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FPA PARAMOUNT FUND, INC.
SUPPLEMENT DATED DECEMBER 1, 2000 TO PROSPECTUS DATED FEBRUARY 1, 2000
THE SECTION "SHAREHOLDER FEES" UNDER THE CAPTION "FEES AND EXPENSES OF THE FUND"
IS REVISED AS FOLLOWS, EFFECTIVE JANUARY 1, 2001:
<TABLE>
<S> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum Sales Load Imposed on Purchases (as a percentage
of offering price).................................................... 5.25%
Maximum Deferred Sales Load (as a percentage of original sales
price or redemption proceeds, as applicable).......................... 1.00%*
Redemption Fee (as a percentage of amount redeemed)........................ None**
Exchange Fee............................................................... $5.00
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* The deferred sales load applies only to redemptions within one year of
purchase for investments of $1,000,000 or more made without a sales load at
the time of purchase. In addition, an account management fee is charged by
unaffiliated investment advisers or broker-dealers to certain accounts
entitled to purchase shares without sales charge.
** Redemptions by wire are subject to a $3.50 charge per wire.
THE SECTION "MANAGEMENT AND ORGANIZATION" IS SUPPLEMENTED AS FOLLOWS:
The Funds's investment adviser, First Pacific Advisors, Inc. ("Adviser"), is an
indirect wholly owned subsidiary of United Asset Management Corporation ("UAM").
UAM is a holding company principally engaged, through affiliated firms, in
providing institutional investment management. In September, 2000, UAM was
acquired by, and subsequently became a wholly owned subsidiary of Old Mutual
plc, a United Kingdom-based financial services group with substantial asset
management, insurance and banking businesses. On October 23, 2000, shareholders
of the Fund approved a new investment advisory agreement between the Adviser and
the Fund, identical to the prior agreement in all respects except for its
effective and termination dates.
(SEE REVERSE)
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THE SALES CHARGE TABLE IS REVISED AS FOLLOWS, EFFECTIVE JANUARY 1, 2001:
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<CAPTION>
Sales Sales Reallowed
Size of Investment Charge(1) Charge(2) to Dealers(2)
------------------ --------- --------- -------------
<S> <C> <C> <C>
Less than $50,000 5.54% 5.25% 5.00%
$50,000 but less than $100,000 4.71% 4.50% 4.25%
$100,000 but less than $250,000 3.90% 3.75% 3.50%
$250,000 but less than $500,000 2.56% 2.50% 2.25%
$500,000 but less than $1,000,000 1.52% 1.50% 1.50%
$1,000,000 and over 0.00%(3) 0.00%(3) 0.00%(4)
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(1) As a percentage of net amount invested.
(2) As a percentage of public offering price.
(3) No sales charge is payable on investments of $1 million or more. However, a
contingent deferred sales charge of 1% on the lesser of the purchase or
redemption price is imposed if, within one year of purchase, a redemption
reduces the account value to less than the original investment. Such
contingent deferred sales charge is withheld from the redemption proceeds
and paid to FPA Fund Distributors, Inc. ("Distributor").
(4) The Distributor will pay a dealer concession for orders of $1 million or
more equal to 0.50% of the purchase price.
THE SECTION "PURCHASES NOT SUBJECT TO SALES CHARGE" IS SUPPLEMENTED AS FOLLOWS,
EFFECTIVE JANUARY 1, 2001 TO MARCH 31, 2001:
During the period January 1, 2001 to March 31, 2001, shares may be purchased at
net asset value by accounts opened for investors by dealers in an amount not
exceeding the proceeds received within the prior 30 days from a redemption of
shares of another mutual fund which was purchased with a sales charge.
Certification by the dealer of the qualifying redemption is required.
THE FIRST TWO PARAGRAPHS UNDER "EXCHANGE OF SHARES AND SHAREHOLDER SERVICES" IS
REVISED AS FOLLOWS, EFFECTIVE JANUARY 1, 2001:
EXCHANGING YOUR SHARES FOR SHARES OF OTHER FPA FUNDS. You can exchange your
shares of the Fund for shares of other FPA Funds, namely FPA Capital Fund, Inc.,
FPA New Income, Inc. and FPA Perennial Fund, Inc. You can increase an existing
account or start a new account in the selected FPA Fund. Shares of the Fund
acquired must be registered for sale in your state. A $5.00 service fee applies
to each exchange.
EXCHANGING YOUR SHARES FOR SHARES OF A MONEY MARKET FUND. The Distributor has
made arrangements to allow you to exchange your shares for shares of the money
market portfolio of the Cash Equivalent Fund, a no-load diversified money market
mutual fund. Shares of the money market fund you acquire through exchange plus
any shares acquired by reinvestment of dividends and distributions may be
re-exchanged for shares of any FPA Fund without a sales charge. If your shares
are held in a Fund-sponsored individual retirement account, you cannot exchange
them into shares of the money market fund. The $5.00 exchange fee is paid by the
Distributor, which receives a fee from Kemper Financial Services, the
administrator of the money market fund, of 0.15 of 1% per year or more of the
average daily net asset value of shares of the money market fund acquired
through this exchange program. The money market fund is not an FPA Fund and is
separately managed. The fact that you have the ability to exchange your shares
for shares of the money market fund is not a Fund recommendation of the money
market fund.
(SEE REVERSE)
