custodian and transfer agent. IFTC has
engaged State Street Bank and Trust Company ("State Street"), P.O. Box 351,
Boston, MA 02101, as sub-custodian for the Portfolio. For custodian,
recordkeeping and pricing services, the Portfolio pays fees directly to IFTC
based on a percentage of its net assets, subject to certain minimums, and
reimburses IFTC for certain out-of-pocket expenses.
The following table shows the total dollar amounts of advisory fees
paid by the Portfolio to BBOI Worldwide for the periods indicated and the amount
of such fees waived on account of excess expenses under applicable expense
limitations. The investment advisory fee is paid by the Portfolio and is borne
indirectly pro rata by the Fund and the other mutual funds invested in the
Portfolio.
BERGER/BIAM INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Fiscal Year Ended Investment Advisory Fee TOTAL
September 30, Advisory Fee Waiver
- --------------------------------------------------------------------------
<S> <C> <C> <C>
1998 $1,531,000 $(61,000) $1,470,000
- --------------------------------------------------------------------------
1997* $ 560,000 $(61,000) $ 499,000
- --------------------------------------------------------------------------
</TABLE>
* Covers period from October 11, 1996 (commencement of operations of the
Portfolio) through the end of the Portfolio's first fiscal year on September
30, 1997.
In addition, the Fund paid BBOI Worldwide the following amounts for
its services under the Administrative Services Agreement.
BERGER/BIAM INTERNATIONAL FUND
<TABLE>
<CAPTION>
Fiscal Year Ended September 30, Administrative Service Fee
- --------------------------------------------------------------------------
<S> <C>
1998 $ 85,000
- --------------------------------------------------------------------------
1997* $ 63,000
- --------------------------------------------------------------------------
</TABLE>
* Covers period from November 7, 1996 (commencement of operations of the Fund)
through the end of the Fund's first fiscal year on September 30, 1997.
-42-
<PAGE>
As noted above with respect to the other Berger Funds, all of IFTC's
fees are subject to reduction pursuant to an agreed formula for certain earnings
credits on the cash balances maintained with it as custodian. Earnings credits
received by the Portfolio can be found on the Portfolio's Statement of
Operations in the Annual Report incorporated by reference into this Statement of
Additional Information.
12b-1 PLANS
Each of the Funds 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 0.25% per annum of the Fund's
average daily net assets to finance activities primarily intended to result in
the sale of Fund shares. The Plans are intended to benefit the Funds by
attracting new assets into the Funds and thereby affording potential cost
reductions due to economies of scale.
The expenses paid by Berger Associates may include, but are not
limited to:
- -- payments made to, and costs incurred by, a Fund's principal
underwriter in connection with the distribution of Fund shares,
including payments made to and expenses of officers and registered
representatives of the Distributor;
- -- payments made to and expenses of other 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 Fund shares, including services to
holders of Fund shares and prospective investors;
- -- 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 Fund shares;
- -- costs involved in preparing, printing and distributing sales
literature for Fund shares;
- -- costs involved in obtaining whatever information, analyses and reports
with respect to market and promotional activities on behalf of a Fund
relating to Fund shares that Berger Associates deems advisable;
- -- and such other costs relating to Fund shares as the Fund may from time
to time reasonably deem necessary or appropriate in order to finance
activities primarily intended to result in the sale of Fund shares.
Such 12b-1 fee 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 the Fund by Berger Associates, and if the distribution expenditures incurred
by Berger
-43-
<PAGE>
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 a Fund may engage in activities which jointly
promote the sale of Fund shares 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, a Fund's 12b-1 fees may
be used to finance the joint promotion of the shares of that Fund, along with
the shares of the other fund. Berger Associates allocates the cost of such
joint promotional activity among the funds involved on the basis of their
respective net assets, unless otherwise directed by the directors or trustees.
The current 12b-1 Plans will continue in effect until the end of April
1999, 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. The Plans may not be amended to increase
materially the amount to be spent on distribution of Fund shares without
shareholder approval.
Following are the payments made to Berger Associates pursuant to the
Plans for the fiscal year ended September 30, 1998:
<TABLE>
<CAPTION>
---------------------------------------------------------
FUND 12B-1 PAYMENTS
---------------------------------------------------------
<S> <C>
Berger New Generation Fund $ 341,000
---------------------------------------------------------
Berger Select Fund(1) $ 48,000
---------------------------------------------------------
Berger Small Company Growth Fund $1,026,000(2)
---------------------------------------------------------
Berger Small Cap Value Fund(3) $ 229,000
---------------------------------------------------------
Berger Mid Cap Growth Fund(1) $ 7,000
---------------------------------------------------------
Berger Mid Cap Value Fund(4) $ 7,000
---------------------------------------------------------
Berger 100 Fund $4,313,000
---------------------------------------------------------
Berger/BIAM International Fund $ 47,000
---------------------------------------------------------
Berger Growth and Income Fund $ 846,000
---------------------------------------------------------
Berger Balanced Fund $ 60,000
---------------------------------------------------------
</TABLE>
(1) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998.
(2) Reflects the partial 12b-1 fee waiver that was in effect from November
17, 1997, through May 29, 1998, when the Fund was closed to new investors.
(3) The Berger Small Cap Value Fund has adopted a 12b-1 Plan only with
respect to the Investor Shares, the class of shares of the Fund covered by this
SAI.
(4) Covers the period from August 12, 1998 (commencement of operations)
through September 30, 1998.
OTHER EXPENSE INFORMATION
The directors or trustees of each of the Funds have authorized
portfolio transactions to be placed on an agency basis through DST Securities,
Inc. ("DSTS"), a wholly-
-44-
<PAGE>
owned broker-dealer subsidiary of DST. 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. DSTS may be considered an affiliate of Berger Associates
due to the ownership interest of KCSI in both DSTS and Berger Associates.
The Funds and/or their advisors have entered into arrangements with
certain brokerage firms and other companies(such as recordkeepers and
administrators) to provide administrative services (such as sub-transfer agency,
recordkeeping, shareholder communications, sub-accounting and/or other
services) to investors purchasing shares of the Funds through those firms or
companies. A Fund's advisor or a Fund (if approved by its directors or
trustees) may pay fees to these companies for their services. These companies
may also be appointed as agents for or authorized by the Funds to accept on
their behalf purchase and redemption requests that are received in good order.
Subject to Fund approval, certain of these companies may be authorized to
designate other entities to accept purchase and redemption orders on behalf of
the Funds.
DISTRIBUTOR
The distributor (principal underwriter) of each Fund's shares is
Berger Distributors, Inc. (the "Distributor"), 210 University Boulevard, Suite
900, Denver, CO 80206. The Distributor may be reimbursed by Berger Associates
for its costs in distributing the Funds' shares.
6. BROKERAGE POLICY
Although each Fund retains full control over its own investment
policies, under the terms of its Investment Advisory Agreement, the advisor is
directed to place the portfolio transactions of the Fund. A report on the
placement of brokerage business is given 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:
BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
---------------------------------------------------------------
1998 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BERGER NEW GENERATION FUND $340,000 $165,000 $939,000(1)
- ---------------------------------------------------------------------------------------------------------------------------
BERGER SELECT FUND $536,000(2) N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
BERGER SMALL COMPANY GROWTH FUND $890,000 $1,044,000 $604,000
- ---------------------------------------------------------------------------------------------------------------------------
BERGER SMALL CAP VALUE FUND $567,000 $306,000(3) $307,000(3)
- ---------------------------------------------------------------------------------------------------------------------------
BERGER MID CAP GROWTH FUND $ 15,000(2) N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
BERGER MID CAP VALUE FUND $ 33,000(4) N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
BERGER 100 FUND $9,258,000 $6,671,000 $4,691,000
- ---------------------------------------------------------------------------------------------------------------------------
BERGER/BIAM INTERNATIONAL FUND (5) $225,000 $234,000(5) N/A
- ---------------------------------------------------------------------------------------------------------------------------
BERGER GROWTH AND INCOME FUND $2,397,000 $1,124,000 $769,000
- ---------------------------------------------------------------------------------------------------------------------------
-45-
<PAGE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FOR THE YEAR/PERIOD ENDED SEPTEMBER 30,
---------------------------------------------------------------
1998 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BERGER BALANCED FUND $207,000 N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Covers period from March 29, 1996 (commencement of operations) 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.
(2) Covers period from December 31, 1997 (commencement of operations) through
the end of the Fund's first fiscal year on September 30, 1998.
(3) The Fund's fiscal year end was changed from December 31 to September 30
during 1997. Accordingly, the brokerage commissions shown for 1996 were paid by
the Fund during the fiscal year ended December 31, 1996, and the brokerage
commissions shown for 1997 cover the period January 1, 1997, through September
30, 1997.
(4) Covers period from August 12, 1998 (commencement of operations) through the
end of the Fund's first fiscal year on September 30, 1998.
(5) These are brokerage commissions paid by the Portfolio in which all the
Fund's investable assets are invested. Commissions paid the Portfolio are borne
indirectly pro rata by the Fund and the other mutual funds invested in the
Portfolio. The brokerage commissions shown for 1997 cover the period November
7, 1996 (commencement of Fund operations) through the end of the Portfolio's
first fiscal year on September 30, 1997.
The Investment Advisory Agreement each Fund has with its advisor
authorizes and directs the advisor 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 the advisor 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 the advisor 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 the advisor.
In accordance with this provision of the Agreement, portfolio
brokerage business of each Fund may be placed with brokers who provide useful
brokerage and research services to the advisor or, where applicable, the
sub-advisor. Such services include computerized on-line stock quotation systems
and related data feeds from stock exchanges, computerized trade order entry,
execution and confirmation systems, fundamental and technical analysis data and
software, broker and other third-party equity research, computerized stock
market and business news services, economic research, account performance data
and computer hardware used for the receipt of electronic research services.
These include a service used by the independent directors or trustees of the
Funds in reviewing the Investment Advisory Agreements.
During the fiscal year ended September 30, 1998, of the brokerage
commissions paid by the Funds, the following amounts 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:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
FUND AMOUNT OF TRANSACTIONS AMOUNT OF
COMMISSIONS
- ---------------------------------------------------------------------------
<S> <C> <C>
Berger New Generation Fund $ 13,883,000 $ 39,000
- ---------------------------------------------------------------------------
Berger Select Fund $ 44,296,000 $ 87,000
- ---------------------------------------------------------------------------
-46-
<PAGE>
- ---------------------------------------------------------------------------
Berger Small Company Growth Fund $ 5,478,000 $ 19,000
- ---------------------------------------------------------------------------
Berger Small Cap Value Fund $ 10,279,000 $ 31,000
- ---------------------------------------------------------------------------
Berger Mid Cap Growth Fund $ 981,000 $ 2,000
- ---------------------------------------------------------------------------
Berger Mid Cap Value Fund $ 0 $ 0
- ---------------------------------------------------------------------------
Berger 100 Fund $869,413,000 $1,222,000
- ---------------------------------------------------------------------------
Berger/BIAM International Fund $ 0 $ 0
- ---------------------------------------------------------------------------
Berger Growth and Income Fund $178,843,000 $ 221,000
- ---------------------------------------------------------------------------
Berger Balanced Fund $ 13,873,000 $ 34,000
- ---------------------------------------------------------------------------
</TABLE>
The research services received from brokers are often helpful to the
advisor or sub-advisor 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 the advisor's or
sub-advisor's 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 the advisor or sub-advisor 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 the advisor or sub-advisor in rendering investment
advice to the Funds. Although such research services may be deemed to be of
value to the advisor or sub-advisor, they are not expected to decrease the
expenses that the advisor or sub-advisor would otherwise incur in performing its
investment advisory services for the Funds nor will the advisory fees that are
received by the advisor from the Funds be reduced as a result of the
availability of such research services from brokers.
The directors or trustees of each of the Funds have authorized
portfolio transactions to be placed 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 operating expenses that the Fund would otherwise be obligated
to pay. No portion of the commission is retained by DSTS. DSTS may be
considered an affiliate of Berger Associates due to the ownership interest of
KCSI in both DSTS and Berger Associates.
Included in the brokerage commissions paid by the Funds during the
last three fiscal years, as stated in the preceding Brokerage Commissions table,
are the following amounts paid to DSTS, which served to reduce each Fund's
out-of-pocket expenses as follows:
DSTS COMMISSIONS AND RELATED EXPENSE REDUCTIONS
<TABLE>
<CAPTION>
DSTS Commissions Reduction in DSTS Reduction in DSTS Reduction in
Paid Expenses FYE Commissions Expenses Commissions Expenses
FYE 9/30/98 9/30/98(1) Paid FYE Paid FYE
FYE 9/30/97 9/30/97(1) FYE 9/30/96 9/30/96(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Berger New Generation Fund $2,000(2) $1,500 $ 0 $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
Berger Select Fund $9,000(3) $7,000 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Berger Small Company $ 0 $ 0 $42,000 $31,000 $13,000 $10,000
Growth Fund
- ----------------------------------------------------------------------------------------------------------------------------------
-47-
<PAGE>
- ----------------------------------------------------------------------------------------------------------------------------------
Berger Small Cap Value Fund $ 0 $ 0 $10,000 $7,000 N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Growth Fund $ 0(4) $ 0 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Berger Mid Cap Value Fund $ 0(5) $ 0 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
Berger 100 Fund $390,000(6) $293,000 $527,000 $396,000 $278,000 $209,000
- ----------------------------------------------------------------------------------------------------------------------------------
Berger/BIAM International $ 0 $ 0 $ 0 $ 0 N/A N/A
Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Berger Growth and Income $ 28,000(7) $ 21,000 $35,000 $26,000 $15,000 $11,000
Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Berger Balanced Fund $ 0 $ 0 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------------------------------------------
</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 less than 1% of the aggregate brokerage commissions paid by the
Berger New Generation Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger New Generation Fund.
(3) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998. Constitutes 2% of the aggregate brokerage
commissions paid by the Berger Select Fund and less than 1% of the aggregate
dollar amount of transactions placed by the Berger Select Fund.
(4) Covers the period from December 31, 1997 (commencement of operations)
through September 30, 1998.
(5) Covers the period from August 12, 1998 (commencement of operations) through
September 30, 1998.
(6) Constitutes 4% of the aggregate brokerage commissions paid by the Berger
100 Fund and less than 1% of the aggregate dollar amount of transactions placed
by the Berger 100 Fund.
(7) Constitutes 1% of the aggregate brokerage commissions paid by the Berger
Growth and Income Fund and less than 1% of the aggregate dollar amount of
transactions placed by the Berger Growth and Income Fund.
Under the Investment Advisory Agreement in effect until February 14,
1997, for the Berger Small Cap Value Fund, the Fund's then advisor was permitted
to place the Fund's brokerage with affiliated brokers, subject to adhering to
certain procedures adopted by the trustees and subject to obtaining prompt
execution of orders at the most favorable net price. Of the brokerage
commissions shown on the Brokerage Commissions table above for periods prior to
February 14, 1997, the following amounts were paid by the Fund to PWM, then the
Fund's advisor, now the Fund's sub-advisor, which is also a registered
broker-dealer.
BERGER SMALL CAP VALUE FUND
BROKERAGE COMMISSIONS PAID TO PWM
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
Fiscal Year Ended Fiscal Year Ended
September 30, 1997(1) December 31, 1996
- ---------------------------------------------------------------------
<S> <C>
$ 138,000 $ 307,000
- ---------------------------------------------------------------------
</TABLE>
(1) The Fund's fiscal year end was changed during 1997. Covers the period
January 1, 1997, through February 14, 1997.
On February 14, 1997, new arrangements for the Berger Small Cap Value
Fund came into effect with shareholder approval and since that time, the
trustees have not authorized
-48-
<PAGE>
the Fund's brokerage to be placed with any broker or dealer affiliated with the
advisor or sub-advisor, except through DSTS under the circumstances described
above.
In selecting broker and dealers and in negotiating commissions, the
Funds' advisors and sub-advisors consider a number of factors, including among
others: the advisor's or sub-advisor's knowledge of currently available
negotiated commission rates or prices of securities currently available and
other current transaction costs; the nature of the security being traded; the
size and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the desired timing of the trade; the
activity existing and expected in the market for the particular security;
confidentiality; the quality of the execution, clearance and settlement
services; financial stability of the broker or dealer; the existence of actual
or apparent operational problems of any broker or dealer; and research products
or services provided. The directors or trustees of the Funds have also
authorized sales of shares of the Fund by a broker-dealer and the
recommendations of a broker-dealer to its customers that they purchase Fund
shares to be considered as factors in the selection of broker-dealers to execute
portfolio transactions for the Funds. In addition, the advisor or sub-advisor
may also consider payments made by brokers to a Fund or to other persons on
behalf of a Fund for services provided to the Fund for which it would otherwise
be obligated to pay, such as transfer agency fees. In placing portfolio
business with any such broker or dealer, the advisors and sub-advisors of the
Funds will seek the best execution of each transaction.
During the fiscal year ended September 30, 1998, the Berger Growth and
Income Fund acquired securities of two of the Fund's regular broker-dealers,
Merrill Lynch & Co. and Morgan Stanley Dean Witter & Co. However, as of
September 30, 1998, the Fund did not own any of those securities. Also, during
the fiscal year ended September 30, 1998, the Berger Balanced Fund acquired
securities of Merrill Lynch & Co., one of the Fund's regular broker-dealers. As
of September 30, 1998, the Fund owned Merrill Lynch bonds with an aggregate
value of $1,015,950.
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
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 on-line access, 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 for telephone purchases 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
-49-
<PAGE>
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 apply to an
investor who purchases Fund shares directly from a Fund as described above.
Procedures for purchasing, selling (redeeming) and exchanging Fund
shares by telephone and on-line are described in the Prospectus. The Funds may
terminate or modify those procedures and related requirements at any time,
although shareholders of the Funds will be given notice of any termination or
material modification. Berger Associates may, at its own risk, waive certain
of those procedures and related requirements.
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, Martin Luther
King, Jr. 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.
Net asset value for the Berger Small Cap Value Fund is calculated by
class, and since the Investor Shares and each other class of the Fund has its
own expenses, the per share net asset value of the Fund will vary by class.
Since the Berger/BIAM International Fund invests all of its investable
assets in the Berger/BIAM International Portfolio, the value of the Fund's
investable assets will be equal to the value of its beneficial interest in the
Portfolio. The value of securities held in the Portfolio are determined as
described below for the Funds.
In determining net asset value for each of the Funds, 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 for which quotations are not readily available or are not representative
of market value may be valued at their fair value determined in good faith
pursuant to consistently applied procedures established by the directors or
trustees. Examples would be when events occur that materially affect the value
of a security at a time when the security is not trading or when the securities
are illiquid.
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
-50-
<PAGE>
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 may be valued at their fair 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
This discussion summarizes certain U.S. federal income tax issues
relating to the Funds. As a summary, it is not an exhaustive discussion of all
possible tax ramifications. Accordingly, shareholders are urged to consult with
their tax advisors with respect to their particular tax consequences.
TAX STATUS OF THE FUNDS. If a Fund meets certain investment and
distribution requirements, it will be treated as a "regulated investment
company" (a "RIC") under the Internal Revenue Code and will not be subject to
federal income tax on earnings that it distributes in a timely manner to
shareholders. It also may be subject to an excise tax on undistributed income
if it does not meet certain timing requirements for distributions. Each of the
Funds intends to qualify as a RIC annually and to make timely distributions in
order to avoid income and excise tax liabilities.
TAX ON FUND DISTRIBUTIONS. With certain exceptions provided by law,
the Funds will report annually to the Internal Revenue Service and to each
shareholder information about the tax treatment of the shareholder's
distributions. Dividends paid by a Fund, whether received in cash or reinvested
in additional Fund shares, will be treated as ordinary income to the
shareholders. Distributions of net capital gain, whether received in cash or
reinvested in Fund shares, will be taxable to the shareholders, but the rate of
tax will vary depending upon the Fund's holding periods in the assets whose sale
resulted in the capital gain. Dividends and distributions that are declared in
October, November or December but not distributed until the following January
will be considered to be received by the shareholders on December 31.
In general, net capital gains from assets held by a Fund for more than
12 months will be subject to a maximum tax rate of 20% and net capital gains
from assets held for 12 months or less will be taxed as ordinary income.
Distributions will be subject to these capital gains rates, regardless of how
long a shareholder has held Fund shares.
If a Fund's distributions for a taxable year exceeds its tax earnings
and profits available for distribution, all or a portion of its distributions
may be treated as a return of capital or as capital gains. To the extent a
distribution is treated as a return of capital, a shareholder's basis in his or
her Fund shares will be reduced by that amount.
If a shareholder has elected to receive dividends and/or capital gain
distributions in cash and the U.S. Postal Service is unable to deliver checks to
the shareholder's address of record, or if a shareholder's checks remain
uncashed for six months, the Funds reserve the right to reinvest the amount
distributed in additional Fund shares at the then-current NAV and to convert the
shareholder's distribution option from receiving cash to having all dividend and
other distributions reinvested in additional shares. In addition, no interest
will accrue on amounts represented by uncashed distribution or redemption
checks.
-51-
<PAGE>
TAX ON REDEMPTIONS OF FUND SHARES. Shareholders may be subject to tax
on the redemption of their Fund shares. In general, redemptions may give rise
to a capital gain or loss, the treatment of which will depend on the
shareholder's holding period in the Fund shares. Tax laws may prevent the
deduction of a loss on the sale of Fund shares if the shareholder reinvests in
the Fund shortly before or after the sale giving rise to the loss. Any loss on
the redemption or other sale or exchange of Fund 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.
INCOME FROM FOREIGN SOURCES. Dividends and interest received by the
Funds on foreign securities may give rise to withholding and other taxes imposed
by foreign countries, although these taxes may be reduced by applicable tax
treaties. Foreign taxes will generally be treated as expenses of the Funds,
unless a Fund has more than 50% of its assets invested in foreign corporate
securities at the end of the Fund's taxable year. In that case, shareholders of
the Fund may be able to deduct (as an itemized deduction) or claim a foreign tax
credit for their share of foreign taxes, subject to limitations prescribed in
the tax law.
If a Fund invests in a foreign corporation that is a passive
foreign investment company (a "PFIC"), special rules apply that may affect
the tax treatment of gains from the sale of the stock and may cause a Fund to
incur tax and IRS interest charges. However, the Fund may be eligible to
elect one of two alternative tax treatments with respect to PFIC shares which
would avoid these taxes and charges, but also may affect, among other things,
the amount and character of gain or loss and the timing of the recognition
of income with respect to PFIC shares. Accordingly, the amounts, character and
timing of income distributed to shareholders of a Fund holding PFIC shares may
differ substantially as compared to a fund that did not invest in PFIC shares.
INCOME FROM CERTAIN TRANSACTIONS. Some or all of the Funds'
investments may include transactions that are subject to special tax rules.
Transactions involving foreign currencies may give rise to gain or loss that
could affect a Fund's ability to make ordinary dividend distributions.
Investment in certain financial instruments, such as options, futures contracts
and forward contracts, may require annual recognition of unrealized gains and
losses. Transactions that are treated as "straddles" may affect the character
and/or timing of other gains and losses of the Fund. If a Fund enters into a
transaction (such as a "short sale against the box") that reduces the risk of
loss on an appreciated financial position that it already holds, the entry into
the transaction may constitute a constructive sale and require immediate
recognition of gain.
BACKUP WITHHOLDING. In general, if a shareholder is subject to backup
withholding, a Fund will be required to withhold federal income tax at a rate of
31% from distributions to that shareholder. These payments are creditable
against the shareholder's federal income tax liability.
FOREIGN SHAREHOLDERS. Foreign shareholders of a Fund generally will
be subject to a 30% U.S. withholding tax on dividends paid by a Fund from
ordinary income and short-term capital gain, although the rate may be reduced by
a tax treaty. If a foreign shareholder dies while owning Fund shares, those
shares may be subject to U.S. estate taxes.
TAX STATUS OF THE BERGER/BIAM INTERNATIONAL PORTFOLIO. The
Berger/BIAM International Portfolio, in which the Berger/BIAM International
Fund invests all its investable assets, has in previous years been classified
as a partnership for U.S. federal income tax purposes, and it intends to
retain that classification. The Berger/BIAM International Fund is treated
for various federal tax purposes as owning an allocable share of the
Portfolio's assets and will be allocated a share of the Portfolio's income,
gain and loss.
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
-52-
<PAGE>
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
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.
11. TAX-SHELTERED RETIREMENT PLANS
The Funds offer several tax-qualified retirement plans for
individuals, businesses and non-profit organizations, including a Profit-Sharing
Plan, a Money Purchase Pension Plan, an Individual Retirement Account (IRA), a
Roth IRA and a 403(b) Custodial Account for adoption by employers and
individuals who wish to participate in such Plans. For information on other
types of retirement plans offered by the Funds, please call 1-800-333-1001 or
write to the Funds c/o Berger Associates, P.O. Box 5005, Denver, CO 80217.
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 accumulated 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 employees'
compensation or your 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
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.
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. A
-53-
<PAGE>
participant who is not a 5% owner of the employer may postpone such
distributions to April 1 of the calendar year following the year of retirement.
This exception does not apply to distributions from an individual retirement
account (IRA). 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
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. You should also consult with your tax advisor regarding state
tax law implications of participation in the Plans.
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 are married and you file a joint return, you and your spouse
together may make contributions totaling up to $4,000 to two IRAs (with no more
than $2,000 being contributed to either account) if your joint income is $4,000
or more, even if one spouse has no earned income. If neither you nor your
spouse are active participants in 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, the deductibility of your IRA contributions will be phased out
for federal income tax purposes if your income exceeds specified amounts,
although the income level at which your IRA contributions will no longer be
deductible is higher if only your spouse (but not you) is an active participant.
However, whether your contributions are deductible or not, the income and
capital gains accumulated in 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
for each 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 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.
ROTH IRA
If you are an individual with compensation or earned income, you may
contribute up to the lesser of $2,000 or 100% of your compensation to a Roth
IRA, as long as your income does
-54-
<PAGE>
not exceed a specified income level ($95,000 for single individuals, $150,000
for married individuals filing jointly). A Roth IRA is similar in many respects
to a traditional IRA, as described above. However, the maximum amount you may
contribute to a Roth IRA is phased out between that income level and a maximum
income amount ($110,000 and $160,000, respectively), and you may not make any
contribution at all to a Roth IRA if your income exceeds the maximum income
amount. Also, you can make contributions to a Roth IRA even after you reach age
70-1/2, and you are not required to take distributions from a Roth IRA prior to
your death.
Contributions to a Roth IRA are not deductible for federal income tax
purposes. However, the income and capital gains accumulated in a Roth IRA are
not taxed while held in the IRA, and distributions can be taken tax-free if the
Roth IRA has been established for a minimum of five years and the distribution
is after age 59-1/2, for a first time home purchase, or upon death or
disability.
An individual with an income of less than $100,000 who is not married
filing separately can roll his or her existing IRA into a Roth IRA. However,
the individual must pay taxes on the taxable amount of the traditional IRA
account balance. Individuals who complete the rollover in 1998 will be
permitted to spread the tax liability over a four-year period. After 1996, all
taxes on such a rollover will be due in the year in which the rollover is made.
403(b) CUSTODIAL ACCOUNTS
If you are employed by a public school system or certain federally
tax-exempt 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.
If your employer participates, it 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, and other Internal Revenue Code limits apply.
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 accumulated 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 later of the calendar year in which you attain age 70 1/2 or
the calendar year in which you retire. 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. You should also consult with your tax advisor about state
taxation of your account.
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 for each Fund or
Cash Account Trust Money Market Portfolio in which the participant's account is
invested.
-55-
<PAGE>
In order to receive the necessary materials to create a 403(b)
Custodial Account, please write to the Funds, c/o Berger 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 the 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 available Berger Funds or for
shares of the Money Market Portfolio, the Government Securities Portfolio or the
Tax-Exempt Portfolio of the Berger Cash Account Trust ("Berger CAT Portfolios"),
separately managed, unaffiliated money market funds, without charge, after
receiving a current prospectus of the other Fund or Berger CAT Portfolio. The
exchange privilege with the Berger CAT Portfolios does not constitute an
offering or recommendation of the shares of any such Berger CAT Portfolio by any
of the Funds or Berger Associates. Berger Associates is compensated for
administrative services it performs with respect to the Berger CAT Portfolios.
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 income tax purposes. An exchange
of shares may be made by written request directed to DST Systems, Inc., via
on-line access, 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 Berger CAT Portfolio being acquired in
the exchange are not eligible 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
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
-56-
<PAGE>
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, MONEY, 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 400 Mid-Cap Index,
the Standard & Poor's 600 Small Cap Index, Morgan Stanley Capital International
EAFE (Europe, Australasia, Far East) Index, the Dow Jones World Index, the
Standard & Poor's/BARRA Value Index, the Nasdaq Composite Index or the Lehman
Brothers Intermediate Term Government/Corporate Bond Index, or more
narrowly-based or blended 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 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.
All 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.
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
of return are calculated pursuant to the following formula: P(1 + T) = TO
THE POWER OF n = 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.
PREDECESSOR PERFORMANCE QUOTATIONS
BERGER/BIAM INTERNATIONAL FUND. The Berger/BIAM International
Portfolio (in which all the investable assets of the Berger/BIAM International
Fund are invested) commenced operations upon the transfer to the Portfolio of
assets held in a pooled trust (the "Pool") maintained by Citizens Bank New
Hampshire, for which BIAM had provided day-to-day portfolio management as
sub-advisor since the inception of the Pool. BIAM's bank holding company parent
indirectly owns a 23.5% interest in the parent of Citizens Bank New Hampshire.
The investment objective, policies, limitations, guidelines and strategies of
the Pool were materially equivalent to those of the Berger/BIAM International
Fund and the Portfolio. Assets from the Pool were transferred on October 11,
1996, to a separate "feeder" fund investing in the Portfolio which, in turn,
transferred
-57-
<PAGE>
those assets to the Portfolio in exchange for an interest in the Portfolio. As
a result of this transaction, the investment holdings in the Portfolio were the
same as the investment holdings in the portfolio of the Pool immediately prior
to the transfer, except for the seed capital provided by Berger Associates.
The Pool was not a registered investment company since it was exempt
from registration under the Investment Company Act of 1940 (the "1940 Act").
Since, in a practical sense, the Pool constitutes the "predecessor" of the
Portfolio, the Fund calculates its performance for periods commencing prior to
the transfer of the Pool's assets to the Portfolio by including the Pool's total
return, adjusted at that time to reflect any increase in fees and expenses
applicable in operating the Fund, including the Fund's pro rata share of the
aggregate annual operating expenses, net of fee waivers, of the Portfolio.
Those fees and expenses included 12b-1 fees.
Performance data quoted for the Berger/BIAM International Fund for
periods prior to October 1996 include the performance of the Pool and include
periods before the Fund's and the Portfolio's registration statements became
effective. As noted above, the Pool was not registered under the 1940 Act and
thus was not subject to certain investment restrictions that are imposed on the
Fund and the Portfolio by the 1940 Act. If the Pool had been registered under
the 1940 Act, the Pool's performance might have been adversely affected.
BERGER SMALL CAP VALUE FUND. Shares of the Berger Small Cap Value
Fund had no class designations until February 14, 1997, when all of the
then-existing shares were designated as Institutional Shares and the Fund
commenced offering the Investor Shares covered in this Statement of Additional
Information. Performance data for the Investor Shares include periods prior to
the adoption of class designations on February 14, 1997, and therefore do not
reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares. Total
return of the Investor Shares and other classes of shares of the Fund will be
calculated separately. Because each class of shares is subject to different
expenses, the performance of each class for the same period will differ.
AVERAGE ANNUAL TOTAL RETURNS
The average annual total return for each of the Funds for various
periods ending September 30, 1998, are shown on the following table:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FUND 1-YEAR 3-YEAR 5-YEAR 10-YEAR LIFE OF FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Berger New (13.99)% N/A N/A N/A 12.27%
Generation Fund (since 3/29/96)
- -------------------------------------------------------------------------------
Berger Select Fund N/A N/A N/A N/A 32.60%(1)
(since 12/31/97)
- -------------------------------------------------------------------------------
Berger Small Company (24.70)% 5.18% N/A N/A 11.57%
Growth Fund (since 12/30/93)
- -------------------------------------------------------------------------------
Berger Small Cap (10.98)% 15.35% 15.97% 13.24% 13.88%
Value Fund - (since 10/21/87)(3)
Investor Shares(2)
- -------------------------------------------------------------------------------
Berger Mid Cap N/A N/A N/A N/A 9.30%(1)
Growth Fund (since 12/31/97)
- -------------------------------------------------------------------------------
Berger Mid Cap Value N/A N/A N/A N/A (6.70)%(1)
Fund (since 8/12/98)
- -------------------------------------------------------------------------------
</TABLE>
-58-
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------
FUND 1-YEAR 3-YEAR 5-YEAR 10-YEAR LIFE OF FUND
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
Berger 100 Fund (16.08)% 5.09% 5.79% 16.18% 13.97%
(since 9/30/74)(4)
- -------------------------------------------------------------------------------
Berger/BIAM (8.46)% 5.78% 8.12% N/A 10.77%
International Fund(5) (since 7/31/89)
- -------------------------------------------------------------------------------
Berger Growth and (1.60)% 13.58% 11.45% 14.01% 13.68%
Income Fund (since 9/30/74)(4)
- -------------------------------------------------------------------------------
Berger Balanced Fund 56.77% N/A N/A N/A 56.77%
(since 9/30/97)
- -------------------------------------------------------------------------------
</TABLE>
(1) Not annualized.
(2) Performance data for the Investor Shares include periods prior to the
Fund's adoption of class designations on February 14, 1997, and therefore do not
reflect the 0.25% per year 12b-1 fee applicable to the Investor Shares, which
came into effect on that date.
(3) Covers the period from October 21, 1987 (date of the Fund's first public
offering) through September 30, 1998.
(4) Life of Fund covers the period from September 30, 1974 (immediately prior
to Berger Associates assuming the duties as the investment advisor for those
Funds) through September 30, 1998. 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 performance figures on the table do not reflect the deduction of the 12b-1
fees for the full length of the 10-year and longer periods.
(5) Data for the Berger/BIAM International Fund covering periods prior to
October 11, 1996, reflect the performance of the pool of assets transferred on
that date into the Berger/BIAM International Portfolio in which all of the
Fund's assets are invested, adjusted at that time to reflect any increase in
expenses expected in operating the Fund, including the Fund's pro rata share of
the aggregate annual operating expenses, of the Portfolio net of fee waivers.
14. ADDITIONAL INFORMATION
FUND ORGANIZATION
BERGER 100 FUND AND BERGER GROWTH AND INCOME FUND. 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-", "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 and were
registered as service marks in December 1991. 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 name
"Berger Growth and Income Fund-Registered Trademark-" was registered as a
service mark in August 1998.
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.
BERGER SMALL COMPANY GROWTH FUND, BERGER NEW GENERATION FUND, BERGER
BALANCED FUND, BERGER SELECT FUND, BERGER MID CAP GROWTH FUND AND BERGER MID CAP
VALUE FUND. The Berger Small Company Growth Fund is a separate series
established on August 23, 1993, under the Berger Investment Portfolio Trust, a
Delaware business trust established under the Delaware
-59-
<PAGE>
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 series created under the Berger Investment
Portfolio Trust, established on December 21, 1995. The name "Berger New
Generation Fund-Registered Trademark-" was registered as a service mark in
December 1996. The Berger Balanced Fund was the third series created under the
Berger Investment Portfolio Trust, established on August 22, 1997. The name
"Berger Balanced Fund-Registered Trademark-" was registered as a service mark in
September 1998. The Berger Select Fund and the Berger Mid Cap Growth Fund were
the fourth and fifth series created under the Trust, established on November 13,
1997. The Berger Mid Cap Value Fund was the sixth series created under the
Berger Investment Portfolio Trust, established on May 21, 1998.
The Trust is authorized to issue an unlimited number of shares of
beneficial interest in series or portfolios. Currently, the Funds named above
are the only series established under the Trust, although others may be added in
the future. The Trust is also authorized to establish multiple classes of
shares representing differing interests in an existing or new series. 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.
BERGER/BIAM INTERNATIONAL FUND. The Berger/BIAM Worldwide Funds Trust
is a Delaware business trust organized on May 31, 1996. The Berger/BIAM
International Fund was established on May 31, 1996, as a series of the Trust.
The name "Berger/BIAM International Fund-Registered Trademark-" was registered
as a service mark in September 1998. The Trust is authorized to issue an
unlimited number of shares of beneficial interest in series or portfolios.
Currently, the series comprising the Fund is one of three series established
under the Trust, although others may be added in the future. The Trust is also
authorized to establish multiple classes of shares representing differing
interests in an existing or new series. Shares of the Fund are fully paid and
non-assessable when issued. Each share has a par value of $.01. All shares
issued by the 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.
Berger/BIAM Worldwide Portfolios Trust is also a Delaware business
trust organized on May 31, 1996. The Berger/BIAM International Portfolio (in
which all the investable assets of the Berger/BIAM International Fund are
invested) was established on May 31, 1996, as a series of that Trust. Like the
Berger/BIAM International Fund, the Portfolio is a diversified, open-end
management investment company. The Portfolio commenced operations upon the
transfer to the Portfolio of assets held in a pooled trust. See "Performance
Information -- Predecessor Performance Data -- Berger/BIAM International Fund"
above for additional information on the asset transfer. The Berger/BIAM
Worldwide Portfolios Trust is authorized to sell unlimited interests in series
or portfolios. Interests may be divided into classes. Currently, the series
comprising the Portfolio is the only series established under that Trust,
although others may be added in the future.
Each investor in the Portfolio, including the Fund, is entitled to a
vote in proportion to the amount of its investment in the Portfolio. Whenever
the Fund is requested to vote as an investor in the Portfolio on matters
pertaining to the Portfolio (other than a vote by the Fund to continue the
operation of the Portfolio upon the withdrawal of another investor in the
Portfolio), the Fund will hold a meeting of its shareholders and will cast all
of its votes as an investor in the Portfolio in the same proportion as directed
by the votes of the Fund's shareholders. Fund shareholders who do not vote will
not affect the votes cast by the Fund at the meeting of the Portfolio investors.
The percentage of the votes representing the Fund's shareholders who do not vote
will be voted by the Fund in the same proportion as the Fund's shareholders who
do, in fact, vote.
-60-
<PAGE>
BERGER SMALL CAP VALUE FUND. The Berger Small Cap Value Fund was
originally organized in November 1984 as a Delaware corporation. In May 1990,
the Fund was reorganized from a Delaware corporation into a Massachusetts
business trust known as The Omni Investment Fund. Pursuant to the Fund's
reorganization, the Fund as a series of the Trust assumed all of the assets and
liabilities of the Fund as a Delaware corporation, and Fund shareholders
received shares of the Massachusetts business trust equal both in number and net
asset value to their shares of the Delaware corporation. All references in this
Statement of Additional Information to the Fund and all financial and other
information about the Fund prior to such reorganization are to the Fund as a
Delaware corporation. All references after such reorganization are to the Fund
as a series of the Trust. On February 14, 1997, the name of the Trust was
changed to Berger Omni Investment Trust and the name of the Fund was changed to
the Berger Small Cap Value Fund. The name "Berger Small Cap Value
Fund-Registered Trademark-" was registered as a service mark in September 1998.
The Trust is authorized to issue an indefinite number of shares of
beneficial interest having a par value of $0.01 per share, which may be issued
in any number of series. Currently, the Fund is the only series established
under the Trust, although others may be added in the future. The shares of each
series of the Trust are permitted to be divided into classes. Currently, the
Fund issues two classes of shares, although others may be added in the future.
Under the Fund's Declaration of Trust, each trustee will continue in
office until the termination of the Trust or his or her earlier death,
resignation, incapacity, retirement or removal. Vacancies will be filled by a
majority vote of the remaining trustees, subject to the provisions of the
Investment Company Act of 1940. Shareholders have the power to vote for the
election and removal of trustees, to terminate or reorganize the Trust, to amend
the Declaration of Trust, and on any other matters on which a shareholder vote
is required by the Investment Company Act of 1940, the Declaration of Trust, the
Trust's bylaws or the trustees.
DELAWARE BUSINESS TRUST INFORMATION. Under Delaware law, shareholders
of the Funds organized as series of Delaware Business Trusts will enjoy the same
limitations on personal liability as extended to stockholders of a Delaware
corporation. Further, the Trust Instruments of those Trusts 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 Trusts or any particular series (fund) of the Trusts. 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
Trusts are not entitled to the limitations of liability set forth in Delaware
law or the Trust Instruments and, accordingly, that they may be personally
liable for the obligations of the Trusts.
In order to protect shareholders from such potential liability, the
Trust Instruments require that every written obligation of the Trusts or any
series thereof contain a statement to the effect that such obligation may only
be enforced against the assets of the Trusts or such series. The Trust
Instruments 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 Trusts shall, upon request,
assume the defense of any such claim made against 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 shareholder of the Funds in those Trusts
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be
-61-
<PAGE>
unable to meet its obligations. The Trusts believe that the risk of personal
liability to shareholders of the Fund is therefore remote. The trustees intend
to conduct the operations of the Trusts and the Funds so as to avoid, to the
extent possible, liability of shareholders for liabilities of the Trusts or the
Funds.
MASSACHUSETTS BUSINESS TRUST INFORMATION. Under Massachusetts law,
shareholders of the Berger Small Cap Value Fund could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Declaration of Trust of the Berger Omni Investment Trust, of which
the Fund is a series, disclaims shareholder liability for acts or obligations of
the Fund and requires that notice of such disclaimer be given in each agreement,
obligation, or instrument entered into or executed by the Fund or the trustees.
The Declaration of Trust provides for indemnification out of the property of the
Fund for all loss and expense of any shareholder of the Fund held personally
liable for the obligations of the Fund. Accordingly, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund would be unable to meet its obligations. The
Trust believes that the risk of personal liability to shareholders of the Fund
is therefore remote. The trustees intend to conduct the operations of the Fund
to avoid, to the extent possible, liability of shareholders for liabilities of
the Fund.
CORPORATE GOVERNANCE INFORMATION PERTAINING TO ALL FUNDS. 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 any of the
Trusts so request, a special shareholders' meeting of that Fund or Trust will be
held for the purpose of considering the removal of a director or trustee, 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 any of those Funds or Trusts so
request. Subject to certain limitations, the Funds/Trusts will facilitate
appropriate communications by shareholders desiring to call a special meeting
for the purpose of considering the removal of a director or trustee.
Shareholders of the Funds and, where applicable, the other series of
the same business trust, generally vote separately on matters relating to those
respective series, although they vote together and with the holders of any other
series of the same business trust 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 the Funds have non-cumulative voting rights, which means
that the holders of 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.
Shares of the Funds have no preemptive rights. There are no sinking
funds or arrearage provisions which may affect the rights of the Fund shares.
Fund shares have no subscription rights or conversion rights, except that
shareholders of any class of the Berger Small Cap Value Fund may convert their
shares into shares of any other class of the Fund in the event and only in the
event the shareholder ceases to be eligible to purchase or hold shares of the
original class, or becomes eligible to purchase shares of a different class, by
reason of a change in the shareholder's status under the conditions of
eligibility in effect for such class at that time. 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.
-62-
<PAGE>
MORE INFORMATION ON SPECIAL FUND STRUCTURES
MULTI-CLASS. All of the Funds are permitted to divide their shares
into classes. However, currently, only the Berger Small Cap Value Fund has
divided its shares into classes and has two classes of shares outstanding, the
Investor Shares covered by this SAI and the Institutional Shares offered through
a separate Prospectus and SAI. The Berger Small Cap Value Fund implemented its
multi-class structure by adopting a Rule 18f-3 Plan under the 1940 Act
permitting it to issue its shares in classes. The Fund's Rule 18f-3 Plan
governs such matters as class features, dividends, voting, allocation of income
and expenses between classes, exchange and trustee monitoring of the Plan. Each
class is subject to such investment minimums and other conditions of eligibility
as are set forth in the relevant prospectus for the class, as it may be amended
from time to time. Institutional Shares are designed for institutional,
individual and other investors willing to maintain a higher minimum account
balance, currently set at $100,000. Information concerning Institutional Shares
is available from the Fund at 1-800-706-0539.
Subject to the Trust's Declaration of Trust and any other applicable
provisions, the trustees of the Trust have the authority to create additional
classes, or change existing classes, from time to time, in accordance with Rule
18f-3 under the Act.
MASTER/FEEDER. Unlike other mutual funds that directly acquire and
manage their own portfolios of securities, the Berger/BIAM International Fund
(referred to as a feeder fund) seeks to achieve its investment objective by
investing all of its investable assets in the Berger/BIAM International
Portfolio (referred to as a master fund). This two-tier structure is commonly
known as a master/feeder. The Fund has the same investment objective and
policies as the Portfolio. The Fund will invest only in the Portfolio, and the
Fund's shareholders will therefore acquire only an indirect interest in the
investments of the Portfolio. The master/feeder fund structure is still
relatively new and lacks a substantial history.
In addition to selling a beneficial interest to the Fund, the
Portfolio may sell beneficial interests to other mutual funds or
institutional investors (that is, other feeder funds). Such investors will
invest in the Portfolio on the same terms and conditions and will pay their
proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to issue their shares
at the same public offering price as the Fund due to potential differences in
expense structures. Accordingly, investors in the Fund should be aware that
these differences may result in differences in returns experienced by
investors in the different funds that invest in the Portfolio. Such
differences in returns are common in this type of mutual fund structure and
are also present in other mutual fund structures. Information concerning
other investors in the Portfolio (for example, other feeder funds) is
available from the Fund at 1-800-706-0539. Shareholders willing to maintain
an account balance of not less than $1,000,000 may want to consider the
International Equity Fund (designed for eligible trusts or bank trust
departments) or the Berger/BIAM International CORE Fund, which are both other
feeder funds that, like the Fund, invest all of their investable assets in
the Portfolio.
The investment objective of the Fund may not be changed without the
approval of the Fund's shareholders. The investment objective of the Portfolio
may not be changed without the approval of the investors in the Portfolio,
including the Fund. If the objective of the Portfolio changes and the
shareholders of the Fund do not approve a parallel change in the Fund's
investment objective, the trustees of the Trust will consider other
alternatives, including seeking an alternative investment vehicle or directly
retaining the Fund's own investment advisor.
Smaller funds investing in the Portfolio may be materially affected by
the actions of larger funds investing in the Portfolio. For example, if a
larger fund invests or withdraws from the Portfolio, the remaining funds may
experience lower or higher pro rata operating expenses. Lower returns could
possibly result from a large withdrawal. However, this possibility also exists
for
-63-
<PAGE>
traditionally structured funds which have large or institutional investors.
Also, a fund with a greater pro rata ownership in the Portfolio could have
effective voting control over the operations of the Portfolio.
Whenever the Fund is requested to vote as an investor in the Portfolio
on matters pertaining to the Portfolio (other than a vote by the Fund to
continue the operation of the Portfolio upon the withdrawal of another investor
in the Portfolio), the Fund will hold a meeting of its shareholders and will
cast all of its votes as an investor in the Portfolio in the same proportion as
directed by the votes of the Fund's shareholders. Fund shareholders who do not
vote will not affect the votes cast by the Fund at the meeting of the Portfolio
investors. The percentage of the votes representing the Fund's shareholders who
do not vote will be voted by the Fund in the same proportion as the Fund's
shareholders who do, in fact, vote.
The Fund may withdraw its investment in the Portfolio at any time, if
the trustees of the Trust determine that it is in the best interests of the Fund
to do so. Certain changes in the Portfolio's investment objective, policies and
limitations may require the Fund to withdraw its investment in the Portfolio.
Upon any such withdrawal, the trustees would consider what action might be
taken, including investing the Fund's assets in another pooled investment entity
having the same investment objective and policies as the Fund or retaining an
investment advisor to manage the Fund's assets in accordance with the investment
policies described above with respect to the Portfolio. Any such withdrawal
could result in a distribution in-kind of portfolio securities (as opposed to a
cash distribution) from the Portfolio. If securities are distributed, the Fund
could incur brokerage, tax or other charges in converting the securities to
cash. In addition, a distribution in-kind may adversely affect the liquidity of
the Fund.
The trustees of the Berger/BIAM Worldwide Funds Trust and the
Berger/BIAM Worldwide Portfolios Trust are the same individuals. A majority of
the trustees of each of those Trusts who are not "interested persons" (as
defined in the Investment Company Act of 1940) of either Trust have adopted
written procedures reasonably appropriate to deal with potential conflicts of
interest arising from the fact that the same individuals are trustees of both
Trusts, up to and including creating a new board of trustees for one or the
other of the Trusts.
PRINCIPAL SHAREHOLDERS
Insofar as the management of the Funds is aware, as of November 10,
1998, no person owned, beneficially or of record, more than 5% of the
outstanding shares of any of the Funds, except for the following:
<TABLE>
<CAPTION>
OWNER FUND PERCENTAGE
- ---------------------------------------------------------------------------
<S> <C> <C>
Charles Schwab & Co. Inc. Berger New Generation Fund 17.78%
("Schwab") ------------------------------------------------
101 Montgomery Street Berger Select Fund 42.23%
San Francisco, CA 94104 ------------------------------------------------
Berger Small Company Growth Fund 22.39%
------------------------------------------------
Berger Small Cap Value Fund (Investor 29.67%
Shares)
------------------------------------------------
Berger Mid Cap Growth Fund 22.86%
------------------------------------------------
Berger Mid Cap Value Fund 47.90%
------------------------------------------------
Berger 100 Fund 23.03%
------------------------------------------------
-64-
<PAGE>
- ---------------------------------------------------------------------------
Berger/BIAM International Fund 28.09%
------------------------------------------------
Berger Growth and Income Fund 26.10%
------------------------------------------------
Berger Balanced Fund 27.91%
- ---------------------------------------------------------------------------
National Financial Berger New Generation Fund 6.98%
Services Corporation ------------------------------------------------
("Fidelity") Berger Select Fund 21.29%
82 Devonshire Street, ------------------------------------------------
R20A Berger Mid Cap Growth Fund 9.24%
Boston, MA 02109 ------------------------------------------------
Berger Small Company Growth Fund 7.51%
------------------------------------------------
Berger Small Cap Value Fund (Investor 22.61%
Shares)
------------------------------------------------
Berger Balanced Fund 6.84%
- ---------------------------------------------------------------------------
Donaldson Lufkin & Berger Select Fund 8.24%
Jenrette ("DLJ")
SEC Corp Pershing Division ------------------------------------------------
P.O. Box 2052 Berger Small Cap Value Fund (Investor 12.91%
Jersey City, NJ 07383 Shares)
- ---------------------------------------------------------------------------
Berger Associates, Inc. Berger Mid Cap Growth Fund 11.95%
210 University Blvd.
Denver, CO 80206
- ---------------------------------------------------------------------------
</TABLE>
In addition, Schwab owns of record 23.08%, and Fidelity owns of record
7.76%, of all the outstanding shares of the Berger Investment Portfolio Trust,
of which the Berger New Generation Fund, the Berger Select Fund, the Berger
Small Company Growth Fund, the Berger Mid Cap Growth Fund, the Berger Mid Cap
Value Fund and the Berger Balanced Fund are outstanding series. Schwab also
owns of record 16.82%, Fidelity owns of record 12.82% and DLJ owns of record
7.32%, of all the outstanding shares of the Berger Omni Investment Trust, of
which the Berger Small Cap Value Fund - Investor Share class is one of two
outstanding classes in the only outstanding series.
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.
DISTRIBUTION
Berger Distributors, Inc., as the Funds' Distributor, is the principal
underwriter of all the Funds' shares. The Distributor is a wholly-owned
subsidiary of Berger Associates. The Distributor is a registered broker-dealer
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The Distributor acts as the agent of a
Fund in connection with the sale of the Fund's shares in all states in which the
shares are eligible for sale and in which the Distributor is qualified as a
broker-dealer. David J. Schultz, Chief Financial Officer, Assistant Secretary
and Treasurer of the Distributor, is also Vice President and Treasurer of the
Funds. Janice M. Teague, Vice President and Secretary of the Distributor, is
also Vice President and Secretary of the Funds. Brian Ferrie, Vice President
and Chief Compliance Officer of the Distributor, is also Vice President of the
Funds.
-65-
<PAGE>
Each of the Funds and the Distributor are parties to a Distribution
Agreement that continues through April 1999 or 2000, 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 Investment Company
Act of 1940) of the Fund or the Distributor. The Distribution Agreement is
subject to termination by the Fund or the Distributor on 60 days' prior written
notice, and terminates automatically in the event of its assignment. Under the
Distribution Agreement, the Distributor continuously offers shares of the Funds
and solicits orders to purchase Fund shares at net asset value. The Distributor
is not compensated for its services under the Distribution Agreement, but may be
reimbursed by Berger Associates for its costs in distributing Fund shares.
OTHER INFORMATION
The Funds have each filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement under the Securities Act of 1933, as
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.
Davis, Graham & Stubbs LLP, 370 Seventeenth Street, Denver, Colorado,
acts as counsel to the Funds.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 950 Seventeenth Street, Denver, Colorado,
acted as independent accountants for each of the Funds for the fiscal year ended
September 30, 1998. In that capacity, PricewaterhouseCoopers LLP audited the
financial statements of the Funds referenced below under "Financial Information"
and assisted the Funds in connection with the preparation of their 1998 income
tax returns.
FINANCIAL INFORMATION
The statements of assets and liabilities, including the schedules of
investments at September 30, 1998, and the related statements of operations for
the fiscal year/period ended September 30, 1998, and of changes in net assets
and the financial highlights for the Funds for each of the periods indicated,
and in each case the Report of Independent Accountants thereon dated October 30,
1998, are incorporated by reference into this Statement of Additional
Information from the Annual Report to Shareholders dated September 30, 1998, for
each of the Funds. The 1998 Annual Report for each of the Funds is enclosed
with this Statement of Additional Information. Additional copies of the Annual
Report may be obtained upon request without charge by calling the Funds at
1-800-333-1001.
-66-
<PAGE>
APPENDIX A
HIGH-YIELD/HIGH-RISK SECURITIES
Each of the Funds may invest in convertible securities of any quality,
including unrated securities or securities rated below investment grade (Ba or
lower by Moody's, BB or lower by S&P). However, a Fund will not purchase any
security in default at the time of purchase. None of the Funds will invest more
than 20% of the market value of its assets at the time of purchase in
convertible securities rated below investment grade.
Securities rated below investment grade are subject to greater risk
that adverse changes in the financial condition of their issuers or in general
economic conditions, or an unanticipated rise in interest rates, may impair the
ability of their issuers to make payments of interest and principal or
dividends. The market prices of lower grade 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. In the event of an
unanticipated default, a Fund will experience a reduction in its income and
could expect a decline in the market value of the securities affected. The
prices of these securities may be more volatile and the markets for them may be
less liquid than those for higher-rated securities.
Unrated securities, while not necessarily of lower quality than rated
securities, may not have as broad a market. Unrated securities will be included
in a Fund's percentage limits for investments rated below investment grade,
unless the Fund's advisor deems such securities to be the equivalent of
investment grade. If securities purchased by a Fund are downgraded following
purchase, or if other circumstances cause the Fund to exceed its percentage
limits on assets invested in securities rated below investment grade, the
director 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.
Relying in part on ratings assigned by credit agencies in making
investments will not protect a Fund from the risk that the securities will
decline in value, since credit ratings represent evaluations of the safety of
principal, dividend and/or interest payments, and not the market values of such
securities. Moreover, such ratings may not be changed on a timely basis to
reflect subsequent events.
Although the market for high-yield debt securities has been in
existence for many years and from time to time has experienced economic
downturns, this market has involved a significant increase in the use of
high-yield debt securities to fund highly leverage corporate acquisitions and
restructurings. Past experience may not, therefore, provide an accurate
indication of future performance of the high-yield debt securities market,
particularly during periods of economic recession.
Expenses incurred in recovering an investment in a defaulted security
may adversely affect a Fund's net asset value. Moreover, the reduced liquidity
of the secondary market for such securities may adversely affect the market
price of, and the ability of a Fund to value, particular securities at certain
times, thereby making it difficult to make specific valuation determinations.
-67-
<PAGE>
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.
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.
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
-68-
<PAGE>
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.
-69-
<PAGE>
BERGER 100 FUND
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
The Exhibit Index following the signature pages below is incorporated
herein by reference.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
None.
ITEM 25. 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 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 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
The business of Berger Associates, Inc., the investment adviser of the
Fund, is described in the Prospectus under the heading "Organization of the
Berger Fund Family -- Investment Managers" and in the Statement of Additional
Information in Section 4 which are included in this Registration Statement.
Information relating to the business and other connections of the officers and
directors of Berger Associates (current and for the past two years) is listed in
Schedules A and D of Berger Associates' Form ADV as filed with the Securities
and Exchange Commission (File No. 801-9451, dated November 16, 1998), which
information from such schedules is incorporated herein by reference.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Investment companies for which the Fund's principal underwriter
also acts as principal underwriter, depositor or investment adviser:
The One Hundred Fund, Inc.
C-1
<PAGE>
Berger One Hundred and One Fund, Inc.
Berger Investment Portfolio Trust
- --Berger Small Company Growth Fund
- --Berger New Generation Fund
- --Berger Balanced Fund
- --Berger Select Fund
- --Berger Mid Cap Growth Fund
- --Berger Mid Cap Value Fund
Berger Omni Investment Trust
- --Berger Small Cap Value Fund
Berger Institutional Products Trust
- --Berger IPT - 100 Fund
- --Berger IPT - Growth and Income Fund
- --Berger IPT - Small Company Growth Fund
- --Berger/BIAM IPT - International Fund
Berger/BIAM Worldwide Funds Trust
- --Berger/BIAM International Fund
- --International Equity Fund
- --Berger/BIAM International CORE Fund
(b) For Berger Distributors, Inc.:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Positions and Positions and
Offices with Offices with
Underwriter Registrant
- --------------------------------------------------------------------------------
<S> <C> <C>
David G. Mertens President, CEO and Director None
- --------------------------------------------------------------------------------
David J. Schultz Chief Financial Officer, Vice President and
Assistant Secretary and Treasurer Treasurer
- --------------------------------------------------------------------------------
Brian Ferrie Vice President and Chief Vice President
Compliance Officer
- --------------------------------------------------------------------------------
Mark S. Sunderhuse Director None
- --------------------------------------------------------------------------------
Janice M. Teague Vice President and Secretary Vice President and
Secretary
- --------------------------------------------------------------------------------
</TABLE>
The principal business address of each of the persons in the table
above is 210 University Blvd., Suite 900, Denver, CO 80206.
(c) Not applicable.
ITEM 28. 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;
C-2
<PAGE>
(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"), 801
Pennsylvania, 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 29. MANAGEMENT SERVICES
The Registrant has no management-related service contract which is not
discussed in Parts A and B of this form.
ITEM 30. UNDERTAKINGS
Not applicable.
C-3
<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 and County of Denver, and State of
Colorado, on the 25th day of November, 1998.
THE ONE HUNDRED FUND, INC.
--------------------------
(Registrant)
By Gerard M. Lavin
-------------------------------------------
Name: Gerard M. Lavin
----------------------------------------
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
--------- ----- ----
Gerard M. Lavin President (Principal November 25, 1998
- --------------------------- Executive Officer)
Gerard M. Lavin and Director
David J. Schultz Vice President and November 25, 1998
- --------------------------- Treasurer (Principal
David J. Schultz Financial Officer)
John Paganelli Assistant Treasurer November 25, 1998
- --------------------------- (Principal Accounting
John Paganelli Officer)
/s/ Dennis E. Baldwin Director November 25, 1998
- ---------------------------
Dennis E. Baldwin*
/s/ William M.B. Berger Director November 25, 1998
- ---------------------------
William M.B. Berger*
/s/ Louis R. Bindner Director November 25, 1998
- ---------------------------
Louis R. Bindner*
C-4
<PAGE>
/s/ Katherine A. Cattanach Director November 25, 1998
- ---------------------------
Katherine A. Cattanach*
/s/ Paul R. Knapp Director November 25, 1998
- ---------------------------
Paul R. Knapp*
/s/ Harry T. Lewis, Jr. Director November 25, 1998
- ---------------------------
Harry T. Lewis, Jr.*
/s/ Michael Owen Director November 25, 1998
- ---------------------------
Michael Owen*
/s/ William Sinclaire Director November 25, 1998
- ---------------------------
William Sinclaire*
Gerard M. Lavin
- ---------------------------
*By Gerard M. Lavin
Attorney-in-Fact
C-5
<PAGE>
BERGER 100 FUND
EXHIBIT INDEX
<TABLE>
<CAPTION>
N-1A EDGAR
Exhibit Exhibit
No. No. Name of Exhibit
- ------------- --------- ----------------
<S> <C> <C>
* Exhibit 23(a)-1 EX-99.B23(a)-1 Articles of Incorporation (3/9/66)
* Exhibit 23(a)-2 EX-99.B23(a)-2 Articles of Amendment (10/11/66)
* Exhibit 23(a)-3 EX-99.B23(a)-3 Articles Supplementary (10/24/91)
* Exhibit 23(a)-4 EX-99.B23(a)-4 Articles Supplementary (7/93)
* Exhibit 23(b) EX-99.B23(b) Bylaws (as amended through June 20,
1997)
Exhibit 23(c) Not applicable
* Exhibit 23(d) EX-99.B23(d) Form of Investment Advisory
Agreement
(1) Exhibit 23(e) Form of Distribution Agreement
between the Fund and Berger
Distributors, Inc.
Exhibit 23(f) Not applicable
(2) Exhibit 23(g) Form of Custody Agreement
* Exhibit 23(h)-1 EX-99.B23(h)-1 Form of Amended and Restated
Administrative Services Agreement
* Exhibit 23(h)-2 EX-99.B23(h)-2 Form of Recordkeeping and Pricing
Agent Agreement
* Exhibit 23(h)-3 EX-99.B23(h)-3 Form of Agency Agreement
Exhibit 23(i) Not applicable
Exhibit 23(j) EX-99.B23(j) Consent of PricewaterhouseCoopers
LLP
Exhibit 23(k) Not applicable
Exhibit 23(l) Not applicable
* Exhibit 23(m) EX-99.B23(m) Form of Rule 12b-1 Plan, as amended
* Exhibit 23(n) EX-27 Financial Data Schedule
Exhibit 23(o) Not Applicable
</TABLE>
- ---------------------
* Filed herewith.
Filed previously as indicated below and incorporated herein by reference:
(1) Exhibit 6 from Post-Effective Amendment No. 58 to Registrant's Registration
Statement on Form N-1A filed December 31, 1997.
(2) Exhibit 8 from Post-Effective Amendment No. 54 to Registrant's Registration
Statement on Form N-1A filed November 27, 1995.
C-6
<PAGE>
Exhibit 23(a)-1
THE ONE HUNDRED FUND, INC.
ARTICLES OF INCORPORATION
-------------------------
ARTICLE I
---------
WE, THE UNDERSIGNED, F. Wallace Gage, whose post office address is 1700
Broadway, Denver, Colorado, George M. Hopfenbeck, Jr., whose post office address
is 1200 American National Bank Building, Denver, Colorado, and Robert M.
Jeffers, whose post office address is 1200 American National Bank Building,
Denver, Colorado, each being at least twenty-one years of age, do under and by
virtue of the General Laws of the State of Maryland authorizing the formation of
corporations, associate ourselves as incorporators with the intention of forming
a corporation.
ARTICLE II
----------
The name of this corporation is
THE ONE HUNDRED FUND, INC.
This name is used with the consent of the original sponsor of the corporation.
It is acknowledged that the right to use the words "One Hundred" and variations
thereof in the names of investment companies or other organizations engaged in
activities relating to investments or securities is the property of the sponsor,
and the sponsor is free to cause those words or variations thereof to be used in
the names of other organizations engaged in such activities.
ARTICLE III
-----------
The principal office of the corporation in the State of Maryland is located
in the First National Bank Building, Light and Redwood Streets, City of
Baltimore, and its resident agent is THE CORPORATION TRUST INCORPORATED, a
Maryland corporation whose address is First National Bank Building, Light and
Redwood Streets, Baltimore, Maryland.
ARTICLE IV
----------
The objects and purposes for which the corporation is formed are as
follows:
A. To become, and constitute, an investment company which is an open-end
diversified management company registered under the Investment Company Act of
1940.
<PAGE>
B. To engage in the business of investing and reinvesting, owning and
holding securities of any issuer. As used in these Articles the term
"securities" shall include, but not be limited to, any class or series of stocks
or shares, bonds, debentures, notes or other obligations, and any instruments
evidencing or representing rights to receive such securities, or rights or
interests in such securities, or in any property, funds or other assets. The
term "issuer" shall be deemed to include, but not be limited to, all
corporations, associations, syndicates, persons and firms, public or private,
domestic or foreign, and all governments, governmental subdivisions, authorities
and organizations, domestic or foreign.
C. To purchase, acquire by exchange for its own shares or otherwise,
hold, sell, assign, transfer, negotiate, exchange or otherwise dispose of or
realize upon securities of all types created or issued by any issuer, and while
the holder or owner of any interest in such securities to exercise all rights,
powers and privileges it may have and to do all things necessary and proper to
be done in protecting, managing or enhancing the value of its interest in such
securities, including the right to vote thereon.
D. To issue shares of its capital stock at such times, in such amounts,
and for such considerations per share, which shall not include services, past or
future, as may be determined by its Board of Directors and to acquire by
purchase or otherwise, hold, transfer, cancel, resell or otherwise dispose of
shares of its capital stock, without the consent or further authorization of its
stockholders, in accordance with the applicable law.
E. To carry on all other business and activities related to or arising
out of the pursuit of the purposes recited above, or the exercise of the powers
granted to the corporation by virtue of these Articles or the laws of the State
of Maryland, and to do any or all of such things or to exercise any of its
powers as principal, agent, contractor or trustee, and through any agents,
partnerships, subsidiary corporations or other forms of association or business
organization which it chooses to employ.
F. To have and exercise all powers now or hereafter granted by law,
whether expressed in these Articles, specified in the applicable laws of the
State of Maryland, or otherwise available to it by operation of law or by
reasonable inference from the provisions of these Articles or of any such laws,
including, but not limited to, the following:
1. To enter into, make and perform contracts of every kind for any
lawful purpose, with any person, firm, association or corporation, or with
any legal entity, public or private, having the capacity to contract, and
to furnish appropriate security,
-2-
<PAGE>
guaranties, indemnities, bonds or other undertakings or assurances in doing
so.
2. Except to the extent specifically prohibited by other provisions
of these Articles, to hold, purchase, convey or otherwise acquire, manage
and dispose of, encumber, lease, exchange or deal in any manner with real
or personal property, tangible or intangible, of any kind whatsoever,
whether located within or without the State of Maryland.
3. To acquire the assets and undertake the liabilities of any
person, firm or corporation; to pay for the same in cash, in the stock of
the corporation or otherwise; to conduct in any lawful manner the whole or
any part of any business so acquired and to exercise all the powers
necessary or convenient in and about the conduct and management of such
businesses.
4. To borrow money or pledge the credit of the corporation for any
of the purposes of the corporation and to draw, make, accept, endorse,
discount, execute, issue, sell, pledge or otherwise create and dispose of
appropriate instruments, whether negotiable or non-negotiable, transferable
or non-transferable, and to secure the payment of them in any manner not in
conflict with the provisions of the applicable law and any restrictions
upon the encumbrance of the corporation's assets specifically set forth in
these Articles.
5. To have one or more offices or places of business, and to conduct
any or all of its activities, within or without the State of Maryland.
G. The separate paragraphs of this Article IV shall be construed both as
objects and powers and the specific enumeration of them shall not be construed
to limit or restrict in any manner the general powers conferred on this
corporation by law.
ARTICLE V
---------
A. The total number of shares of stock which this corporation is
authorized to issue is Ten Million (10,000,000) shares of capital stock, all of
one class, of the par value of One Cent ($0.01) each, and of the aggregate par
value of One Hundred Thousand Dollars ($100,000).
B. At every meeting of the stockholders, every holder of the capital
stock of the corporation shall be entitled to one vote for each share of capital
stock standing in his name on the books of the corporation, on the date, fixed
in accordance with
-3-
<PAGE>
the Bylaws, for determination of the persons to be deemed to be the stockholders
entitled to vote at such meeting. The holders of the capital stock shall have
the right to vote in the election for the Board of Directors and on such other
matters as are provided for in the Articles of Incorporation, Bylaws, or by
federal or state law.
Cumulative voting shall not be permitted in connection with the election of
directors of the corporation nor on any other matter.
The presence of the holders of a majority of the shares of common stock of
the corporation outstanding and entitled to vote, whether in person or by proxy,
shall constitute a quorum at any meeting of the stockholders. The stockholders
present at a meeting at which a quorum is not present may, without further
notice, adjourn the meeting until a quorum shall be present. Once the presence
of a quorum has been determined at a meeting of stockholders, a quorum shall be
deemed to be present throughout the meeting until its adjournment, regardless of
the withdrawal of any stockholder or proxy, except that a stockholder who
declares that his presence at the meeting is for the sole purpose of objecting
to the holding of the meeting at the time or for the purpose for which it was
called or is to act, shall not be counted in determining the presence of a
quorum provided such stockholder shall withdraw from the meeting after making
such declaration, and shall not otherwise participate in the meeting either
before or after this time.
Unless otherwise required by the provisions of applicable law or by an
express provision of these Articles or the Bylaws, any action to be taken or
authorized by the vote of the corporation's stockholders shall be effective and
valid if taken or authorized by a majority of the votes cast at a duly
constituted meeting of stockholders.
C. The corporation, when requested so to do in writing by a holder or
holders of the capital stock, shall, within seven (7) days after receipt by the
corporation of such a request and of the certificates representing the shares to
be redeemed duly endorsed and with signatures guaranteed, redeem the stock by
paying to the holder thereof in cash or by check (unless redemption is in kind)
an amount equal to the net asset value per share, as determined in the manner
set forth in Article V, Section E, paragraph 1 hereof, less any applicable
redemption charge which may be imposed by the corporation. Payment for the
redeemed shares may be made in full or in part in securities or other assets of
the corporation, to be selected in the discretion of the corporation and without
regard for any proportional interest which the holder may claim in any
particular security or securities owned by the corporation. The value of
securities owned by the corporation for the purpose of making payment in kind in
the event of redemptions shall be determined in the same manner that is provided
below for the determination of the value
-4-
<PAGE>
of the corporation's assets, using values which would be applicable for the
purpose of determining redemption price at the time of the redemption in kind.
The right of redemption provided for herein may be suspended:
(1) For any period (a) during which the New York Stock Exchange is
closed other than customary weekends and holiday closings, or (b) during
which trading on the New York Stock Exchange is restricted as determined by
the Securities and Exchange Commission;
(2) For any period during which an emergency exists as determined by
the Securities and Exchange Commission, as a result of which (a) disposal
by the corporation of securities owned by it is not reasonably practicable,
or (b) it is not reasonably practicable for the corporation fairly to
determine the value of its net assets; or
(3) For such other periods as the Securities and Exchange Commission
may by order permit for the protection of the security holders of the
Corporation.
D. All shares of the capital stock of the corporation now or hereafter
authorized shall be subject to redemption and redeemable in accordance with the
foregoing provisions, at the redemption price as set forth above. Unless the
purpose for such redemption is otherwise specifically provided by resolution of
the Board of Directors at the time of redemption, all shares so redeemed shall
be deemed to be acquired for retirement in the sense contemplated by Section
33(a) of the General Corporation Law of the State of Maryland, and the number of
the authorized shares of the capital stock of the corporation shall not be
reduced as a result of such redemptions. Shares so redeemed shall have the
status of authorized but unissued shares under these Articles and may be
reissued.
E. For the purpose of these Articles, the net asset value of each share
of the capital stock of the corporation shall be determined by dividing the net
assets of the corporation at that time (i.e., the value of the assets of the
corporation less its liabilities exclusive of capital stock and surplus) by the
number of shares of capital stock then outstanding, subject to the following:
1. For the purpose of determining the net asset value of shares duly
tendered for redemption (as provided in Article V, Section C hereof) such
value shall be determined as of the close of business on the New York Stock
Exchange on the first full business day on which it is open following such
tender, or such other time as may be determined by the Board of Directors.
-5-
<PAGE>
2. For the purpose of issuing capital stock at its net asset value
such value shall be determined as of the close of business on the last
business day on which the New York Stock Exchange was open next preceding
the date on which a subscription for such stock was accepted, or in
accordance with the applicable provisions of the Investment Company Act of
1940 or any other applicable statute, rule or regulation adopted by any
appropriate governmental authority or by any securities exchange or
securities association registered under the Securities Exchange Act of
1934.
3. Should it be necessary to determine the net asset value of the
corporation's shares as of any time other than the close of business at the
New York Stock Exchange on any day, adjustments to net asset value as
otherwise determined pursuant to these Articles may be made pursuant to
authorization and direction by the Board of Directors, so long as they
reasonably reflect material changes in the assets or liabilities of the
corporation, or in the number of its outstanding shares, which may have
taken place since the close of business on the New York Stock Exchange on
the last such business day, including adjustments to reflect material
changes in the value of the corporation's assets.
4. The assets of the corporation shall be deemed to include cash on
hand, on deposit or on call; bills, notes and accounts receivable; shares
of stock, rights to receive stock, bonds, debentures and other securities,
however evidenced, other than its own capital stock; all stock or cash
dividends and distributions to be received but not yet received if declared
to stockholders of record on a date on or before the date as of which the
net asset value is being determined; all interest accrued on any
interest-bearing securities and all other property of every kind including
prepaid expenses.
5. The value of the corporation's assets shall be determined, for
the purpose of calculating the net asset value of its shares, by valuing
securities for which market quotations are readily available at the last
sale price; if such a price is lacking for the trading period immediately
preceding the time of determination, such securities shall be valued at the
mean of the closing bid and asked prices at that time, or in such other
manner as shall be determined by the Board of Directors. With respect to
securities for which quotations are not readily available, or other assets,
value shall be determined in good faith by the
-6-
<PAGE>
Board of Directors. Cash and receivables shall be valued at their face
amount.
6. The liabilities of the corporation, for the purpose of
calculating the net asset value of its shares, shall be deemed to include
bills, notes and accounts payable; all administrative expenses payable or
accrued; contractual obligations for the payment of money or other
considerations, including any unpaid dividend which has been declared with
respect to the corporation's stock and the record date of which falls on or
before the day as of which the net asset value is being determined; all
reserves which have been authorized or approved by the Board of Directors;
and all other liabilities of the corporation of any kind, except the
liabilities which might be said to be represented by outstanding capital
stock and surplus of the corporation.
7. For the purpose of determining the total amount of the
corporation's outstanding stock from time to time, capital stock
surrendered for redemption or accepted for repurchase shall be deemed to be
outstanding through the close of business on the date as of which net asset
value is being determined, and thereafter the redemption or repurchase
price of such shares shall be a liability of the corporation until paid;
when capital stock has been subscribed for, such shares shall be deemed to
be outstanding as of the time of acceptance of such subscription, and the
entry thereof on the books of the corporation, and the net price for such
shares shall thereafter be deemed to be an asset of the corporation for the
purpose of calculating net asset value of the corporation's shares. Stock
to be issued as a part of a plan of merger, consolidation, reorganization
or tax-free exchange shall be deemed to be outstanding for this purpose
only when issued in accordance with such plan.
8. Notwithstanding the express provisions of this Section E, the
Board of Directors is empowered to establish other bases or times, or both,
for determining the net asset value of the shares of the corporation's
stock, or determining the corporation's assets, liabilities or outstanding
stock, for any purpose and in its discretion, subject to the applicable
provisions of the Investment Company Act of 1940 or any other applicable
statute, rule or regulation adopted by any appropriate governmental
authority or by any securities exchange or securities association
registered under the Securities Exchange Act of 1934, and in accordance
with accepted accounting principles.
-7-
<PAGE>
ARTICLE VI
----------
The stockholders shall have no pre-emptive right to subscribe to any
additional issue of stock of the corporation of any class, nor any pre-emptive
right to acquire any other security, option, warrant, or other right to acquire
a security of the corporation, however or whenever issued.
ARTICLE VII
-----------
The number of directors of the corporation shall be seven (7), which number
may be increased or decreased pursuant to the Bylaws of the corporation but
shall never be fixed at less than three (3). The names of the directors who
shall act until the first annual meeting or until their successors are duly
chosen and qualify are: E. R. Bigelow, Samuel Butler, Jr., Robert E. Day,
George B. Fisher, F. Wallace Gage, James B. Kurtz and Michael Owen.
ARTICLE VIII
------------
A. Securities of other issuers having voting rights shall be voted by the
President or any Vice President, or such other officer or officers of the
corporation as may be authorized to do so by the Board of Directors, or may be
voted by a proxy or proxies duly appointed by the President, Vice President or
such other officer or officers so authorized.
B. Subject to the provisions of the Investment Company Act of 1940 as
amended from time to time, any affiliated person (as that term is defined in the
1940 Act) of the corporation may be pecuniarily or otherwise interested in any
contract or transaction of the corporation, and in the absence of fraud no such
contract or transaction shall be deemed invalid or otherwise adversely affected
as a result of such interest, so long as the interest of such person shall be
disclosed to or shall have been known by all the members of the Board of
Directors voting in favor of such contract or transaction at the time of the
action of the Board of Directors authorizing or constituting the participation
of the corporation in such contract or transaction. Any director of the
corporation who has such an interest in such a contract or transaction at such
time may be counted in determining the presence of a quorum at any meeting of
the Board of Directors of the corporation at which action is taken with respect
to any such contract or transaction, and it shall require the affirmative vote
of a majority of all of the Board's disinterested directors to authorize any
such contract or transaction.
-8-
<PAGE>
ARTICLE IX
----------
The corporation is to have perpetual existence.
ARTICLE X
---------
The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
ARTICLE XI
----------
In furtherance and not in limitation of the powers conferred by the laws of
the State of Maryland, the Board of Directors is expressly authorized:
A. To make, alter, amend and repeal Bylaws of the corporation, except
insofar as the Bylaws limit such powers or such actions are inconsistent with
any particular exercise of such powers by the stockholders of the corporation.
B. To set apart a reserve or reserves for any proper purpose and to alter
or abolish any such reserve.
C. By resolution passed by a majority of the whole Board, to designate an
Advisory Board or one or more committees. Each committee shall consist of two
or more directors, and, to the extent provided in the related resolution or in
the Bylaws of the corporation, shall have and may exercise to the extent
permitted by law any or all of the powers of the Board of Directors in the
management of the business and affairs of this corporation.
D. To determine, subject to the Corporation Law of the State of Maryland,
whether and to what extent and in what manner the books and accounts of the
corporation shall be made available to the stockholders for inspection.
E. To sell, lease or exchange all or substantially all of its property
and assets, including its good will and its corporate franchises, upon such
terms and conditions and for such consideration (which may be in whole or in
part shares of stock in, or other securities of, any other corporation or
corporations), when and as authorized by the affirmative vote of the holders of
two-thirds of the stock issued and outstanding having voting power, given at a
stockholders' meeting duly called for that purpose.
This corporation may in its Bylaws confer additional powers upon the Board
of Directors, beyond those expressly conferred upon it by law and by the above
provisions, and all lawful powers of the corporation, unless expressly reserved
to
-9-
<PAGE>
the stockholders by law, by these Articles, or by the Bylaws, shall be deemed to
be lodged in and exercisable by the Board of Directors or pursuant to authority
duly granted by it.
ARTICLE XII
-----------
The corporation may hold meetings of directors and stockholders, have an
office or offices, and keep its books (subject to the provisions of the laws of
the State of Maryland) at any place within or without the State of Maryland.
ARTICLE XIII
------------
The corporation reserves the right to amend, supplement, or repeal any
provision contained in these Articles of Incorporation, or to adopt additional
provisions to become a part of the Articles of Incorporation, in the manner now
or hereafter prescribed by law. All rights conferred on officers, directors and
stockholders are granted subject to this reservation.
The undersigned incorporators, for the purpose of forming a corporation
pursuant to the General Laws of the State of Maryland, do make and file these
Articles of Incorporation, declaring and certifying that the facts stated are
truly set forth, and have executed it this 9th day of March, 1966.
--- ----- -
F. Wallace Gage
F. Wallace Gage
George M. Hopfenbeck, Jr.
George M. Hopfenbeck, Jr.
Robert M. Jeffers
Robert M. Jeffers
-10-
<PAGE>
STATE OF COLORADO )
CITY AND ) ss.
COUNTY OF DENVER )
On this 9th day of March, 1966, personally appeared
--- ----- -
before me, the undersigned notary public for the State and County referred to
above, F. Wallace Gage, George M. Hopfenbeck, Jr. and Robert M. Jeffers, who are
all the subscribing parties to the foregoing Articles of Incorporation, known to
me personally to be such, and severally acknowledged that the foregoing Articles
of Incorporation are their act and deed respectively, and that the facts stated
therein were truly set forth.
My commission expires: July 12, 1969 .
------------------------------
Claire G. Obel
-------------------------------
Notary Public
NOTARY SEAL:
-11-
<PAGE>
Exhibit 23(a)-2
THE ONE HUNDRED FUND, INC.
ARTICLES OF AMENDMENT
THE ONE HUNDRED FUND, INC., (hereinafter referred to as
the Corporation), a Maryland corporation, with its principal
office in the State of Maryland located in the First National
Bank Building, Light and Redwood Streets, City of Baltimore,
hereby certifies to the State Department of Assessments and
Taxation of Maryland that Article V, Section E.5 of the Articles
of Incorporation of the Corporation is hereby amended to read as
follows:
"5. The value of the corporation's assets shall
be determined, for the purpose of calculating the net
asset value of its shares, (1) by valuing securities
listed on the New York Stock Exchange or American Stock
Exchange at the last sale price, or if such a price is
lacking for the trading period immediately preceding
the time of determination, at the mean of the current
bid and asked prices; (2) by valuing other securities
as nearly as possible in the manner described above, if
traded on any other exchange, and if not listed on any
exchange, on the basis of the mean between the bid and
asked over-the-counter quotations, if available; and
(3) by valuing securities for which quotations are not
readily available, or other assets, in such other
manner as shall be determined by the Board of Directors
or at values determined in good faith by the Board of
<PAGE>
Directors. Cash and receivables shall be valued at
their face amount."
The foregoing amendment to the Articles of Incorporation
was duly recommended by the Board of Directors of the Corporation
by unanimous written consent on October 7, 1966, and has been
approved by the stockholders of the Corporation by an affirmative
vote of more than 2/3 of all the votes entitled to be cast
thereon at a meeting duly convened and held on October 11, 1966.
IN WITNESS WHEREOF, THE ONE HUNDRED FUND, INC., has
caused these Articles of Amendment to be signed in its name and
on its behalf by its President and its corporate seal to be
hereunto affixed and attested by its Secretary on October 11,
1966.
THE ONE HUNDRED FUND, INC.
(SEAL) By F. Wallace Gage
--------------------------------------
F. Wallace Gage, President
Attest:
John L. Gragg
- ---------------------------
John L. Gragg, Secretary
-2-
<PAGE>
STATE OF COLORADO )
CITY AND ) ss.
COUNTY OF DENVER )
I hereby certify that on October 11, 1966, before me, a
--
notary public of the State of Colorado in and for the City and
County of Denver, State of Colorado, appeared F. Wallace Gage,
President of The One Hundred Fund, Inc., a Maryland corporation,
and on behalf of said corporation acknowledged the foregoing
Articles of Amendment to be the corporate act of such
corporation; and at the same time personally appeared before me
John L. Gragg and made oath in due form of law that he was
Secretary of the meetings of the Board of Directors and
stockholders of the corporation at which these Articles of
Amendment were approved and that the matters and facts set forth
in said Articles of Amendment with respect to the approval by the
Board of Directors and stockholders of the corporation of the
amendments to the Articles of Incorporation set forth in said
Articles of Amendment are true to the best of his knowledge,
information and belief.
WITNESS, my hand and notarial seal, this 11 day of
--
October, 1966.
My commission expires MY COMMISSION EXPIRES DECEMBER
------------------------------
21, 1969.
- --------
Zeda N. Smith
-----------------------------------
Notary Public
(SEAL)
-3-
<PAGE>
Exhibit 23(a)-3
THE ONE HUNDRED FUND, INC.
ARTICLES SUPPLEMENTARY
The One Hundred Fund, Inc., a Maryland corporation (the "Corporation"),
hereby certifies as follows:
1. The Corporation is authorized to issue a total of Ten Million
(10,000,000) shares of capital stock, all of one class, having a par value of
One Cent ($0.01) per share and an aggregate par value of One Hundred Thousand
Dollars ($100,000.00). Pursuant to resolutions adopted by the Corporation's
Board of Directors on October 24, 1991, the Corporation has been authorized to
issue a total of One Hundred Million (100,000,000) shares of capital stock, all
of one class, having a par value of One Cent ($0.01) per share and an aggregate
par value of One Million Dollars ($1,000,000.00).
2. The Corporation is registered as an open-end company under the
Investment Company Act of 1940.
3. The total number of shares of capital stock that the Corporation has
authority to issue has been increased by its Board of Directors in accordance
with Section 2-105(c) of Title 2 of the Maryland General Corporation Law.
IN WITNESS WHEREOF, The One Hundred Fund, Inc. has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
attested by its Secretary or Assistant Secretary this 24th day of October, 1991.
----
THE ONE HUNDRED FUND, INC.
By: William M. B. Berger
---------------------------
William B. Berger,
President
ATTEST:
Patricia M. Blaha
- ----------------------------------
Patricia M. Blaha, Asst. Secretary
The undersigned, President of The One Hundred Fund, Inc., who executed on
behalf of said Corporation the foregoing Articles Supplementary, of which this
Certificate is made a part, hereby acknowledges, in the name and on behalf of
said Corporation, the foregoing Articles Supplementary to be the corporate act
of said Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein are true in all
material respects, under penalties of perjury.
William M. B. Berger
----------------------------
William B. Berger, President
<PAGE>
Exhibit 23(a)-4
THE ONE HUNDRED FUND, INC.
ARTICLES SUPPLEMENTARY
The One Hundred Fund, Inc., a Maryland corporation (the "Corporation"),
hereby certifies as follows:
1. The Corporation is authorized to issue a total of One Hundred Million
(100,000,000) shares of capital stock, all of one class, having a par value of
One Cent ($0.01) per share and an aggregate par value of One Million Dollars
($1,000,000.00). Pursuant to resolutions adopted by the Corporation's Board of
Directors on April 23, 1993, the Corporation has been authorized to issue a
total of Two Hundred Million (200,000,000) shares of capital stock, all of one
class, having a par value of One Cent ($0.01) per share and an aggregate par
value of Two Million Dollars ($2,000,000.00).
2. The Corporation is registered as an open-end company under the
Investment Company Act of 1940.
3. The total number of shares of capital stock that the Corporation has
authority to issue has been increased by its Board of Directors in accordance
with Section 2-105(c) of Title 2 of the Maryland General Corporation Law.
IN WITNESS WHEREOF, The One Hundred Fund, Inc. has caused these Articles
Supplementary to be signed in its name and on its behalf by its President and
attested by its Vice President and attested to by its Secretary this ____ day of
July, 1993.
THE ONE HUNDRED FUND, INC.
By: Kevin R. Fay
-------------------------------
Vice President
ATTEST:
Patricia M. Blaha
- -------------------
Assistant Secretary
The undersigned, Vice President of The One Hundred Fund, Inc., who executed
on behalf of said Corporation the foregoing Articles Supplementary, of which
this Certificate is made a part, hereby acknowledges, in the name and on behalf
of said Corporation, the foregoing Articles Supplementary to be the corporate
act of said Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein are
true in all material respects, under penalties of perjury.
Kevin R. Fay
----------------------------------
, Vice President
<PAGE>
Exhibit 23(b)
THE ONE HUNDRED FUND, INC.
(DOING BUSINESS AS BERGER 100 FUND)
BYLAWS
(As amended through June 20, 1997)
ARTICLE I
OFFICES
1. The principal office of the corporation in Maryland shall be in the
City of Baltimore, and the name of the resident agent of the corporation in
Maryland is The Corporation Trust Incorporated, located at the First National
Bank Building, Light and Redwood Streets, Baltimore, Maryland.
2. The corporation may also have an office in the City of Denver,
State of Colorado, and also offices at such other places as the Board of
Directors may from time to time designate or the business of the corporation may
require.
ARTICLE II
SEAL
The corporate seal shall have inscribed upon it the name of the
corporation, the year of its organization and the words "CORPORATE SEAL,
MARYLAND".
ARTICLE III
STOCKHOLDERS' MEETINGS
1. All meetings of the stockholders shall be held in the City of
Denver, State of Colorado, at such place as may be fixed from time to time by
the Board of Directors.
2. Unless required by the Investment Company Act of 1940, as amended
(the "Act"), or the Maryland General Corporation Law, annual or other meetings
of the stockholders of the corporation are not required to be held, but may, in
the discretion of the directors, be held notwithstanding the absence of such a
requirement at such time and for such purposes as the Board of Directors may
determine.
3. The holders of a majority of the issued and outstanding stock of
the corporation having voting rights, present in person or represented by valid
proxy, shall be required to constitute a quorum at all meetings of stockholders
except as otherwise provided by law, by the Articles of Incorporation or by
these Bylaws. If a quorum is not present at any meeting of stockholders, the
stockholders who are present or duly represented by proxy at the meeting shall
have the power to adjourn the meeting from time to time, without notice other
than by an announcement at the meeting, until a quorum can be gathered. Any
business may be transacted at an adjourned meeting at which a quorum is present
which might have been transacted at the meeting as originally notified. Once the
presence of a quorum has been determined at a meeting of stockholders, a quorum
shall be deemed to be present throughout the meeting until its adjournment,
regardless of the withdrawal of any stockholder or proxy, except that a
stockholder who declares that his presence at the meeting is for the sole
purpose of objecting to the
<PAGE>
holding of the meeting at the time or for the purpose for which it was called or
is to act shall not be counted in determining the presence of a quorum provided
such stockholder shall withdraw from the meeting after making such declaration,
and shall not otherwise participate in the meeting either before or after this
time.
4. At each meeting of the stockholders every stockholder having the
right to vote shall be entitled to vote in person or by proxy. To be entitled to
recognition, a proxy must be appointed by a written instrument dated not more
than eleven months before the meeting at which the proxy wishes to act, unless
the instrument itself provides for a longer period. Each stockholder shall have
one vote for each share of stock having voting power which is registered in his
name on the books of the corporation. Except where the transfer books of the
corporation have been closed or a date has been fixed as a record date for the
determination of stockholders entitled to notice of, or to vote at, a meeting of
stockholders, as provided in Article XVIII below, the record date for the
determination of stockholders entitled to notice of, or to vote at, a meeting of
stockholders shall be at the close of business on the day on which notice of the
meeting is mailed or the day thirty days before the meeting, whichever is closer
to the date of the meeting. The vote for directors shall be by ballot, but the
question whether the vote upon any other question shall be by ballot, by show of
hands or by other method shall lie within the discretion of the presiding
officer at the meeting. All elections shall be had and all questions decided by
a plurality vote, unless otherwise required by law, by the Articles of
Incorporation or by these Bylaws.
5. Not less than ten days nor more than ninety days before the date of
every stockholders' meeting, the Secretary shall give to each stockholder
entitled to vote at such meeting, written or printed notice stating the time and
place of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, either by mail or by presenting it to
him personally or by leaving it at his residence or usual place of business. If
mailed, such notice shall be deemed to be given when deposited in the United
States mail addressed to the stockholder at his post office address as it
appears on the records of the corporation, with postage thereon prepaid.
6. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the President, and
shall be called by the President or Secretary at the request in writing of a
majority of the Board of Directors, or at the request in writing of stockholders
entitled to not less than twenty-five percent of all the votes entitled to be
cast at such meeting. Such request shall state the purpose or purposes of the
proposed meeting and the matters proposed to be acted thereat.
ARTICLE IV
DIRECTORS
1. The property and business of the corporation shall be managed by a
Board of Directors, seven in number, which number may be increased to no more
than fifteen or decreased to no less than three by a majority of the entire
Board of Directors, but the tenure of office of a director shall not be affected
by any decrease in the number of directors so made by the Board. Directors need
not be stockholders. They shall be elected at a meeting of the stockholders if
such an election is required by the Act or the Maryland General Corporation Law,
except for directors elected to fill any duly created or existing vacancies,
<PAGE>
and each director shall serve until his successor shall be elected and shall
qualify.
2. The directors may hold their meetings and keep the books of the
corporation outside of Maryland, at the office of the corporation at Denver,
Colorado or at such other places as they may from time to time determine.
3. In addition to the powers expressly conferred upon the Board of
Directors by these Bylaws and by the Articles of Incorporation, the Board may
exercise all powers of the corporation and do or cause to be done all such
lawful acts and things as are not directed or required to be exercised or done
by the stockholders according to any applicable statute, to the Articles of
Incorporation, or under these Bylaws.
ARTICLE V
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
1. The Board of Directors may appoint an Executive Committee of two or
more directors. During the intervals between meetings of the Board this
committee shall advise and aid the officers of the corporation in all matters
concerning its interests and the management of its business, and generally
perform such duties and exercise such powers as may be directed or delegated by
the Board of Directors from time to time. The Board may delegate to this
committee authority to exercise any or all of the powers of the Board while the
Board is not in session except the power to declare dividends, to issue stock or
to recommend to stockholders any action requiring stockholders' approval. The
Board may at any time change the members and powers of the Executive Committee,
fill vacancies, and discharge such committee. The Executive Committee shall keep
regular minutes of its proceedings and report them to the Board when required.
The provisions of these Bylaws pertaining to the place, time, notice and
procedures of meetings of the Board of Directors shall also apply to meetings of
the Executive Committee except that only one (1) day's notice of special
meetings of the Executive Committee shall be required.
2. The Board of Directors may also appoint other committees, which
shall in each case consist of two or more members of the Board and shall have
and may exercise such powers as the Board may determine in the resolution
appointing them. A majority of all members of any such committee may determine
its action and fix the time and place of its meetings, unless the Board shall
otherwise provide. The Board may at any time change the members and powers of
any such committee, fill vacancies, and discharge any such committee.
3. In the absence of any member of the Executive Committee or other
committee at a meeting thereof, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a member of the Board of
Directors to act in the place of such absent member.
ARTICLE VI
ADVISORY BOARD
The Board of Directors may establish and appoint an Advisory Board.
This Board shall consist of any number of persons, to be determined by the Board
of Directors, and shall be authorized and directed to meet and confer at such
times and places as the Board of Directors may require, in order to give its
advisory opinions to the Board of Directors on such matters of corporate concern
as may be submitted to it by the Board of
<PAGE>
Directors. Its members shall have no power to vote at meetings of the Board of
Directors, and its action shall in all cases be advisory only. Its members need
not be members of the Board of Directors.
ARTICLE VII
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
1. Directors, as such, shall not receive any stated salary for their
services, but by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of the Board. However, any director may serve the corporation in any
other capacity and receive compensation for so doing.
2. Members of the Executive Committee, the Advisory Board and other
committees may be allowed compensation and reimbursement for expenses for
attending their meetings.
ARTICLE VIII
MEETINGS OF THE BOARD OF DIRECTORS
1. After the acceptance for record of the Articles of Incorporation,
an organization meeting of the Board of Directors named in the charter shall be
held, at the call of a majority thereof, for the purpose of adopting Bylaws,
electing officers and for the transaction of such other business as may come
before the meeting. The directors calling the meeting shall give not less than
three days' notice thereof in writing to each director. Such notice shall state
the time and place of the meeting.
2. Regular meetings of the Board may be held without notice at such
time and place as shall from time to time be determined by the Board.
3. Special meetings of the Board may be called by the President on
three days' notice to each director, either personally, by phone, or by mail or
telegram; special meeting shall be called by the President or Secretary in like
manner and on like notice on the written request of two directors.
4. At all meetings of the Board a majority of the directors then in
office shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by the
Articles of Incorporation or by these Bylaws; provided, however, that when the
number of directors in office is an even number, one-half of the directors shall
be necessary and sufficient to constitute a quorum.
ARTICLE IX
VACANCIES
If the office of any director become vacant for any reason (including
vacancies created by an increase in the name of directors), the directors may,
by a majority vote of the directors then in office, except as otherwise provided
in this section, choose a successor or successors who shall hold office for the
unexpired term which has become vacant. During such time as the corporation may
be a registered investment company subject to the provisions of the Investment
Company Act of 1940, and while the corporation has voting stock outstanding, no
person
<PAGE>
shall serve as a director unless elected to that office by the holders of the
outstanding voting stock of the corporation at an annual or special meeting duly
called for that purpose; except that vacancies occurring between such meetings
may be filled as provided above, if, immediately after filling any such vacancy
in such manner, at least two-thirds of the directors then holding office shall
have been elected by the holders of the outstanding voting securities of the
corporation at an annual or special meeting. In the event that at any time less
than a majority of the directors of the corporation holding office at that time
were so elected by the holders of the outstanding voting securities, the Board
of Directors or President of the corporation shall forthwith cause to be held as
promptly as possible, and in any event within sixty days, a meeting of such
holders for the purpose of electing directors to fill any existing vacancies in
the Board of Directors unless such period shall be duly extended as provided by
law.
ARTICLE X
OFFICERS
1. The officers of the corporation shall be chosen by the directors
and shall be a President, one or more Vice Presidents, a Secretary, and a
Treasurer. Any two or more offices, except those of President and Vice
President, may be held by the same person.
2. The Board of Directors, at its first meeting after each annual
meeting of stockholders, shall choose a President from its own number, and the
other officers specified above, who need not be members of the Board.
3. The Board may appoint such other officers and agents as it shall
deem necessary, who shall hold their offices for such terms and shall exercise
such powers and perform such duties as shall be determined from time to time by
the Board.
4. The compensation of all officers and agents of the corporation
shall be fixed by the Board of Directors.
5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the Board
of Directors may be removed at any time by the affirmative vote of a majority of
the whole Board of Directors.
6. The Board of Directors may fill a vacancy occurring in any office.
ARTICLE XI
THE PRESIDENT
1. The President shall be the chief executive of the corporation; he
shall preside at all meetings of the stockholders and directors; he shall have
general and active management of the business of the corporation, and shall see
that all orders and resolutions of the Board are carried into effect.
2. He shall execute bonds and other contracts requiring a seal, under
the seal of the corporation; shall keep in safe custody the seal of the
corporation and, when authorized by the Board of Directors, affix it to any
instrument requiring it; when so affixed, it shall be attested by the signature
of the Secretary or the Treasurer.
<PAGE>
3. He shall be ex officio a member of all standing committees, and
shall have the general powers and duties of supervision and management usually
vested in the office of President of a corporation.
ARTICLE XII
THE VICE PRESIDENT
The Vice President shall, in the absence or disability of the
President, perform the duties and exercise the powers of the President, and
shall perform such other duties as the Board of Directors shall prescribe.
ARTICLE XIII
THE SECRETARY
The Secretary shall attend all sessions of the Board of Directors and
all meetings of the stockholders and record all votes and the minutes of their
proceedings in books to be kept for that purpose, and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and of the Board of Directors (when
notice is required), and shall perform such other duties as may be prescribed by
the Board of Directors.
ARTICLE XIV
THE TREASURER
1. The Treasurer shall be responsible for the custody of the corporate
funds and securities, shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
moneys, securities and other valuable effects in the name and to the credit of
the corporation, with such depositories or custodians as may be designated by
the Board of Directors.
2. He shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its regular meetings, or
whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the corporation.
3. He shall give the corporation a bond, if required by the Board of
Directors, in a sum and with one or more sureties satisfactory to the Board, for
the faithful performance of the duties of his office, and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
ARTICLE XV
DUTIES OF OFFICERS MAY BE DELEGATED
In the case of absence of any officer of the corporation, or for any
other reason that the Board of Directors may deem sufficient, the Board may
temporarily delegate, by majority vote of the directors then in office, the
powers or duties, or any of them, of such officer to any other officer, or to
any director.
<PAGE>
ARTICLE XVI
CERTIFICATE OF STOCK
The interest of each of the corporation's stockholders may be
evidenced by a certificate or certificates in a form to be determined within the
discretion of the Board of Directors from time to time. Such certificates shall
be numbered and shall be entered in the books of the corporation as they are
issued. They shall exhibit the stockholder's name and the number of shares which
they represent, and shall be signed by the President or a Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer of the corporation, one of which signatures may be a facsimile, and
shall bear the seal of the corporation, which may be a facsimile. No such
certificate shall be valid unless so signed and sealed; provided, however, that
both such signatures may be facsimiles if the certificate is countersigned by a
Transfer Agent appointed pursuant to Article XVII below. The corporation may
institute plans for continuous investments, systematic withdrawals, dividend
reinvestments and similar purposes under which shares may be issued and held in
stockholders' accounts without the issuance of certificates.
ARTICLE XVII
TRANSFERS OF STOCK
1. Transfers of stock shall be made on the books of the corporation
only when effected by the holder of such shares in person or by his duly
authorized attorney or legal representative, upon surrender and cancellation of
the certificate or certificates representing shares to be transferred, duly
endorsed or accompanied by valid instruments of assignment, with such proofs of
the authenticity of signatures as may reasonably be required by the corporation
or any agent of the corporation, except that shares for which certificates have
not been issued, which are issued and outstanding for the account of a
stockholder pursuant to plans instituted by the corporation for continuous
investments, systematic withdrawals, dividend reinvestments or similar purposes,
may be transferred pursuant to proper written instructions from the stockholder
or his duly authorized agent.
2. The Board of Directors may appoint a Transfer Agent and a Registrar
for the certificates representing shares of the corporation's stock, neither of
which may be an employee of the corporation, but both of which may be the same
person, firm or corporation. The Transfer Agent shall maintain at its office a
stockholders' ledger listing the names and addresses of the holders of all
issued shares of the corporation's stock, the number of shares held by each, the
certificate numbers representing such shares, and the date of issue of the
certificates representing such shares. The Registrar shall maintain suitable
records setting forth at all times the total number of shares of each class of
shares which the corporation is authorized to issue, and the total number of
such shares actually issued and outstanding.
ARTICLE XVIII
CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATES
The Board of Directors may fix, in advance, a date as the record date
for the purpose of determining stockholders entitled to notice of, or to vote
at, any meeting of stockholders, or stockholders entitled to receive payment of
any dividend or the allotment of any rights, or in order to make a
<PAGE>
determination of stockholders for any other proper purpose. Such date in any
case shall be not more than ninety days and, in case of a meeting of
stockholders, not less than ten days, prior to the date on which the particular
action, requiring such determination of stockholders, is to be taken. The Board
of Directors may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, twenty days. If the stock transfer
books are closed for the purpose of determining stockholders entitled to notice
of or to vote at a meeting of stockholders, such books shall be closed for at
least ten days immediately preceding such meeting. If no record date is fixed
and the stock transfer books are not closed for the determination of
stockholders, the record date for the determination of stockholders entitled to
notice of, or to vote at, a meeting of stockholders shall be at the close of
business on the day on which notice of the meeting is mailed or the day thirty
days before the meeting, whichever is closer to the date of the meeting, and the
record date for the determination of stockholders entitled to receive payment of
a dividend or an allotment of any rights shall be at the close of business on
the day on which the resolution of the Board of Directors, declaring the
dividend or allotment of rights, is adopted.
ARTICLE XIX
REGISTERED STOCKHOLDERS
The corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share on
the part of any other person, whether or not it shall have received any form of
notice of such claim or interest, except as expressly provided by the law of
Maryland. The holders of record of any shares of stock surrendered for
redemption or accepted by the corporation for repurchase shall remain holders of
record thereof through the close of business on the date as of which the net
asset value for purposes of the redemption or repurchase is determined.
ARTICLE XX
LOST CERTIFICATES
Any person asserting that a certificate of the corporation's stock has
been lost or destroyed may make an affidavit of that fact and advertise it in
the manner required by the Board of Directors, and may, if the directors
require, furnish an indemnity bond running to the corporation in form and with
one or more sureties satisfactory to the Board, in an amount determined by the
Board; if these things are done, an appropriate new certificate may be issued as
a substitute for the one alleged to have been lost or destroyed.
ARTICLE XXI
INSPECTION OF BOOKS
The directors shall determine from time to time, subject to any
applicable statute, whether, when and under what conditions and regulations the
accounts and books of the corporation (except such as may by statute be
specifically open to inspection) or any of them shall be open to the inspection
of the stockholders, and the stockholders' rights in this respect are and shall
be restricted and limited accordingly.
<PAGE>
ARTICLE XXII
CHECKS
All checks or demands for money and notes of the corporation shall be
signed by such officer or officers as the Board of Directors may from time to
time designate.
ARTICLE XXIII
FISCAL YEAR
The fiscal year of the corporation shall be as determined by the Board
of Directors from time to time.
ARTICLE XXIV
DIVIDENDS
1. The directors may declare and pay dividends and other distributions
upon the capital stock of the Corporation at any regular or special meeting of
the Board of Directors. The amount and payment of dividends or distributions and
their form, whether they are in cash, shares of capital stock, or other assets
of the Corporation shall be determined by the Board of Directors. The Board of
Directors may adopt a standing resolution once or more often declaring such
dividends and distributions which shall be paid in amounts to be determined as
prescribed in said resolution. All dividends and other distributions on the
capital stock shall be distributed pro rata to the holders of the capital stock
in proportion to the number of shares held on the record date established for
such payment.
2. The determination of the stockholders entitled to receive payment
of any dividend shall be made in accordance with Article XVIII of these Bylaws.
(Article amended by action of the directors on June 20, 1997.)
ARTICLE XXV
ANNUAL STATEMENT
The President of the corporation shall prepare or cause to be prepared
annually a full and correct statement of the affairs of the corporation,
including a balance sheet and a financial statement of operations for the
preceding fiscal year. Such statement of affairs shall be available at any
annual meeting of stockholders held pursuant to Article III, Section 2, and
shall be placed on file within twenty days thereafter at the corporation's
principal office; PROVIDED, HOWEVER, that if the corporation is not required to
hold an annual meeting of stockholders pursuant to Article III, Section 2, the
annual statement shall be placed on file at the corporation's principal office
within 120 days after the end of the corporation's fiscal year.
ARTICLE XXVI
NOTICES
1. Whenever under the provisions of these Bylaws notice is required to
be given to any director, committee member, officer or stockholder, it shall not
be construed to mean personal notice, but such notice may be given (in addition
to
<PAGE>
methods otherwise specifically provided) in writing, by depositing the same in
the post office or letter box, in a post-paid sealed wrapper, addressed to such
director, committee member, officer or stockholder at such address as appears on
the books of the corporation or, if no other address has been furnished to the
corporation, to such director, committee member, officer or stockholder at the
general post office in the City of Baltimore, Maryland, and such notice shall be
deemed to be given at the time when the same shall be thus mailed.
2. Any director, committee member, officer or stockholder may waive,
before, at, or after the meeting, any notice required to be given by law, by the
Articles of Incorporation, or by these Bylaws. No notice of the time, place or
purpose of any meeting of any kind need be given to any person who attends such
meeting in person, or to any stockholder who attends such meeting by proxy.
ARTICLE XXVII
MISCELLANEOUS
The provisions of this Article XXVII of these Bylaws shall not be
subject to amendment or repeal by the Board of Directors, but shall be subject
to amendment only by vote of the stockholders of the corporation, acting by
affirmative vote of a majority of the shares represented at any duly called
meeting at which a quorum shall be not less than 50% of the outstanding shares.
1. INVESTMENT ADVISER AGREEMENT. The corporation may enter into a
contract or contracts with any persons, firms or corporations, providing for the
furnishing to the corporation of investment advice, subject to the control and
direction of the Board of Directors of the corporation. Any such contract must
provide that it cannot be amended without the affirmative vote or written
consent of the holders of a majority of the shares of the corporation.
2. DISTRIBUTION AGREEMENT. The corporation may also contract with any
persons, firms or corporations, which may be the same persons, firms or
corporations furnishing services pursuant to the contract or contracts described
under paragraph 1 above, under which such persons, firms or corporations
undertake to act as agents for the distribution of the shares of the
corporation, or to act as distributors of such shares as principals buying from
the corporation and making resales for their own accounts, subject to the
applicable state and federal securities laws and regulations and the orders of
the Securities and Exchange Commission outstanding from time to time. Any such
contract or contracts shall restrict the maximum sales charge or commission to
be charged upon the sale of the corporation's shares at not to exceed 9% of the
"offering price to the public." This term shall mean the per share net asset
value of the corporation's shares, plus the commission or sales charge adjusted
to the nearest full cent.
3. PURCHASES BY AFFILIATES. The contracts referred to in paragraphs 1
and 2 above shall prohibit the investment adviser and distributor and their
officers and directors from taking long or short positions in the shares of the
corporation's capital stock, except where the distributor purchases stock on the
basis of purchase orders received by it from other persons, or where the
distributor is maintaining a market for the stock in the capacity of agent for
the corporation, or where the investment adviser, the distributor or their
officers or directors purchase stock at the current price available to the
public, or at such price with reductions in the sales charge permitted pursuant
to Section 22(d) of the Investment Company Act of 1940.
<PAGE>
4. (Repealed by action of the shareholders on April 29, 1975; ratified
December 30, 1975.)
5. INDEPENDENT PUBLIC ACCOUNTANTS. The firm of independent public
accountants which shall sign or certify the financial statements of the
corporation which are filed with the Securities and Exchange Commission shall be
selected annually by the Board of Directors and ratified by the stockholders to
the extent required by applicable provisions of the Investment Company Act of
1940, as amended, and the rules thereunder.
6. CUSTODY OF THE CORPORATION'S CASH AND SECURITIES. All securities
owned by the corporation, and all of its cash representing proceeds from sales
of securities owned by the corporation and of shares issued by the corporation,
payments of principal upon securities owned by the corporation or capital
distributions in respect of shares owned by the corporation, along with other
cash includable in the per share net asset value of the corporation as defined
in its Articles of Incorporation, shall be held by a custodian which shall be a
bank or trust company having not less than $500,000 aggregate capital, surplus
and undivided profits. Any agreement providing for such custody shall permit the
custodian to make delivery of the securities deposited subject to such agreement
only upon the sale of such securities for the account of the corporation and the
receipt of payment therefor by the custodian or upon such securities being
called, redeemed, retired or otherwise payable; and the custodian shall be
permitted to make delivery of the funds deposited subject to such agreement only
upon the purchase of securities for the portfolio of the corporation and the
delivery of such securities to the custodian; provided, that such limitations
shall not prevent:
(a) the delivery of funds or securities upon the termination
of such custody agreement or upon the resignation or inability to serve of the
custodian;
(b) the delivery of securities for examination to the broker
selling the same in accord with "street delivery" custom whereby such securities
are delivered to such broker in exchange for a delivery receipt exchanged on the
same day for an uncertified check of such broker to be presented on the same day
for certification;
(c) the delivery of securities of an issuer in exchange for
or conversion into other securities alone or cash and other securities pursuant
to any plan of merger, consolidation, reorganization, recapitalization or
readjustment of the securities of such issuer;
(d) the conversion of securities pursuant to the provisions
of such securities into other securities;
(e) the surrender of warrants, rights or similar securities
in the exercise of such warrants, rights or similar securities or the surrender
of interim receipts or temporary securities for definitive securities;
(f) the delivery of securities as a redemption in kind of
securities issued by the corporation;
(g) the release of funds for redemption or repurchase of
shares issued by the corporation, for payment of interest, dividend
disbursement, taxes, management or custodianship fees, fees payable to the
distributor of its shares for services as such, for payments in connection with
the conversion, exchange or surrender of set forth in subparagraphs (c), (d) and
(e), above, for operating expenses of the corporation, and pursuant to proper
corporate authorizations for other proper corporate purposes.
<PAGE>
Such a custodian shall be required to hold the securities and funds of
the corporation in a separate account or accounts, and to deliver securities or
make payments out of any such accounts only pursuant to written instructions
from two or more persons duly authorized by the Board of Directors of the
corporation to give such instructions.
Upon the resignation or inability to serve of the custodian, the
corporation shall (a) use its best efforts to obtain a successor custodian, (b)
require that the cash and securities owned by the corporation be delivered
directly to the successor custodian, and (c) in the event that no successor
custodian can be found, submit to its stockholders, before permitting delivery
of the cash and securities owned by the corporation to other than a successor
custodian, the question of whether such corporation shall be liquidated or shall
function without a custodian. Nothing contained in this paragraph shall prevent
the termination of any such custody agreement by vote of a majority of all of
the shares of the capital stock of the corporation outstanding and entitled to
vote, or otherwise in accordance with the terms of such agreement and not
inconsistent with any specific provision set forth above.
7. INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. Each
director, officer or employee (and his heirs, executors and administrators)
shall be indemnified by the corporation against all liability and expense
incurred by reason of the fact that he is or was a director, officer or employee
of the corporation, to the full extent and in any manner permitted by Maryland
law, as in effect at any time. Reasonable expenses incurred by each such
director, officer or employee may be paid by the corporation in advance of the
final disposition of any proceeding to which such person is a party, to the full
extent and under the circumstances permitted by Maryland law. The corporation
may purchase and maintain insurance on behalf of any person who is or was a
director, officer or employee of the corporation against any liability asserted
against and incurred by such person in any such capacity or arising out of such
person's position, whether or not the corporation would have the power to
indemnify against such liability under the provisions of this Article XXVII,
Section 7. Nothing in this Article XXVII, Section 7, shall be construed to
permit indemnification or payment of reasonable expenses in advance of final
disposition under circumstances which would violate Section 17(h) of the
Investment Company Act of 1940, as amended.
8. CAPITAL GAIN DISTRIBUTIONS. Whenever the corporation shall pay
dividends to its stockholders out of gain realized from the sale or exchange of
capital assets, such fact shall be clearly revealed to the stockholders in a
written statement which shall include the basis for the calculation.
ARTICLE XXVIII
AMENDMENTS
These Bylaws may be supplemented, amended or repealed by the
stockholders of the corporation. Except for articles over which, by their own
terms, the Board of Directors shall have no such powers, these Bylaws may also
be supplemented, amended or repealed by the Board of Directors in a manner not
inconsistent with any such action previously taken by the stockholders. This
Article XXVIII shall not be subject to repeal or amendment by the Board of
Directors.
<PAGE>
Exhibit 23(d)
INVESTMENT ADVISORY AGREEMENT
THE ONE HUNDRED FUND, INC.
THIS INVESTMENT ADVISORY AGREEMENT (the "Agreement") is made this ____ day
of ________, 1994, between BERGER ASSOCIATES, INC., a Delaware corporation
("Berger Associates"), and THE ONE HUNDRED FUND, INC., a Maryland corporation
(the "Fund").
W I T N E S E T H:
-------------------
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and has registered it shares for public offering under the Securities Act of
1933, as amended (the "1933 Act"); and
WHEREAS, the Fund and Berger Associates deem it mutually advantageous that
Berger Associates should assist the directors and officers of the Fund in the
management of the securities portfolio of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. Management Functions. In addition to the expenses
--------------------
which Berger Associates may incur in the performance of its investment advisory
functions under this Agreement, and the expenses which it may expressly
undertake to incur and pay under other agreements with the Fund or otherwise,
Berger Associates shall incur and pay the following expenses relating to the
Fund's operations without reimbursement from the Fund:
(a) Reasonable compensation, fees and related expenses of the Fund's
officers and its directors (the "Directors"), except for such
Directors who are not interested persons of Berger Associates;
(b) Rental of offices of the Fund; and
(c) All expenses of promoting the sale of shares of the Fund, other than
expenses incurred in complying with federal and state laws and the law
of any foreign country or territory or other jurisdiction applicable
to the issue, offer or sale of shares of the Fund including without
limitation registration fees and costs, the costs of preparing the
registration statement relating to the Fund and amendments thereto,
and the costs and expenses of preparing, printing, and mailing
prospectuses (and statements of additional information) to persons
other than shareholders of the Fund.
<PAGE>
2. Investment Advisory Functions. In its capacity as
-----------------------------
investment adviser to the Fund, Berger Associates shall have the following
responsibilities:
(a) To furnish continuous advice and recommendations to the Fund as to the
acquisition, holding or disposition of any or all of the securities or
other assets which the Fund may own or contemplate acquiring from time
to time, giving due consideration to the investment policies and
restrictions and the other statements concerning the Fund in the
Fund's Articles of Incorporation, Bylaws, and registration statements
under the 1940 Act and the 1933 Act, and to the provisions of the
Internal Revenue Code, as amended from time to time, applicable to the
Fund as a regulated investment company;
(b) To cause its officers to attend meetings and furnish oral or written
reports, as the Fund may reasonably require, in order to keep the
Directors and appropriate officers of the Fund fully informed as to
the condition of the investment portfolio of the Fund, the investment
recommendations of Berger Associates, and the investment
considerations which have given rise to those recommendations; and
(c) To supervise the purchase and sale of securities as directed by the
appropriate officers of the Fund.
3. Obligations of Fund. The Fund shall have the following obligations
-------------------
under this Agreement:
(a) To keep Berger Associates continuously and fully informed as to the
composition of the investment portfolio of the Fund and the nature of
all of the Fund's assets and liabilities from time to time;
(b) To furnish Berger Associates with a certified copy of any financial
statement or report prepared for the Fund by certified or independent
public accountants and with copies of any financial statements or
reports made to the Fund's shareholders or to any governmental body or
securities exchange;
(c) To furnish Berger Associates with any further materials or information
which Berger Associates may reasonably request to enable it to perform
its function under this Agreement; and
-2-
<PAGE>
(d) To compensate Berger Associates for its services and reimburse Berger
Associates for its expenses incurred hereunder in accordance with the
provisions of paragraph 4 hereof.
4. Compensation. The Fund shall pay to Berger Associates for its
------------
services under this Agreement a monthly fee, payable on the last day of each
month during which or part of which this Agreement is in effect, of 1/12 of .75%
of the average daily closing net asset value of the Fund for such month. For
the month during which this Agreement becomes effective and the month during
which it terminates, however, there shall be an appropriate proration of the fee
payable for such month based on the number of calendar days of such month during
which this Agreement is effective.
5. Expenses Paid by the Fund. The Fund assumes and shall pay all
-------------------------
expenses incidental to its operations and business not specifically assumed or
agreed to be paid by Berger Associates pursuant to Section 1 hereof, including,
but not limited to, investment adviser fees; any compensation, fees or
reimbursements which the Fund pays to its Directors who are not interested
persons of Berger Associates; compensation of the Fund's custodian, transfer
agent, registrar and dividend disbursing agent; legal, accounting, audit and
printing expenses; administrative, clerical, recordkeeping and bookkeeping
expenses; brokerage commissions and all other expenses in connection with
execution of portfolio transactions (including any appropriate commissions paid
to Berger Associates or its affiliates for effecting exchange listed,
over-the-counter or other securities transactions); interest; all federal, state
and local taxes (including stamp, excise, income and franchise taxes); costs of
stock certificates and expenses of delivering such certificates to the
purchasers thereof; expenses of local representation in Maryland; expenses of
shareholders' meetings and of preparing, printing and distributing proxy
statements, notices, and reports to shareholders; expenses of preparing and
filing reports and tax returns with federal and state regulatory authorities;
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 the registration or
qualification of shares of the Fund for sale in any jurisdiction, the costs of
portfolio pricing services and systems for compliance with blue sky laws, and
all costs involved in preparing, printing and mailing prospectuses and
statements of additional information of the Fund; and all fees, dues and other
expenses incurred by the Fund in connection with the membership of the Fund in
any trade association or other investment company organization. To the extent
that Berger Associates shall perform any of the above described administrative
and clerical functions, including transfer agency, registry, dividend
disbursing, recordkeeping, bookkeeping, accounting and blue sky monitoring and
registration functions, and the preparation of reports and returns, the Fund
-3-
<PAGE>
shall pay to Berger Associates compensation for, or reimburse Berger Associates
for its expenses incurred in connection with, such services as Berger Associates
and the Fund shall agree from time to time, any other provision of this
Agreement notwithstanding.
6. Treatment of Investment Advice. The Fund shall treat the investment
------------------------------
advice and recommendations of Berger Associates as being advisory only, and
shall retain full control over its own investment policies. However, the
Directors may delegate to the appropriate officers of the Fund, or to a
committee of the Directors, the power to authorize purchases, sales or other
actions affecting the portfolio of the Fund in the interim between meetings of
the Directors.
7. Brokerage Commissions. For purposes of this Agreement, brokerage
---------------------
commissions paid by the Fund upon the purchase or sale of its portfolio
securities shall be considered a cost of securities of the Fund and shall be
paid by the Fund. Berger Associates is authorized and directed to place Fund
portfolio transactions only with brokers and dealers who render satisfactory
service in the execution of orders at the most favorable prices and at
reasonable commission rates, provided, however, that Berger Associates may pay a
broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of 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 or dealer viewed in
terms of either that particular transaction or the overall responsibilities of
Berger Associates. Berger Associates is also authorized to consider sales of
Fund shares as a factor in selecting broker-dealers to execute Fund portfolio
transactions. In placing portfolio business with such broker-dealers, Berger
Associates shall seek the best execution of each transaction. Subject to the
terms of this Agreement and the applicable requirements and provisions of the
law, including the Investment Company Act of 1940 and the Securities Exchange
Act of 1934, as amended, and in the event that Berger Associates or an affiliate
is registered as a broker-dealer, Berger Associates may select a broker or
dealer with which it or the Fund is affiliated. Berger Associates or such
affiliated broker-dealer may effect or execute Fund portfolio transactions,
whether on a securities exchange or in the over-the-counter market, and receive
separate compensation from the Fund therefor. Notwithstanding the foregoing,
the Fund shall retain the right to direct the placement of all portfolio
transactions, and the Directors of the Fund may establish policies or guidelines
to be followed by Berger Associates in placing portfolio transactions for the
Fund pursuant to the foregoing provisions. Berger Associates shall report on
the placement of portfolio transactions in the prior fiscal quarter at each
quarterly meeting of such Directors.
-4-
<PAGE>
8. Termination. This Agreement may be terminated at any time, without
-----------
penalty, by the Directors of the Fund, or by the shareholders of the Fund acting
by vote of at least a majority of its outstanding voting securities, provided in
either case that sixty (60) days' advance written notice of termination be given
to Berger Associates at its principal place of business. This Agreement may be
terminated by Berger Associates at any time, without penalty, by giving sixty
(60) days' advance written notice of termination to the Fund, addressed to its
principal place of business.
9. Assignment. This Agreement shall terminate automatically in the event
----------
of any assignment of this Agreement.
10. Term. This Agreement shall continue in effect until the last day of
----
April, 1995, unless sooner terminated in accordance with its terms, and shall
continue in effect from year to year thereafter only so long as such continuance
is specifically approved at least annually by the vote of a majority of the
Directors of the Fund who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on the
approval of the terms of such renewal, and by either the Directors of the Fund
or the affirmative vote of a majority of the outstanding voting securities of
the Fund. The annual approvals provided for herein shall be effective to
continue this Agreement from year to year if given within a period beginning not
more than sixty (60) days prior to the last day of April of each applicable
year, notwithstanding the fact that more than three hundred sixty-five (365)
days may have elapsed since the date on which such approval was last given.
11. Amendments. This Agreement may be amended by the parties only if such
----------
amendment is specifically approved (i) by a majority of the Directors, including
a majority of the Directors who are not interested persons of Berger Associates
and, if required by applicable law, (ii) by the affirmative vote of a majority
of the outstanding voting securities of the Fund.
12. Allocation of Expenses. The Directors shall determine the basis for
----------------------
making an appropriate allocation of the Fund's expenses (other than those
directly attributable to the Fund) between the Fund and any other series of the
Fund and between the Fund and other investment companies managed by Berger
Associates.
13. Activities of Berger Associates. The services of Berger Associates to
-------------------------------
the Fund hereunder are not to be deemed to be exclusive, and Berger Associates
and its affiliates are free to render services to other parties. It is
understood that Directors, officers and shareholders of the Fund are or may
become interested in Berger Associates as directors, officers and shareholders
of Berger Associates, that directors, officers, employees and shareholders of
Berger Associates are or may become
-5-
<PAGE>
similarly interested in the Fund, and that Berger Associates may become
interested in the Fund as a shareholder or otherwise.
14. Certain Definitions. The terms "vote of a majority of the outstanding
-------------------
voting securities", "assignment" and "interested persons" when used herein,
shall have the respective meanings specified in the 1940 Act, as now in effect
or hereafter amended, and the rules and regulations thereunder, subject to such
orders, exemptions and interpretations as may be issued by the Securities and
Exchange Commission under said Act and as may be then in effect.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers
to execute this Investment Advisory Agreement as of the date and year first
above written.
BERGER ASSOCIATES, INC.
By
---------------------------------
THE ONE HUNDRED FUND, INC.
By
---------------------------------
-6-
<PAGE>
Exhibit 23(h)-1
AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
This Amended and Restated Administrative Services Agreement (the
"Agreement") is entered into effective as of October 1, 1992 by The One Hundred
Fund, Inc. (the "Fund") and Berger Associates, Inc. ("Berger Associates").
RECITALS
A. Pursuant to the terms of the Administrative Services Agreement (the
"Old Agreement"), dated as of February 2, 1987, Berger Associates furnishes
administrative and record keeping services to the Fund.
B. In accordance with Paragraph 5 of the Old Agreement, each of the
parties to the Old Agreement now desires to amend the Old Agreement to delete
certain pricing and record keeping services from the Old Agreement and adjust
the fees paid by the Fund for services as provided herein, and to restate the
Old Agreement as so amended.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Berger Associates shall perform all administrative and record keeping
services (excluding transfer agent, dividend disbursing agent and related
shareholder services) for the Fund not otherwise provided for and described in
the Recordkeeping and Pricing Agent Agreement between the Fund and Investors
Fiduciary Trust Company ("IFTC"), dated October 1, 1992 (the "IFTC Agreement"),
including the preparation of financial statements and reports to be filed with
the Securities and Exchange Commission and state regulatory authorities, and the
maintenance and preservation of all such statements and reports, and any
supporting documentation as may be required by the Investment Company Act of
1940 and other applicable federal and state laws and regulations. It is
understood that the services to be performed by Berger Associates hereunder
shall be substantially the same as those administrative and record keeping
services Berger Associates has been obligated to perform for the Fund from
December 15, 1978 to the date of this Agreement, with the exception of the
record keeping agent and pricing agent services to be performed by IFTC pursuant
to the IFTC Agreement, which services shall no longer be performed by Berger
Associates.
2. The Fund shall pay to Berger Associates a monthly fee for performing
such services, payable on the last day of each month during all or part of which
this Agreement is in effect, of
<PAGE>
one-twelfth (1/12) of one one-hundredth of one percent (.01%) of the average
daily closing net assets of the Fund for such month.
3. In performing the services described in paragraph 1, Berger Associates
shall at all times comply with the applicable provisions of the Investment
Company Act of 1940 and any other federal or state securities laws.
4. This Agreement shall continue until terminated as hereinafter
provided. It may be terminated at the end of any month by either party upon at
least 60 days' notice in writing to the other party. This Agreement may not be
assigned by either party without the written consent of the other party.
5. This Agreement may be amended by the parties, provided that all such
amendments shall be subject to the approval of the Board of Directors of the
Fund.
6. The effective date of this Agreement shall be October 1, 1992. This
Agreement supersedes the Old Agreement between the parties hereto dated February
2, 1987.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first set forth above.
THE ONE HUNDRED FUND, INC.
By:
-------------------------------------
President
BERGER ASSOCIATES, INC.
By:
-------------------------------------
President
2
<PAGE>
Exhibit 23(h)-2
RECORDKEEPING AND PRICING AGENT AGREEMENT
THIS AGREEMENT made effective as of this 1st day of October, 1992, by
and between THE ONE HUNDRED FUND, INC., a Maryland corporation, having its
principal place of business at 210 University Boulevard, Suite 900, Denver,
Colorado 80206 ("Fund"), and INVESTORS FIDUCIARY TRUST COMPANY, a state
chartered trust company organized and existing under the laws of the State of
Missouri, having its principal place of business at 127 West 10th Street,
Kansas City, Missouri, 64105 ("IFTC"): WITNESSETH: WHEREAS, Fund desires to
appoint IFTC as Recordkeeping and Pricing Agent and IFTC desires to accept
such appointment;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENT OF RECORDKEEPING AND PRICING AGENT
Fund hereby constitutes and appoints IFTC as Recordkeeping and Pricing
Agent to calculate the daily net asset value of the Fund and to perform
certain accounting and recordkeeping functions required of Fund as a
registered investment company under the Investment Company Act of 1940, as
amended (the "Act"); to provide certain information necessary for Fund to
file financial and other reports; to prepare, maintain and preserve certain
required books, accounts and records as the basis for such reports; to
perform certain daily functions in connection with such accounts and
records; and, upon request, to act as liaison with the Fund's independent
auditors.
2. DELIVERY OF CORPORATE DOCUMENTS
Fund shall deliver to IFTC prior to the effective date of this Agreement
copies of a resolution of the Board of Directors of Fund appointing IFTC as
Recordkeeping and Pricing Agent for Fund and approving the form of this
Agreement.
3. REPRESENTATIONS AND WARRANTIES OF FUND
A. Fund represents and warrants that it is a corporation duly organized
as an investment company and existing and in good standing under the
laws of the State of Maryland;
<PAGE>
B. Fund represents and warrants that it has the power and authority under
applicable laws, its charter document and bylaws, and has taken all
action necessary to enter into and perform this Agreement, including
appropriate authorization from the Fund's Board of Directors;
C. Fund represents and warrants that it has determined that the automated
data processing system on which IFTC shall prepare, maintain and
preserve the books and records of the Fund (the "Portfolio System") is
suitable for its needs;
D. Fund acknowledges that IFTC, as Licensee, and DST Systems, Inc., as
Licensor ("Licensor"), have proprietary rights in and to the Portfolio
System and that the Portfolio System and the programs, documentation,
books, records, lists, pricing schedules, designs, plans and other
information relating to the Portfolio System or the business of IFTC
("IFTC Confidential Information") are confidential and constitute
trade secrets of IFTC;
E. During the term of this Agreement and for a period of five years after
termination of this Agreement, Fund shall preserve the confidentiality
of the IFTC Confidential Information and prevent its disclosure to
persons other than its own employees and agents who reasonably have a
need to know or have access to the IFTC Confidential Information
pursuant to this Agreement, and shall take appropriate action to
protect the rights of IFTC and Licensor as to the IFTC Confidential
Information, including, but not limited to notification to all
employees and agents of the Fund of the necessity to maintain the
confidentiality of IFTC Confidential Information, provided, that IFTC
shall be solely responsible for protecting any trademarks, patents,
copyrights and licenses against unauthorized use and infringement by
parties other than the Fund, its employees and agents.
4. REPRESENTATION AND WARRANTIES OF IFTC
A. IFTC is a trust company duly organized and existing and in good
standing under the laws of the State of Missouri.
B. IFTC has the power and authority under applicable laws, its charter
and bylaws, and has taken all action necessary, to enter into this
Agreement and perform the
-2-
<PAGE>
services contemplated herein, and this Agreement constitutes a legal,
valid and binding obligation of IFTC, enforceable in accordance with
its terms.
C. IFTC has obtained and shall maintain throughout the term of this
Agreement all necessary proprietary rights and approvals, licenses and
permits which are required for IFTC to perform its duties and
obligations hereunder and to use the Portfolio System.
D. IFTC presently has, and shall maintain throughout the term of this
Agreement, facilities, equipment, computer hardware and software, and
personnel necessary to perform its duties and obligations under this
Agreement, and shall maintain or otherwise have readily available,
reasonable back-up facilities and equipment to ensure that there is no
material interruption in the services contemplated by this Agreement,
except as provided in Section 7 hereof.
5. DUTIES AND RESPONSIBILITIES OF IFTC
A. DELIVERY OF RECORDS.
Fund shall turn over to IFTC all of Fund's accounts and records
previously maintained relating to the services to be provided by IFTC
hereunder. IFTC shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records turned over
to it by Fund or its previous service provider and Fund shall
indemnify and hold IFTC harmless of and from any and all costs,
expenses, damages, losses and liabilities whatsoever, including
attorney's fees (collectively, "Damages"), arising out of or in
connection with any error, omission, inaccuracy or other deficiency of
such accounts and records or in the failure of Fund or its previous
service provider to provide any portion of such account and records or
to provide any information needed by IFTC to perform its function
hereunder.
B. ACCOUNTING AND PORTFOLIO DUTIES.
IFTC shall perform the duties specified on Schedule A attached hereto.
C. ACCOUNTS AND RECORDS
1. IFTC, with the direction of the Fund, its accountants and/or its
advisors, shall prepare, maintain and preserve all books,
records, ledgers, journals,
-3-
<PAGE>
accounts and other documents, containing such information as may
be required from time to time under the Act relating to the
activities performed by IFTC pursuant to Schedule A (the
"Records"); preserve the Records in an readily accessible
location for at least the periods required under the Act, at all
times during the term of this Agreement and, as may be reasonably
necessary, following the termination of this Agreement, make the
Records available for examination by the Securities and Exchange
Commission, the Fund, the Fund's accountants and such other
persons as the Fund may deem appropriate; and maintain facilities
and equipment necessary for producing readable projections or
hard copies of Records. Notwithstanding the terms of this Section
C.1. as heretofore provided, IFTC shall not be responsible for
maintaining or furnishing such Records after termination of the
Agreement to the extent that such Records have been forwarded to
the Fund or its agent. Hard copies of Records will be furnished
to the Fund without additional cost unless such requests for
Records are unusual, repetitive, require special handling, or
otherwise reasonably warrant the Fund's reimbursement for the
costs associated therewith. The Fund shall pay for the costs of
maintaining microfiche records.
2. It shall be the responsibility of Fund to furnish IFTC with the
declaration, record and payment dates and amounts of any
dividends or other distributions, other special actions, and the
value or price of the securities in Fund's portfolio to the
extent such information is not available from generally accepted
securities industry services or publications. IFTC shall incur no
liability and Fund shall indemnify and hold IFTC harmless from
any liability in connection with the Fund's furnishing of such
information.
3. The accounts, books and records prepared, maintained and
preserved by IFTC pursuant to this Agreement shall be the
property of the Fund and shall be made available to the Fund for
inspection or reproduction promptly upon demand.
-4-
<PAGE>
4. IFTC shall assist Fund's independent accountants, and upon
instruction from Fund or upon proper demand, shall assist any
court or regulatory body, in any requested review of Fund's
accounts and records prepared and maintained by IFTC. Fund shall
reimburse IFTC for all reasonable expenses and employee time
associated with any such review which is not part of routine or
normal periodic reviews, unless such expenses are incurred as a
result of a breach of this Agreement by IFTC or IFTC's negligence
or willful misconduct. For purposes of this Agreement, routine or
normal periodic reviews include the annual audit of the Fund and
routine interim audits or reviews by the Fund's independent
accountants and the routine reviews by the Securities and
Exchange Commission (SEC).
5. IFTC shall provide Fund with information for tax returns,
questionnaires, and periodic reports to shareholders and such
other reports and information as Fund may request in conjunction
with IFTC's stated duties hereunder. IFTC shall provide such
information as soon as reasonably practicable following the
Fund's request or as may be otherwise agreed to by the parties.
6. IFTC and Fund may from time to time adopt procedures as they may
agree upon, and IFTC may conclusively assume that any procedure
approved by Fund, or directed by Fund in the manner prescribed by
Section 6.B., does not conflict with or violate any requirements
of Fund's prospectus, charter, bylaws, or any law, rule or
regulation applicable to Fund. Fund shall be responsible to
notify IFTC of any changes in its prospectus, charter, bylaws, or
policies applicable to the Fund which may necessitate changes in
IFTC's responsibilities or procedures. The Fund may conclusively
assume that any procedure adopted by IFTC does not conflict with
or violate any requirements of IFTC's charter, bylaws, or any
law, rule or regulation applicable to IFTC. IFTC shall be
responsible to notify
-5-
<PAGE>
the Fund of any changes in its charter, bylaws, or policies which
may affect the Fund's responsibilities or procedures.
7. IFTC will calculate Fund's daily closing net asset value, in
accordance with the Fund's prospectus. IFTC will prepare and
maintain a daily valuation of securities held in the Fund's
investment portfolio for which market quotations are available by
the use of outside services normally used and contracted for this
purpose; all other securities will be valued in accordance with
Fund's instructions.
6. LIMITATION OF LIABILITY OF IFTC
A. IFTC shall not be liable for any loss or damage resulting from its
action or omission to act or otherwise, except for any loss or damage
arising from any breach of this Agreement or any negligent act or
omission or willful misconduct of IFTC and IFTC shall indemnify and
hold harmless Fund from and against any Damages arising from such
breach, negligence or willful misconduct. Without limiting the
generality of the foregoing, IFTC will use best efforts to resolve to
the satisfaction of the Fund the effect on shareowners of any IFTC
error which causes an incorrect calculation of the net asset value of
the Fund and which effect is considered material, as such term is
generally used by accountants in the mutual fund industry. IFTC shall
not be liable for consequential, special, or punitive damages. IFTC
may request and obtain the advice and opinion of counsel for Fund or
its own counsel at the reasonable expense of Fund with respect to
questions or matters of law relating to its performance of this
Agreement, and it shall be without liability to Fund for any action
taken or omitted by it in good faith, in conformity with such advice
or opinion.
B. IFTC may rely, and be protected in acting in reliance upon any
instruction, advice, notice, consent, resolution, opinion, certificate
or other written instrument appearing to be genuine and properly
executed by an authorized representative of the Fund or any oral
instruction from an authorized representative of the Fund
("Instruction"), except trade instructions and adjustments to the
Fund's trial balance sheet, general ledger or balance sheet, which
must be in writing executed
-6-
<PAGE>
by two authorized representatives of the Fund, unless IFTC has actual
knowledge that any such Instruction is incorrect or unauthorized.
C. IFTC shall be entitled to receive and Fund agrees to pay to IFTC, on
demand, reimbursement for such cash disbursements, costs and expenses
as may be agreed upon in writing from time to time by IFTC and Fund.
D. During the term of this Agreement and for a period of five years after
termination of this Agreement, IFTC shall not use and shall preserve
the confidentiality of all accounting and financial information,
investment portfolio records including, but not limited to,
transactional information, share subscription and redemption records,
and other records made available to or created by IFTC under the terms
of this Agreement ("Fund Confidential Information"), other than for
purposes of complying with its duties and responsibilities under this
Agreement or as specifically authorized by Fund in writing. IFTC shall
prevent disclosure of Fund Confidential Information to persons other
than its own agents and employees who reasonably have a need to know
or have access to Fund Confidential Information pursuant to this
Agreement, and shall take appropriate action to protect the rights of
Fund in such Fund Confidential Information including, but not limited
to, notification to all its employees and agents of the necessity to
maintain the confidentiality of Fund Confidential Information,
provided, that Fund shall be solely responsible for protecting any
trademarks, patents, copyrights and licenses against unauthorized use
and infringement by parties other than IFTC, its employees and agents.
7. FORCE MAJEURE
IFTC shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable
control, including without limitation any interruption, loss or malfunction
of any utility, transportation, computer (hardware or software) or
communication service; or inability to obtain labor, material, equipment or
transportation; nor shall any such failure or delay give Fund any
additional right to terminate this Agreement.
-7-
<PAGE>
8. ADDITIONAL FUNDS
IFTC shall act as Recordkeeping and Pricing Agent for additional funds or
portfolios of Fund upon 30 days notice to IFTC provided that IFTC consents
in advance to such arrangement. Rates or charges for serving as
Recordkeeping and Pricing Agent for any such additional funds or portfolios
of Fund shall be as agreed to by IFTC and Fund in writing.
9. COMPENSATION
Fund shall pay to IFTC such compensation at such time as may from time to
time be agreed upon in writing by IFTC and Fund. The initial compensation
schedule is attached hereto as Schedule B.
10. TERMINATION
Either party to this Agreement may terminate same by notice in writing
received by the other party not less than sixty (60) days prior to the date
upon which such termination shall take effect. Upon termination of this
Agreement, Fund shall pay to IFTC such compensation for its reimbursable
disbursements, costs and expenses paid or incurred to such date and Fund
shall use its best efforts to obtain a successor agent. IFTC shall, upon
termination of this Agreement, deliver to the successor so specified or
appointed, or to Fund, at IFTC's office, all books, records, ledgers,
accounts, journals and other documents and information then held by IFTC
hereunder, all money, instruments and other funds and other properties of
Fund deposited with or held by IFTC hereunder. In the event no written
order designating a successor (which may be Fund) shall have been delivered
to IFTC on or before the date when such termination shall become effective,
then IFTC shall deliver such records, funds and properties of Fund to a
bank or trust company at the selection of IFTC having not less than
$2,000,000 aggregate capital, surplus and undivided profits as shown by its
most recent published report, and meeting the requirements of the Act, or
if a satisfactory successor cannot be obtained, IFTC may deliver the assets
to the Fund, at IFTC's offices or as otherwise agreed to between the
parties. Thereafter the Fund or such bank or trust company shall be the
successor under this Agreement and shall be entitled to reasonable
compensation for its services. Notwithstanding the foregoing requirement as
to delivery upon termination of this
-8-
<PAGE>
Agreement, IFTC may make any other delivery of the records, funds and
property of Fund which shall be permitted by the Act and Fund's charter or
bylaws then in effect.
11. NOTICES
Notices, requests, instructions and other writings received by Fund at 210
University Boulevard, Suite 900, Denver, Colorado 80206, or at such address
as Fund may have designated to IFTC in writing, shall be deemed to have
been properly given to Fund hereunder; and notices, requests, instructions
and other writings received by IFTC at its offices at 127 West 10th Street,
Kansas City, Missouri 64105, or to such other address as it may have
designated to Fund in writing, shall be deemed to have been properly given
to IFTC hereunder.
12. MISCELLANEOUS
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
B. All terms and provisions of this Agreement shall be binding upon,
inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in the Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
-9-
<PAGE>
G. This Agreement may not be assigned by either party without prior
written consent of the other party.
H. This Agreement shall be effective as of the 1st day of October, 1992.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective and duly authorized corporate or trust officers.
THE ONE HUNDRED FUND, INC.
By:
-----------------------------------------
Title:
--------------------------------------
INVESTORS FIDUCIARY TRUST COMPANY
By:
----------------------------------------
Title: EXECUTIVE VICE PRESIDENT
-10-
<PAGE>
Schedule - A
ACCOUNTING AND PORTFOLIO DUTIES
In its capacity as the Recordkeeping and Pricing Agent for the Fund, IFTC
shall perform the following responsibilities:*
A. ON A DAILY BASIS.
1. Prepare available cash forecasts and communicate balances to the Fund.
2. Review investment portfolio for cash and stock dividends and stock
splits.
3. Prepare compliance reports including data necessary to monitor
compliance with limitations prescribed by the Investment Company Act
of 1940 with respect to the types and amounts of securities held in
the Fund's investment portfolio.
4. Review failed security transaction report; investigate failed
transactions and report status to Fund.
5. Prepare overdraft report with explanation of overdraft.
6. Post Fund share receivables and payables to the Fund's general ledger;
send general ledger reflecting all the day's activities to Fund
preferably by 3:30 p.m. Mountain time but in no event later than 8
a.m. Mountain time the next day.
7. Reconcile ending share balance from transfer agent reports to general
ledger; report differences to Fund and resolve with the transfer
agent.
8. Enter security transactions reported by the Fund.
9. Post bank activity to general ledger; account for all items on bank
statements, and prepare and complete daily bank reconciliations,
including documentation of reconciling items.
10. Post manual journal entries to the general ledger.
11. Review current daily security transactions for dividends, splits and
other corporate activity.
12. Prepare Net Asset Value rollforward.
13. Review individual components of the change in the Fund's Net Asset
Value for accuracy and reasonableness.
-i-
<PAGE>
14. Enter manual prices.
15. Review pricing stratification report for unusual price movements in
individual securities; investigate and trace items to the particular
pricing sources; and consult with Fund. Review pricing report for
detection of stock splits and dividends, cash dividends and corporate
action. Review NAV for incorrect CUSIP numbers or ticker symbols or
incorrectly posted purchases and sales of securities. Review income
and expense accruals and posting of gains and losses for proper
recording. Send Fund complete pricing sheet for the Fund's portfolio
preferably by 3:30 p.m. Mountain time but in no event later that 8:00
a.m. Mountain time the next day.
16. Review for ex-dividend items indicated by pricing sources.
17. Communicate required pricing information to Fund,
quotation/publication services and to transfer agents. Communicate NAV
to newspapers and quotation services in time for publication and to
the transfer agent in time to run the shareowner accounts by the
beginning of the next day. Communicate the NAV and corresponding
worksheet to the Fund preferably by 3:30 p.m. Mountain time but in no
event later that 8:00 a.m. Mountain time the next day.
18. Attend to routine matters in connection with the calculation of the
net asset value and aggregate asset value of the Fund.
B. ON A PERIODIC BASIS.
1. Provide information prepared by IFTC during the performance of its
duties hereunder for Fund's semiannual reports within 15 calendar days
after March 31st and September 30th or the end of the reporting period
of the Fund, as applicable.
2. As agreed upon, deliver information to Fund on days when the NYSE is
not open.
*Information shall be provided by IFTC's normal means as acceptable to the Fund.
Costs for communicating routine information shall be borne by IFTC; costs other
than routine information, including microfiche, shall be borne by the Fund.
-ii-
<PAGE>
Exhibit 23(h)-3
AGENCY AGREEMENT
THIS AGREEMENT made as of the 24th day of March, 1992, by and between
BERGER ONE HUNDRED FUND, INC., a corporation existing under the laws of the
State of Maryland, having its principal place of business at 210 University
Boulevard, Suite 900, Denver, Colorado 80206 ("Fund"), and INVESTORS FIDUCIARY
TRUST COMPANY, a state chartered trust company organized and existing under the
laws of the State of Missouri, having its principal place of business at 127
West 10th Street, Kansas City, Missouri 64105 ("IFTC"):
WITNESSETH:
WHEREAS, Fund desires to appoint IFTC as Transfer Agent and Dividend
Disbursing Agent, and IFTC desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. DOCUMENTS TO BE FILED WITH APPOINTMENT.
In connection with the appointment of IFTC as Transfer Agent and Dividend
Disbursing Agent for Fund, there will be filed with IFTC the following
documents:
A. A certified copy of the resolutions of the Board of Directors of Fund
appointing IFTC as Transfer Agent and Dividend Disbursing Agent,
approving the form of this Agreement, and designating certain persons
to sign stock certificates, if any, and give written instructions and
requests on behalf of Fund;
B. A certified copy of the Articles of Incorporation of Fund and all
amendments thereto;
C. A certified copy of the Bylaws of Fund;
D. Copies of Registration Statements and amendments thereto, filed with
the Securities and Exchange Commission.
E. Specimens of all forms of outstanding stock certificates, in the forms
approved by the Board of Directors of Fund, with a certificate of the
Secretary of Fund, as to such approval;
<PAGE>
F. Specimens of the signatures of the officers of the Fund authorized to
sign stock certificates and individuals authorized to sign written
instructions and requests;
G. An opinion of counsel for Fund with respect to:
(1) Fund's organization and existence under the laws of its state of
organization,
(2) The status of all shares of stock of Fund covered by the
appointment under the Securities Act of 1933, as amended, and any
other applicable federal or state statute and
(3) That all issued shares are, and all unissued shares will be, when
issued, validly issued, fully paid and nonassessable.
2. CERTAIN REPRESENTATIONS AND WARRANTIES OF IFTC. IFTC represents and
warrants to Fund that:
A. It is a trust company duly organized and existing and in good standing
under the laws of Missouri.
B. It is duly qualified to carry on its business in the State of
Missouri.
C. It is empowered under applicable laws and by its Articles of
Incorporation and bylaws to enter into and perform the services
contemplated in this Agreement.
D. It is registered as a transfer agent to the extent required under the
Securities Exchange Act of 1934.
E. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
F. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
3. CERTAIN REPRESENTATIONS AND WARRANTIES OF FUND. Fund represents and
warrants to IFTC that:
A. It is a corporation duly organized and existing and in good standing
under the laws of the State of Maryland.
B. It is an open-end diversified management investment company registered
under the Investment Company Act of 1940, as amended.
-2-
<PAGE>
C. A registration statement under the Securities Act of 1933 has been
filed and will be effective with respect to all shares of Fund being
offered for sale.
D. All requisite steps have been or will be taken to register Fund's
shares for sale in all applicable states.
E. Fund is empowered under applicable laws and by its charter and bylaws
to enter into and perform this Agreement.
4. SCOPE OF APPOINTMENT.
A. Subject to the conditions set forth in this Agreement, Fund hereby
employs and appoints IFTC as Transfer Agent and Dividend Disbursing
Agent effective the day of , 19 .
----- ------------ ---
B. IFTC hereby accepts such employment and appointment and agrees that it
will act as Fund's Transfer Agent and Dividend Disbursing Agent. IFTC
agrees that it will also act as agent in connection with Fund's
periodic withdrawal payment accounts and other open accounts or
similar plans for shareholders, if any.
C. IFTC agrees to provide the necessary facilities, equipment and
personnel to perform its duties and obligations hereunder in
accordance with industry practice.
D. Fund agrees to use its best efforts to deliver to IFTC in Kansas City,
Missouri, as soon as they are available, all of its shareholder
account records.
E. Subject to the provisions of Sections 19. and 20. hereof, IFTC agrees
that it will perform all of the usual and ordinary services of
Transfer Agent and Dividend Disbursing Agent and as Agent for the
various shareholder accounts, including, without limitation, the
following: issuing, transferring and cancelling stock certificates, if
any, maintaining all shareholder accounts, preparing shareholder
meeting lists, mailing proxies, receiving and tabulating proxies,
mailing shareholder reports and prospectuses, withholding taxes on
nonresident alien and foreign corporation accounts, for pension and
deferred income, backup withholding or other instances agreed upon by
the parties, preparing and mailing checks for disbursement of
redemptions, income dividends and capital gains distributions,
preparing and filing U.S. Treasury Department Form 1099 for all
shareholders, preparing and mailing confirmation forms to shareholders
and
-3-
<PAGE>
dealers with respect to all purchases and redemptions of Fund shares
and other transactions in shareholder accounts for which confirmations
are required, recording reinvestments of dividends and distributions
in Fund shares, and cooperating with broker-dealers and financial
intermediaries who represent shareholders of the Fund.
5. LIMIT OF AUTHORITY.
Unless otherwise expressly limited by the resolution of appointment or by
subsequent action by the Fund, the appointment of IFTC as Transfer Agent
will be construed to cover the full amount of authorized stock of the class
or classes for which IFTC is appointed as the same will, from time to time,
be constituted, and any subsequent increases in such authorized amount. In
case of such increase Fund will file with IFTC:
A. If the appointment of IFTC was theretofore expressly limited, a
certified copy of a resolution of the Board of Directors of Fund
increasing the authority of IFTC;
B. A certified copy of the amendment to the Articles of Incorporation of
Fund authorizing the increase of stock;
C. A certified copy of the order or consent of each governmental or
regulatory authority required by law to consent to the issuance of the
increased stock, and an opinion of counsel that the order or consent
of no other governmental or regulatory authority is required;
D. Opinion of counsel for Fund stating:
(1) The status of the additional shares of stock of Fund under the
Securities Act of 1933, as amended, and any other applicable
federal or state statute; and
(2) That the additional shares are, or when issued will be, validly
issued, fully paid and nonassessable.
6. COMPENSATION AND EXPENSES.
A. In consideration for its services hereunder as Transfer Agent and
Dividend Disbursing Agent, Fund will pay to IFTC from time to time a
reasonable compensation for all services rendered as Agent, and also,
all its reasonable out- of-pocket expenses, charges, counsel fees, and
other disbursements (Compensation and Expenses) incurred in connection
with the agency. Such compensation is set forth in a separate
schedule, a copy of which is attached hereto and incorporated herein
by reference. IFTC shall make reasonable efforts to bill the Fund as
soon as practicable after the end of each calendar month for the
Compensation and Expenses due for that month and said billing shall be
detailed in accordance with the such schedule. If the Fund has not
paid such Compensation and Expenses to IFTC within a reasonable time,
IFTC may charge against any monies held under this Agreement, the
amount of any Compensation and/or Expenses for which it shall be
entitled to reimbursement under this Agreement.
B. Fund agrees to promptly reimburse IFTC for all reasonable
out-of-pocket expenses or advances incurred by IFTC in connection with
the performance of services under this Agreement, for postage (and
first class mail insurance in connection with mailing share
certificates), envelopes, check forms, continuous forms, forms for
reports and statements, stationery, and other similar items, telephone
and telegraph charges incurred in answering inquiries from dealers or
shareholders, microfilm used each year to record the previous year's
transactions in shareholder accounts and computer tapes used for
permanent storage of records and cost of insertion of materials in
mailing envelopes by outside firms. IFTC will provide to Fund no less
often than monthly a detailed accounting of all such expenses on
behalf of the Fund.
7. OPERATION OF IFTC SYSTEM.
A. In connection with the performance of its services under this
Agreement, IFTC is responsible for such items as:
(1) The accuracy of entries in IFTC's records reflecting orders and
instructions received by IFTC from dealers, shareholders, Fund or
its principal underwriter;
-4-
<PAGE>
(2) The availability and the accuracy of shareholder lists,
shareholder account verifications, confirmations and other
shareholder account information to be produced from its records
or data;
(3) The accurate and timely issuance of dividend and distribution
checks in accordance with instructions received from Fund;
(4) The accuracy of redemption transactions and payments in
accordance with redemption instructions received from dealers,
shareholders or Fund;
(5) The deposit daily in Fund's appropriate special bank account of
all checks and payments received from dealers or shareholders for
investment in shares;
(6) The requiring of proper forms of instructions, signatures and
signature guarantees and any necessary documents supporting the
legality of transfers, redemptions and other shareholder account
transactions, all in conformance with IFTC's and the Fund's
present procedures with such changes as may be required or
approved by Fund; and
(7) The maintenance of a current duplicate set of Fund's essential
records at a secure distant location, in a form available and
usable forthwith in the event of any breakdown or disaster
disrupting its main operation.
8. INDEMNIFICATION.
A. IFTC will not be responsible for, and Fund will hold harmless and
indemnify IFTC from and against any loss by or liability to the Fund
or a third party, including reasonable attorney's fees, in connection
with any claim or suit asserting any such liability arising out of or
attributable to actions taken or omitted by IFTC pursuant to this
Agreement, unless IFTC has acted negligently or in bad faith. The
matters covered by this indemnification include but are not limited to
those of Section 14. hereof. Fund will be responsible for, and will
have the right to conduct or control the defense of any litigation
asserting liability, including reasonable attorney's fees, against
which IFTC is indemnified hereunder. IFTC will not be under any
obligation to prosecute or defend any action or suit in respect of the
agency relationship hereunder, which, in its
-5-
<PAGE>
opinion, may involve it in expense or liability, unless Fund will, as
often as requested, furnish IFTC with reasonable, satisfactory
security and indemnity against such expense or liability.
B. IFTC will hold harmless and indemnify Fund from and against any loss
or liability arising out of IFTC's negligence or bad faith in
performing its duties under this Agreement, including reasonable
attorney's fees.
9. CERTAIN COVENANTS OF IFTC AND FUND.
A. All requisite steps will be taken by Fund from time to time when and
as necessary to register the Fund's shares for sale in all states in
which Fund's shares shall at the time be offered for sale and require
registration. If at any time Fund will receive notice of any stop
order or other proceeding in any such state affecting such
registration or the sale of Fund's shares, or of any stop order or
other proceeding under the federal securities laws affecting the sale
of Fund's shares, Fund will give prompt notice thereof to IFTC.
B. IFTC hereby agrees to perform such transfer agency functions as are
set forth in Section 4.E. above and establish and maintain facilities
and procedures reasonably acceptable to Fund for safekeeping of stock
certificates, check forms, and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of,
such certificates, forms and devices, and to carry such insurance as
it considers adequate and reasonably available and not to
substantially reduce such level of insurance without prior notice to
the Fund.
C. To the extent required by Section 31 of the Investment Company Act of
1940 as amended and Rules thereunder, IFTC agrees that all records
maintained by IFTC relating to the services to be performed by IFTC
under this Agreement are the property of Fund and will be preserved
and will be surrendered promptly to Fund on request.
D. IFTC agrees to furnish Fund semiannual reports of its financial
condition, consisting of a balance sheet, earnings statement and any
other financial information reasonably requested by Fund. The annual
financial statements will be certified by IFTC's certified public
accountants.
-6-
<PAGE>
E. IFTC represents and agrees that it will use its best efforts to keep
current on the trends of the investment company industry relating to
shareholder services and will use its best efforts to continue to
modernize and improve.
F. IFTC will permit Fund and its authorized representatives to make
periodic inspections of its operations as such would involve the Fund
at reasonable times during business hours.
10. RECAPITALIZATION OR READJUSTMENT.
In case of any recapitalization, readjustment or other change in the
capital structure of Fund requiring a change in the form of stock
certificates, IFTC will issue or register certificates in the new form in
exchange for, or in transfer of, the outstanding certificates in the old
form, upon receiving:
A. Written instructions from an officer of Fund;
B. Certified copy of the amendment to the Articles of Incorporation or
other document effecting the change;
C. Certified copy of the order or consent of each governmental or
regulatory authority, required by law to the issuance of the stock in
the new form, and an opinion of counsel that the order or consent of
no other government or regulatory authority is required;
D. Specimens of the new certificates in the form approved by the Board of
Directors of Fund, with a certificate of the Secretary of Fund as to
such approval;
E. Opinion of counsel for Fund stating:
(1) The status of the shares of stock of Fund in the new form under
the Securities Act of 1933, as amended and any other applicable
federal or state statute; and
(2) That the issued shares in the new form are, and all unissued
shares will be, when issued, validly issued, fully paid and
nonassessable.
11. STOCK CERTIFICATES.
Fund will furnish IFTC with a sufficient supply of blank stock certificates
and from time to time will renew such supply upon the request of IFTC. Such
certificates will be signed manually or by facsimile signatures of the
officers of Fund authorized by law and by
-7-
<PAGE>
bylaws to sign such certificates, and if required, will bear the corporate
seal or facsimile thereof.
12. DEATH, RESIGNATION OR REMOVAL OF SIGNING OFFICER.
Fund will file promptly with IFTC written notice of any change in the
officers authorized to sign certificates, written instructions or requests,
together with two signature cards bearing the specimen signature of each
newly authorized officer. In case any officer of Fund who will have signed
manually or whose facsimile signature will have been affixed to blank stock
certificates will die, resign, or be removed prior to the issuance of such
certificates, IFTC may issue or register such stock certificates as the
stock certificates of Fund notwithstanding such death, resignation, or
removal, until specifically directed to the contrary by Fund in writing. In
the absence of such direction, Fund will file promptly with IFTC such
approval, adoption, or ratification as may be required by law.
13. FUTURE AMENDMENTS OF CHARTER AND BYLAWS.
Fund will promptly file with IFTC copies of all material amendments to its
Articles of Incorporation or bylaws made after the date of this Agreement.
14. INSTRUCTIONS, OPINION OF COUNSEL AND SIGNATURES.
At any time IFTC may apply to any person authorized by the Fund to give
instructions to IFTC, and may with the approval of a Fund officer consult
with legal counsel for Fund or its own legal counsel at the expense of
Fund, with respect to any matter arising in connection with the agency and
it will not be liable for any action taken or omitted by it in good faith
in reliance upon such instructions or upon the opinion of such counsel.
IFTC will be protected in acting upon any paper or document reasonably
believed by it to be genuine and to have been signed by the proper person
or persons and will not be held to have notice of any change of authority
of any person, until receipt of written notice thereof from Fund. It will
also be protected in recognizing stock certificates which it reasonably
believes to bear the proper manual or facsimile signatures of the officers
of Fund, and the proper countersignature of any former Transfer Agent or
Registrar, or of a co-Transfer Agent or co-Registrar.
-8-
<PAGE>
15. PAPERS SUBJECT TO APPROVAL OF COUNSEL.
The acceptance by IFTC, of its appointment as Transfer Agent and Dividend
Disbursing Agent and all documents filed in connection with such
appointment and thereafter in connection with the agencies, will be subject
to the approval of legal counsel for IFTC (which approval will be not
unreasonably withheld).
16. CERTIFICATION OF DOCUMENTS.
The required copy of the Articles of Incorporation of Fund and copies of
all amendments thereto will be certified by the Secretary of State (or
other appropriate official) of the State of Incorporation, and if such
Articles of Incorporation and amendments is required by law to be also
filed with a county, city or other officer of official body, a certificate
of such filing will appear on the certified copy submitted to IFTC. A copy
of the order or consent of each governmental or regulatory authority
required by law to the issuance of the stock certificate will be certified
by the Secretary or Clerk of such governmental or regulatory authority,
under proper seal of such authority. The copy of the Bylaws and copies of
all amendments thereto, and copies of resolutions of the Board of Directors
of Fund, will be certified by the Secretary or an Assistant Secretary of
Fund under the Fund's seal.
17. RECORDS.
IFTC will maintain customary records in connection with its agency, and
particularly will maintain those records required to be maintained pursuant
to subparagraph (2) (iv) of paragraph (b) of Rule 31a-1 for the period and
in the manner prescribed by Rule 31a-2 under the Investment Company Act of
1940, if any.
18. DISPOSITION OF BOOKS, RECORDS AND CANCELLED CERTIFICATES.
IFTC will send periodically to Fund, or to where designated by the
Secretary or an Assistant Secretary of Fund, all books, documents, and all
records no longer deemed needed for current purposes and stock certificates
which have been cancelled in transfer or in exchange, upon the
understanding that such books, documents, records, and stock certificates
will not be destroyed by Fund without the consent of IFTC (which consent
will not be unreasonably withheld), but will be safely stored for possible
future reference.
-9-
<PAGE>
19. PROVISIONS RELATING TO IFTC AS TRANSFER AGENT.
A. IFTC will make original issues of stock certificates upon written
request of an officer of Fund and upon being furnished with a
certified copy of a resolution of the Board of Directors authorizing
such original issue, an opinion of counsel as outlined in paragraphs
1.D. and G. of this Agreement, any documents required by paragraphs 5.
or 10. of this Agreement, and necessary funds for the payment of any
original issue tax.
B. Before making any original issue of certificates Fund will furnish
IFTC with sufficient funds to pay all required taxes on the original
issue of the stock, if any. Fund will furnish IFTC such evidence as
may be required by IFTC to show the actual value of such stock. If no
taxes are payable IFTC will be furnished with an opinion of outside
counsel to that effect.
C. Shares of stock will be transferred and new certificates issued in
transfer, or shares of stock accepted for redemption and funds
remitted therefor, upon surrender of the old certificates in form
deemed by IFTC properly endorsed for transfer or redemption
accompanied by such documents as IFTC may deem necessary to evidence
that authority of the person making the transfer or redemption, and
bearing satisfactory evidence of the payment of any applicable stock
transfer taxes. IFTC reserves the right to refuse to transfer or
redeem shares until it is satisfied that the endorsement or signature
on the certificate or any other document is valid and genuine, and for
that purpose it may require a guaranty of signature by a financial
institution as permitted by the Fund's prospectus or as otherwise
required by applicable law. IFTC also reserves the right to refuse to
transfer or redeem shares until it is satisfied that the requested
transfer or redemption is legally authorized, and it will incur no
liability for the refusal in good faith to make transfers or
redemptions which, in its judgment, are improper or unauthorized. IFTC
may, in effecting transfers or redemptions, rely upon Simplification
Acts or other statutes which protect it and Fund in not requiring
complete fiduciary documentation. In cases in which IFTC is not
directed or otherwise required to maintain the consolidated records of
shareholder's accounts,
-10-
<PAGE>
IFTC will not be liable for any loss which may arise by reason of not
having such records, provided that such loss could not have been
prevented by the exercise of ordinary diligence.
D. When mail is used for delivery of stock certificates IFTC will forward
stock certificates in "nonnegotiable" form by first class or
registered mail and stock certificates in "negotiable" form by
registered mail, all such mail deliveries to be covered while in
transit to the addressee by insurance arranged for by IFTC.
E. IFTC will issue and mail subscription warrants, certificates
representing stock dividends, exchanges or split ups, or act as
Conversion Agent upon receiving written instructions from any officer
of Fund and such other documents as IFTC deems necessary.
F. IFTC will issue, transfer, and split up certificates and will issue
certificates of stock representing full shares upon surrender of scrip
certificates aggregating one full share or more when presented to IFTC
for that purpose upon receiving written instructions from an officer
of Fund and such other documents as IFTC may deem necessary.
G. IFTC may issue new certificates in place of certificates represented
to have been lost, destroyed, stolen or otherwise wrongfully taken
upon receiving instructions from Fund and indemnity satisfactory to
IFTC and Fund, and may issue new certificates in exchange for, and
upon surrender of, mutilated certificates. Such instructions from Fund
will be in such form as will be approved by the Board of Directors of
Fund and will be in accordance with the provisions of law and the
bylaws of Fund governing such matter.
H. IFTC will supply a shareholder's list to Fund for its annual meeting
upon receiving a request from an officer of Fund. It will also supply
lists at such other times as may be requested by an officer of Fund.
I. Upon receipt of written instructions of an officer of Fund, IFTC will
address and mail notices to shareholders.
J. In case of any request or demand for the inspection of the stock books
of Fund or any other books in the possession of IFTC, IFTC will
endeavor to notify Fund and
-11-
<PAGE>
to secure instructions as to permitting or refusing such inspection.
IFTC reserves the right, however, to exhibit the stock books or other
books to any person in case it is advised by its counsel that it may
be held responsible for the failure to exhibit the stock books or
other books to such person.
K. In the event that any check or other order for the payment of money is
returned unpaid for any reason, IFTC will: (i) within three days give
written notice of such return to the Fund or its designee; (ii) place
a stop transfer order against all Fund shares issued in certificate
form as a result of such check or order or cancel the purchase of Fund
shares issued in book-entry form as a result of such check or order,
(iii) take such other steps as IFTC may, in its discretion, deem
appropriate or as the Fund or its designee may instruct.
L. Upon receipt of all necessary information and documentation relating
to a redemption, IFTC will issue to the Fund's custodian an advice
setting forth the number of shares of the Fund received by IFTC for
redemption. IFTC shall, upon notification that the custodian has
transferred funds for the redemption of shares to a redemption account
at IFTC or at another bank, pay such moneys to the shareholder, his
authorized agent or legal representative.
M. IFTC is authorized to review and process transfers of shares of the
Fund and exchanges between the Fund and other mutual funds for which
IFTC acts as transfer agent as permitted in the prospectus for the
Fund, on the records of the Fund maintained by IFTC. If shares to be
transferred are represented by outstanding certificates, IFTC shall,
upon surrender to it of the certificates in proper form for transfer,
and upon cancellation thereof, countersign and issue new certificates
for a like number of shares (if so requested by the registered holder
thereof) and deliver the same. If the shares to be transferred are not
represented by outstanding certificates, IFTC shall upon an order
thereof by or on behalf of the registered holder thereof in proper
form, credit the same to the transferee on its books. If shares are to
be exchanged for shares of another mutual fund, IFTC will process such
shares exchanged in the same manner as a redemption and sale
-12-
<PAGE>
of shares, except that it may in its discretion waive requirements for
information and documentation.
N. Unless otherwise instructed by the Fund, IFTC shall maintain records
showing for each investor's account the following: (i) names,
addresses, tax identifying numbers and assigned account numbers; (ii)
numbers of shares held; (iii) historical information regarding the
account of each shareholder, including dividends paid and date and
price of all transactions on a shareholder's account; (iv) any stop or
restraining order placed against a shareholder's account or on lost
and/or replaced certificates; (v) information with respect to
withholdings in the case of a foreign account; (vi) any capital gain
or dividend reinvestment order, account application, dividend address
and correspondence relating to the current maintenance of a
shareholder's account; (vii) certificate numbers and denominations for
any shareholders holding certificates; and (viii) any information
required in order to permit the Fund to confirm that IFTC has properly
performed the calculations contemplated or required by this Agreement.
O. IFTC will maintain records necessary to reflect the crediting of
dividends which are reinvested in shares of the Fund.
P. IFTC will investigate all shareholder inquiries related to shareholder
accounts and respond promptly to correspondence from shareholders.
Q. If requested and as directed by the Fund, IFTC will address and mail
all communications to shareholders or their nominees, including proxy
material and periodic reports to shareholders.
R. In connection with special and annual meetings of shareholders, IFTC
will prepare shareholder lists, mail and certify as to the mailing of
proxy materials, process and tabulate returned proxy cards, report on
proxies voted and received by IFTC prior to meetings as stated in the
proxy statement, and certify to the Secretary of the Fund shares to be
voted at meetings.
S. In addition to the duties expressly provided for herein, IFTC shall
perform such other duties and functions as are set forth in the
Compensation and Expenses schedule hereto from time to time.
-13-
<PAGE>
20. PROVISIONS RELATING TO DIVIDEND DISBURSING AGENCY.
A. IFTC will maintain one or more deposit accounts as Agent for the Fund,
into which the funds for payment of dividends, distributions,
redemptions or other disbursements provided for hereunder will be
deposited, and against which checks for the foregoing purposes will be
drawn (Accounts).
B. Upon the receipt of proper instructions, as described below, which may
be continuing instructions when deemed appropriate by the parties,
IFTC shall pay out monies of the Fund in such Accounts in the
following cases only:
1. For the redemption of Fund shares according to the Fund's then
current prospectus;
2. For the payment of any dividends declared by the Fund or other
distributions to shareholders of the Fund; and
3. For any other proper purpose, but only upon receipt of proper
instructions specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such
purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
IFTC shall disburse funds from such Accounts as directed upon receipt
of instructions from the Fund. All instructions shall be given only by
persons designated in writing to IFTC by the Fund to be authorized to
give instructions to IFTC under this Agreement. Instructions may be in
writing executed by an authorized representative of the Fund or, if
IFTC reasonably believes such instructions to be by an authorized
representative of the Fund, via telecommunications.
C. The Fund will promptly notify IFTC of the declaration of any dividend
or distribution. The Fund shall furnish to IFTC a written document
specifying the date of the declaration of such dividend or
distribution, the date of payment thereof, the record date as of which
shareholders entitled to payment shall be determined, the amount
payable per share to shareholders of record as of that date, and the
total amount payable to IFTC on the payment date.
-14-
<PAGE>
D. IFTC will, on or before the payable date of any dividend or
distribution, notify the Fund's custodian of the estimated amount of
cash required to pay said dividend or distribution, and the Fund areas
that, on or before the mailing date of such dividend or distribution,
it shall instruct the custodian to place in a dividend disbursing
account at IFTC or another bank, funds equal to the cash amount to be
paid out. IFTC will calculate, prepare and mail checks to, or (where
appropriate) credit such dividend or distribution to the account of,
Fund shareholders, and maintain and safeguard all required underlying
records.
E. As directed by the Fund, IFTC shall prepare and mail to each Fund
shareholder such information with respect to each dividend or
distribution as is required by applicable federal income tax laws and
regulations and by the Investment Company Act of 1940.
F. As directed by the Fund, IFTC shall file such appropriate information
returns concerning the payment of dividends and capital gain
distributions with the proper federal authorities as are required by
federal law to be filed by the Fund and shall withhold such sums as
are required to be withheld by federal law.
G. IFTC will, at the expense of the Fund, provide a special form of check
containing the imprint of any device or other matter desired by Fund.
Such form of checks must, however, be compatible with the equipment
employed by IFTC and its agents.
H. If the Fund desires to include additional printed matter, financial
statements, etc. with the dividend checks, the same will be furnished
to IFTC within a reasonable time prior to the date of mailing of the
dividend checks, at the expense of the Fund.
I. If the Fund desires that its distributions be mailed in any special
form of envelopes, a sufficient supply of the same will be furnished
to IFTC, but the size and form of said envelopes will be subject to
the approval of IFTC. If stamped envelopes are used, they must be
furnished by Fund or, if postage stamps are to be affixed to the
envelopes, the stamps or the cash necessary for such stamps must be
furnished by the Fund prior to mailing.
-15-
<PAGE>
J. IFTC is authorized and directed to stop payment of checks theretofore
issued hereunder, but not presented for payment, when the payees
thereof allege either that they have not received the checks or that
such checks have been mislaid, lost, stolen, destroyed or through no
fault of theirs, are otherwise beyond their control, and cannot be
produced by them for presentation and collections, and, to issue and
deliver duplicate checks in replacement thereof upon receipt of
properly executed affidavits.
21. ASSUMPTION OF DUTIES BY THE FUND.
The Fund may assume certain duties and responsibilities of IFTC or those
usual and ordinary services of Transfer Agent and Dividend Disbursement
Agent as those terms are referred to in Section 4.E. of this Agreement
including but not limited to accepting shareholder instructions and
transmitting orders based on such instructions to IFTC, preparing and
mailing confirmations, obtaining certified TIN numbers, and disbursing
monies of the Fund. To the extent the Fund or its agent or affiliate
assumes such duties and responsibilities, IFTC shall be relieved from all
responsibility and liability therefor.
22. TERMINATION OF AGREEMENT.
A. This Agreement may be terminated by either party upon receipt of sixty
(60) days written notice from the other party.
B. Fund, in addition to any other rights and remedies, shall have the
right to terminate this Agreement forthwith upon the occurrence at any
time of any of the following events:
(1) Any interruption or cessation of operations by IFTC or its
assigns which materially interferes with the business operation
of Fund;
(2) The bankruptcy of IFTC or its assigns or the appointment of a
receiver for IFTC or its assigns;
(3) Any merger, consolidation or sale of substantially all the assets
of IFTC or its assigns;
(4) The acquisition of a controlling interest in IFTC or its assigns,
by any broker, dealer, investment adviser or investment company
except as may presently exist; or
-16-
<PAGE>
(5) Failure by IFTC or its assigns to perform its duties in
accordance with the Agreement, which failure materially adversely
affects the business operations of Fund and which failure
continues for thirty (30) days after receipt of written notice
from Fund.
C. In the event of termination, Fund will promptly pay IFTC all amounts
due to IFTC hereunder.
D. In the event of termination, IFTC will use its best efforts to
transfer the books and records of the Fund to the designated successor
transfer agent and to provide other information relating to its
service provided hereunder for reasonable compensation therefor.
23. ASSIGNMENT.
A. Neither this Agreement nor any rights or obligations hereunder may be
assigned by IFTC without the written consent of Fund; provided,
however, no assignment will relieve IFTC of any of its obligations
hereunder. IFTC may, however, employ agents to assist it in performing
its duties hereunder.
B. This Agreement will inure to the benefit of and be binding upon the
parties and their respective successors and assigns.
24. CONFIDENTIALITY.
A. IFTC agrees that, except as provided in the last sentence of Section
19.J hereof, or as otherwise required by law, IFTC will keep
confidential all records of and information in its possession relating
to Fund or its shareholders or shareholder accounts and will not
disclose the same to any person except at the request or with the
consent of Fund.
B. Fund agrees to keep confidential all financial statements and other
financial records (other than statements and records relating solely
to Fund's business dealings with IFTC) and all manuals, systems and
other technical information and data, not publicly disclosed, relating
to IFTC's operations and programs furnished to it by IFTC pursuant to
this Agreement and will not disclose the same to any person except at
the request or with the consent of IFTC.
-17-
<PAGE>
C. The Fund acknowledges that IFTC and DST Systems, Inc. (DST) have
proprietary rights in and to the computerized data processing
recordkeeping system used by IFTC to perform services hereunder
including, but not limited to the maintenance of shareholder accounts
and records, processing of related information and generation of
output (the MFS System), including, without limitation any changes or
modifications of the MFS System and any other IFTC or DST programs,
data bases, supporting documentation, or procedures ("collectively
IFTC Protected Information") which the Fund's access to the MFS System
or computer hardware or software may permit the Fund or its employees
or agents to become aware of or to access and that the IFTC Protected
Information constitutes confidential material and trade secrets of
IFTC. The Fund agrees to maintain the confidentiality of the IFTC
Protected Information. The Fund acknowledges that any unauthorized
use, misuse, disclosure or taking of IFTC Protected Information which
is confidential as provided by law, or which is a trade secret,
residing or existing internal or external to a computer, computer
system, or computer network, or the knowing and unauthorized accessing
or causing to be accessed of any computer, computer system, or
computer network, may be subject to civil liabilities and criminal
penalties under applicable state law. The Fund will advise all of its
employees and agents who have access to any IFTC Protected Information
or to any computer equipment capable of accessing IFTC or DST hardware
or software of the foregoing. IFTC and DST are intended to be, and
shall be, third party beneficiaries of the Fund's obligations and
undertakings contained in this Section.
25. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
A. All representations and warranties by either party herein contained
will survive the execution and delivery of this Agreement.
26. MISCELLANEOUS.
A. This Agreement is executed and delivered in the State of Missouri and
shall be governed by the laws of said state.
-18-
<PAGE>
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successors and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction or effect.
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
-19-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers.
INVESTORS FIDUCIARY TRUST COMPANY
By:
------------------------------------
Title:
---------------------------------
BERGER ONE HUNDRED FUND, INC.
By:
------------------------------------
Title:
---------------------------------
-20-
<PAGE>
EXHIBIT B
INSURANCE COVERAGE
Insurance coverages maintained by IFTC effective March 10, 1991
DESCRIPTION OF POLICY:
BROKERS BLANKET BOND, STANDARD FORM 14
Covering losses caused by dishonesty of employees, physical loss of
securities on or outside of premises while in possession of authorized
person, loss caused by forgery or alteration of checks or similar
instruments.
Coverage: $75,000,000
ERRORS AND OMISSIONS INSURANCE
Indemnifies against loss in providing shareholder accounting services
by reason of neglect, error or omission.
Coverage: $10,000,000
SPECIAL FORGERY BOND
Covering losses through forgery or alteration of checks or drafts of
customers processed by insured but drawn on or against them.
Coverage: $1,000,000
MAIL INSURANCE (APPLIES TO ALL FULL SERVICE OPERATIONS)
Provides indemnity for security lost in the mails.
Coverage:
$10,000,000 nonnegotiable securities mailed to domestic locations
via registered mail.
$1,000,000 nonnegotiable securities mailed to domestic locations
via first-class or certified mail.
$1,000,000 nonnegotiable securities mailed to foreign locations
via registered mail.
$1,000,000 negotiable securities mailed to all locations via
registered mail.
-i-
<PAGE>
Exhibit 23(m)
RULE 12b-1 PLAN OF
THE ONE HUNDRED FUND, INC.
1. The Plan. The One Hundred Fund, Inc., a Maryland
--------
corporation (the "Fund"), hereby adopts this Rule 12b-1 Plan (the "Plan")
pursuant to the terms of Rule 12b-1 under the Investment Company Act of 1940, as
amended (the "Act"). In accordance with the terms of this Plan, the Fund may
act as the distributor of its own shares.
2. Authorized Payments. During each fiscal year of the Fund, the Fund is
-------------------
hereby authorized to pay out of the assets of the Fund on a monthly basis, an
amount computed at a rate of twenty-five one-hundredths of one percent (.25%)
of the average daily net assets of the Fund during such fiscal year to Berger
Associates, Inc. ("Berger Associates") to finance activities primarily
intended to result in the sale of the Fund's shares, which shall include, but
not be 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 prospective investor
requests for information; compensation paid to securities dealers, financial
institutions and other organizations which render distribution and
administrative services in connection with the distribution of the Fund's
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 Fund; costs involved in preparing, printing and
distributing sales literature for the Fund; costs involved in obtaining
whatever information, analyses and reports with respect to marketing and
promotional activities on behalf of the Fund that Berger Associates deems
advisable; and such other costs as may from time to time be agreed upon by
the Fund. Such payments shall be made by the 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; i.e.,
distribution expenditures incurred by Berger Associates which are less than
the total of such payments in such year shall not be reimbursed to the Fund
by Berger Associates, and distribution expenditures incurred by Berger
Associates which are more than the total of such payments shall not be
reimbursed to Berger Associates by the Fund.
3. Shareholder Approval. This Plan shall not take effect until it has
--------------------
been approved by a vote of at least a majority (as defined in the Act) of the
outstanding voting securities of the Fund.
1
<PAGE>
4. Director Approval. This Plan shall not take effect until it has been
-----------------
approved, together with any related agreements, by votes of a majority of both
(a) the Directors of the Fund and (b) those Directors of the Fund who are not
"interested persons" of the Fund (as defined in the Act) and have no direct or
indirect financial interest in the operation of this Plan or any agreements
related to it (the "Rule 12b-1 Directors"), cast in person at a meeting (or
meetings) called for the purpose of voting on this Plan and such related
agreements.
5. Annual Reapproval. Unless sooner terminated pursuant to paragraph 6,
-----------------
this Plan shall continue in effect for so long as such continuance is
specifically approved at least annually in the manner provided for approval of
this Plan in paragraph 4.
6. Termination of Plan. This Plan may be terminated at any time by a
-------------------
vote of a majority of the Rule 12b-1 Directors, or by vote of a majority of the
Fund's outstanding shares.
7. Amendments. This Plan may not be amended to increase materially the
----------
amount of distribution expenses provided for in paragraph 2 hereof unless such
amendment is approved in the manner provided for shareholder approval in
paragraph 3 hereof, and no material amendment to the Plan shall be made unless
approved in the manner provided for approval in paragraph 4 hereof.
8. Quarterly Reports. Any person authorized to direct the disposition of
-----------------
monies paid or payable by the Fund pursuant to this Plan or any related
agreements shall provide to the Directors of the Fund, and the Directors shall
review at least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made. Unless directed otherwise by
the Directors with respect to a particular expenditure or type of expenditure,
any expenditure made by Berger Associates which jointly promotes the sale of
shares of the Fund and the sale of shares of other investment companies for
which Berger Associates serves as investment adviser, and which expenditures are
not readily identifiable as related to the Fund or one or more of such other
investment companies, shall be allocated to the Fund and such other investment
companies on a basis such that the Fund will be allocated only its proportional
share of such expenditures based upon the relative net assets of the Fund as
compared to the net assets of all such other investment companies thus promoted.
9. Selection and Nomination of Directors. While this Plan is in effect,
-------------------------------------
the selection and nomination of Directors who are not interested persons (as
defined in the Act) of the Fund
2
<PAGE>
shall be committed to the discretion of the Directors who are not interested
persons of the Fund.
10. Records. The Fund shall preserve copies of this Plan and any related
-------
agreements and all reports made pursuant to paragraph 8 hereof for a period of
not less than six years from the date of this Plan, or the agreements or such
reports, as the case may be, and shall preserve the Plan, agreement or report
the first two years in an easily accessible place.
IN WITNESS WHEREOF, the Fund has executed this 12b-1 Plan as of the day and
year set forth below in Denver, Colorado.
Date: ____________, 1994
THE ONE HUNDRED FUND, INC.
ATTEST:
By
- ----------------------------- -------------------------------
, President
--------------------
3
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000074532
<NAME> THE ONE HUNDRED FUND, INC.
<SERIES>
<NUMBER> 011
<NAME> ONE HUNDRED FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<INVESTMENTS-AT-COST> 1269783281
<INVESTMENTS-AT-VALUE> 1207708215
<RECEIVABLES> 90891896
<ASSETS-OTHER> 11249
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1298611360
<PAYABLE-FOR-SECURITIES> 1565050
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 10218064
<TOTAL-LIABILITIES> 11783114
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1254827564
<SHARES-COMMON-STOCK> 107324847
<SHARES-COMMON-PRIOR> 88266647
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 157522
<ACCUMULATED-NET-GAINS> 94233270
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (62075066)
<NET-ASSETS> 1286828246
<DIVIDEND-INCOME> 9801588
<INTEREST-INCOME> 7084499
<OTHER-INCOME> 0
<EXPENSES-NET> 23449036
<NET-INVESTMENT-INCOME> (6562949)
<REALIZED-GAINS-CURRENT> 104647304
<APPREC-INCREASE-CURRENT> (344876495)
<NET-CHANGE-FROM-OPS> (246792140)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 600637304
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 19158620
<NUMBER-OF-SHARES-REDEEMED> 42694648
<SHARES-REINVESTED> 42594228
<NET-CHANGE-IN-ASSETS> (612219521)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 590223270
<OVERDISTRIB-NII-PRIOR> 93723
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12939172
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 23862354
<AVERAGE-NET-ASSETS> 1725325048
<PER-SHARE-NAV-BEGIN> 21.51
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> (2.57)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 6.95
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.99
<EXPENSE-RATIO> 1.38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
