As filed with the Securities and Exchange Commission on May 24, 1996
Securities Act Registration No. 2-99429
Investment Company Act Registration No. 811-4374
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
STRONG MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
(Address of Principal Executive Offices:
Number, Street, City, State, Zip Code)
(414) 359-3400
(Area Code and Telephone Number)
Thomas P. Lemke, Esq.
Strong Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
(Name and Address of Agent for Service)
Copies to:
Jane A. Kanter, Esq.
Katten Muchin & Zavis
1025 Thomas Jefferson Street, N.W.
East Lobby, Suite 700
Washington, D.C. 20007
No filing fee is required because an indefinite number
of shares have previously been registered, pursuant to
Rule 24f-2 under the Investment Company Act of 1940, by a
declaration included on its Form N-1A Registration Statement
filed with the Securities and Exchange Commission on or about
August 5, 1985. The Registrant's Rule 24f-2 Notice for
the ten-month fiscal year ended October 31, 1995 was filed
on or about November 14, 1995. Pursuant to Rule 429
under the Securities Act of 1933, this Registration
Statement relates to shares previously registered on the
aforesaid Form N-1A Registration Statement.
It is proposed that this filing will become effective
on June 23, 1996, pursuant to Rule 488 under the
Securities Act of 1933.
<PAGE>
STRONG MONEY MARKET FUND, INC.
FORM N-14
Cross Reference Sheet
Pursuant to Rule 481(a) under the Securities Act of 1933
Location in Combined Proxy Statement
Item No. and Prospectus
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Part A
1.Cover Page Cover Page
2.Beginning and Table of Contents
Outside Back
Cover Page
3.Synopsis and Risk Summary; Risk Considerations
Factors
4.Information About Summary; 1. To Approve or Disapprove of the
the Transaction Reorganization Agreement; 2. To Approve or
Disapprove of the Proposed Amendment; Comparison
of the Treasury Fund and the Money Fund
5.Information About the Summary; 1. To Approve or Disapprove of the
Registrant Reorganization Agreement; Additional Information
About SIF and Each Fund
6.Information About Summary; 1. To Approve or Disapprove of the
the Company Being Reorganization Agreement; 2. To Approve or
Acquired Disapprove of the Proposed Amendment; Additional
Information About SIF and Each Fund
7.Voting Information Summary; Information Relating to Voting Matters
8.Interest of Certain Additional Information About SIF and Each Fund
Persons and Experts
9.Additional Not Applicable
Information Required
for Reoffering by
Persons Deemed to be
Underwriters
Part B
10.Cover Page Cover Page
11.Table of Contents Cover Page
12.Additional Statement of Additional
Information About Information of the Money Fund,
the Registrant dated March 1, 1996, incorporated
by reference
13.Additional Statement of Additional
Information About Information of the Treasury Fund,
the Company Being dated May 1, 1996, incorporated
Acquired by reference
14.Financial Statements Annual Report of the Money Fund, dated October
31, 1995, incorporated by reference; Annual
Report of the Treasury Fund, dated
December 31, 1995, incorporated by reference
<PAGE>
Part C
15.Indemnification Indemnification
16.Exhibits Exhibits
17.Undertakings Undertakings
<PAGE>
[EXAMPLE OF A LETTER TO SHAREHOLDERS]
Dear Shareholder:
The enclosed Combined Proxy Statement and Prospectus
contains an important proposal for your consideration as
a shareholder of the Strong U.S. Treasury Money Fund (the
"Treasury Fund"). Your Board of Directors has proposed
that the Treasury Fund be merged into the Strong Money
Market Fund, Inc. (the "Money Fund"). If approved by the
shareholders of the Treasury Fund, the Treasury Fund's
assets will be liquidated and substantially all of the
liquidation proceeds (less a reserve for liabilities)
will be exchanged for shares of the Money Fund on August
30, 1996 (the "Closing Date"). On that date, your
Treasury Fund shares will be exchanged for an equal
dollar-amount of Money Fund shares.
The Treasury Fund was designed to seek current income, a
stable share price, and daily liquidity. In seeking to
achieve that objective, the Treasury Fund has invested
only in securities issued directly by the U.S.
Government. Because other money market funds may invest
in other types of money market securities, they have been
able to obtain higher returns for their shareholders.
One result is that investor interest in the Treasury Fund
has lagged its competitive universe.
In light of the Treasury Fund's comparatively small asset
size, lack of expected asset growth, and lack of
economies of scale, the Board of Directors determined
that it would be appropriate to reorganize the Treasury
Fund into the larger Money Fund. The Money Fund was
considered to be the most appropriate fund because it has
the same investment objectives, substantially similar
investment policies and restrictions and is managed by the
same portfolio manager. The Money Fund also offers competitive
rates of return and lower expense ratios than the Treasury Fund.
FOR THESE REASONS, THE BOARD OF DIRECTORS
STRONGLY URGES YOU TO VOTE FOR THE PROPOSED
REORGANIZATION AND FOR THE RELATED PROPOSAL
TO AMEND THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF THE STRONG
INCOME FUNDS, INC.
The enclosed materials provide more information about the
proposals. Please read this information carefully and
call us if you have any questions. Our toll free number
is 1-800-368-3863.
Please know that your vote is important, no matter how
many shares you own. By voting your shares early you
will help us avoid costly follow-up mailings and
telephone solicitations.
After reviewing the enclosed materials, we ask that
you vote FOR this proposed reorganization and related
Articles of Amendment by completing, dating, and
signing your proxy card, and mailing it to us today.
Sincerely,
Richard S. Strong
Chairman
<PAGE>
[PRELIMINARY COPY]
STRONG INCOME FUNDS, INC. - STRONG U.S. TREASURY MONEY FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders
of the Strong U.S. Treasury Money Fund (the "Treasury Fund"),
a series of the Strong Income Funds, Inc. ("SIF"), will be held
at 100 Heritage Reserve, Menomonee Falls, Wisconsin 53051, on
Tuesday, August 27, 1996, at 8:00 a.m., Central Time, to consider
and act upon the proposals noted below and to transact such other
business as may properly come before the Special Meeting
or any adjournments thereof.
1. To approve or disapprove an Agreement and Plan
of Reorganization by and among SIF, on behalf of
the Treasury Fund and the Strong Money Market
Fund, Inc. (the "Money Fund"), and Strong Capital
Management, Inc., and the transactions contemplated thereby.
2. To approve or disapprove an amendment to
SIF's Amended and Restated Articles of Incorporation
(a) to cancel all of the outstanding shares of the
Treasury Fund and convert them into rights to receive
shares of the Money Fund in accordance with the
Reorganization Agreement and (b) to eliminate all of
SIF's common stock that constitute the shares of the
Treasury Fund. Such amendment shall be subject to the
approval of Proposal 1 above by the Treasury Fund's shareholders.
Only shareholders of record at the close of business on June 18, 1996,
the record date for this Special Meeting, shall be entitled to vote at the
Special Meeting or any adjournments thereof.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
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AS A SHAREHOLDER OF THE TREASURY FUND, YOU
ARE ASKED TO ATTEND THE SPECIAL MEETING EITHER
IN PERSON OR BY PROXY. IF YOU ARE UNABLE TO
ATTEND THE SPECIAL MEETING IN PERSON, WE URGE
YOU TO COMPLETE, SIGN, DATE, AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE
PREPAID ENVELOPE. YOUR PROMPT RETURN OF THE
PROXY WILL HELP ASSURE A QUORUM AT THE
SPECIAL MEETING AND AVOID ADDITIONAL
EXPENSES TO THE TREASURY FUND ASSOCIATED
WITH FURTHER SOLICITATION. SENDING IN YOUR
PROXY WILL NOT PREVENT YOU FROM VOTING YOUR
SHARES IN PERSON AT THE SPECIAL MEETING AND
YOU MAY REVOKE YOUR PROXY BY ADVISING THE
SECRETARY OF THE FUNDS IN WRITING
(BY SUBSEQUENT PROXY OR OTHERWISE) OF
SUCH REVOCATION AT ANY TIME BEFORE IT
IS VOTED.
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By Order of the Board of Directors,
ANN E. OGLANIAN
Secretary
Menomonee Falls, Wisconsin
July 3, 1996
<PAGE>
[PRELIMINARY COPY]
STRONG MONEY MARKET FUND, INC.
STRONG INCOME FUNDS, INC. - STRONG U.S. TREASURY MONEY FUND
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
Telephone: (414) 359-1400
Toll Free: (800) 368-3863
Device for the Hearing Impaired: (800) 999-2780
COMBINED PROXY STATEMENT AND PROSPECTUS
Dated July 3, 1996
This Combined Proxy Statement and Prospectus is furnished in connection
with the solicitation of proxies by the Board of Directors of the Strong
Income Funds, Inc. ("SIF") in connection with the Special Meeting
(the "Special Meeting") of Shareholders of the Strong U.S. Treasury Money
Fund, a series of SIF (the "Treasury Fund"), to be held at 100 Heritage
Reserve, Menomonee Falls, Wisconsin 53051 on Tuesday, August 27, 1996, at
8:00 a.m. Central Time. At the Special Meeting, the shareholders of the
Treasury Fund will be asked to approve or disapprove the following two
proposals:
1. an Agreement and Plan of Reorganization, dated May 24, 1996
(the "Reorganization Agreement"), by and among SIF, on behalf
of the Treasury Fund, the Strong Money Market Fund, Inc.
(the "Money Fund") and, with respect to certain matters,
Strong Capital Management, Inc. (the "Advisor"), and the
transactions contemplated thereby (the "Reorganization"); and
2. an amendment to the Amended and Restated Articles of
Incorporation of SIF (the "Proposed Amendment") required in
connection with the Reorganization. Such Amendment shall be
subject to the approval of Proposal 1 above by the Treasury
Fund's shareholders.
SIF and the Money Fund are open-end management investment companies.
The Treasury Fund is one of the two investment portfolios of SIF, interests
in which portfolios are represented by separate series of SIF's shares. SIF's
Board of Directors, including the non-interested Directors, has determined
that it is in the best interests of the Treasury Fund and its shareholders for
the Treasury Fund to be reorganized into the Money Fund. In reaching that
determination, the Board of Directors considered the small asset size, the
lack of expected asset growth of the Treasury Fund, and the problems related
to the lack of economies of scale. The Board of Directors concluded that each
of these disadvantages would be addressed, to different degrees, by the
Reorganization as a result of combining the assets of the Treasury Fund with
the assets of the Money Fund. Further, the Board of Directors concluded that,
among other advantages, the Reorganization will provide Treasury Fund
shareholders with an investment vehicle that has the same investment
objectives, substantially similar policies and restrictions, and the same
portfolio manager as the Treasury Fund and is likely both to reduce the
expense ratios affecting Treasury Fund shareholders and to provide a
competitive rate of return.
<PAGE>
The Reorganization Agreement provides that, by the closing date for the
Reorganization (the "Closing Date"), which is currently scheduled to take
place on August 30, 1996, the Treasury Fund will liquidate its portfolio,
securities and instruments, and to the extent reasonably possible, its other
property and assets, and that on the Closing Date the proceeds of that
liquidation and any remaining property and assets of the Treasury Fund (less
a reserve for certain expenses and liabilities) will be transferred to the
Money Fund. In exchange, the Money Fund will simultaneously issue its
shares ("Money Fund Shares") to the Treasury Fund. The Treasury Fund will
then make a liquidating distribution of the Money Fund Shares so received to
the shareholders of the Treasury Fund, so that a holder of shares of the
Treasury Fund ("Treasury Fund Shares") on the Closing Date will receive that
number of full and fractional Money Fund Shares having a value equal to the
value of the shareholder's Treasury Fund Shares immediately before the
Closing Date.
In addition, with respect to the Proposed Amendment, the Reorganization
Agreement provides that upon the closing of the Reorganization, all of the
outstanding shares of the Treasury Fund will be canceled and converted into
rights to receive the liquidating distribution of Money Fund Shares
contemplated under the Reorganization Agreement, and SIF's Amended and
Restated Articles of Incorporation will be amended to eliminate all of SIF's
shares that currently constitute the Treasury Fund Shares. If shareholders
approve the Proposed Amendment but do not approve the Reorganization
Agreement, or if for any other reason the Reorganization is not completed,
the Proposed Amendment will not go into effect.
This Combined Proxy Statement and Prospectus sets forth concisely the
information that a shareholder of the Treasury Fund should know before voting
on the Reorganization Agreement (and the transactions contemplated thereby)
and the Proposed Amendment, and should be retained for future reference. The
Reorganization Agreement is attached to this Combined Proxy Statement and
Prospectus as Exhibit A and is incorporated herein by reference.
A prospectus for the Money Fund dated March 1, 1996, which describes the
investment program and operation of the Money Fund, accompanies this Combined
Proxy Statement and Prospectus. (A prospectus for the Treasury Fund, dated
May 1, 1996, was previously provided to each Treasury Fund shareholder.)
Additional information concerning the Money Fund and the Treasury Fund is set
forth in the Statement of Additional Information for each Fund, dated March 1,
1996, and May 1, 1996, respectively. Moreover, further information concerning
the matters considered herein is set forth in the Statement of Additional
Information, dated July 3, 1996. Each of these documents is on file with the
Securities and Exchange Commission ("SEC"), and is available without charge
upon oral or written request by writing or calling the Treasury Fund or Money
Fund at the address and telephone numbers shown on the cover page of this
Combined Proxy Statement and Prospectus, or by calling toll-free at
(800) 368-3863. The information contained in each of these prospectuses
and Statements of Additional Information is incorporated herein by reference.
The Combined Proxy Statement and Prospectus constitutes the proxy
statement of the Treasury Fund for the Special Meeting of Shareholders
and the prospectus for the Money Fund Shares, which have been registered
with the SEC and are to be issued in connection with the Reorganization.
<PAGE>
The Notice, this Combined Proxy Statement and Prospectus, and the
accompanying proxy are expected to first be sent to shareholders of the
Treasury Fund on or about July 3, 1996.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS COMBINED PROXY STATEMENT
AND PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY
STATEMENT AND PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED
HEREIN BY REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
SIF, THE TREASURY FUND, THE MONEY FUND, THE ADVISOR, OR THE FUNDS'
DISTRIBUTOR, STRONG FUNDS DISTRIBUTORS, INC.
VOTES REQUIRED: PROPOSALS 1 AND 2 SHALL BE APPROVED BY THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING TREASURY FUND SHARES.
<PAGE>
TABLE OF CONTENTS
Page
SUMMARY
Proposed Reorganization and Reorganization Agreement
Proposed Amendment
Reasons for Reorganization
Federal Income Tax Consequences
Overview of the Treasury Fund and the Money Fund
Investment Objectives and Policies
Certain Service Provider Arrangements
Comparative Fee Table
Organization and Purchase and Redemption Policies
Risk Considerations
1. TO APPROVE OR DISAPPROVE THE REORGANIZATION AGREEMENT
Description of the Reorganization Agreement
Board Consideration
Capitalization
Federal Income Tax Consequences
Comparison of the Treasury Fund and the Money Fund
Investment Objectives and Policies
Investment Limitations
Purchase and Redemption Information, Exchange
Privileges, Distributions, Pricing, and Organization
Other Information
2. TO APPROVE OR DISAPPROVE THE PROPOSED AMENDMENT
Description of the Proposed Amendment
Board Consideration
INFORMATION RELATING TO VOTING MATTERS
General Information
Shareholder and Board Approvals
Appraisal Rights
Quorum
Annual Meetings
<PAGE>
ADDITIONAL INFORMATION ABOUT SIF AND EACH FUND
Directors and Officers
Financial Information for the Treasury Fund
Financial Information for the Money Fund
FINANCIAL STATEMENTS
OTHER BUSINESS
SHAREHOLDER INQUIRIES
Exhibit A: Agreement and Plan of Reorganization
Exhibit B: Advisor's Investment Review for the Funds
Exhibit C: Proposed Amendment to Amended and Restated
Articles of Incorporation of the Strong Income
Funds, Inc.
<PAGE>
SUMMARY
The following is a summary of certain information relating to the
proposed Reorganization, the Reorganization Agreement, the parties
thereto, the transactions contemplated thereby and the Proposed
Amendment, and is qualified by reference to the more complete
information contained elsewhere in this Combined Proxy Statement
and Prospectus and the Statement of Additional Information hereto,
the Prospectus and Statement of Additional Information of each Fund, and
the Reorganization Agreement dated May 24, 1996, attached to this
Combined Proxy Statement and Prospectus as Exhibit A.
PROPOSED REORGANIZATION AND
REORGANIZATION AGREEMENT.
Based upon their evaluations of the relevant information presented
to them, and in light of their fiduciary duties under federal and state
law, the Funds' Boards of Directors, including all of the non-interested
Directors, have determined that the proposed Reorganization is in the best
interests of the shareholders of each Fund. SIF's Board of Directors
recommends the approval of the Reorganization Agreement by the shareholders
of the Treasury Fund at the Special Meeting.
Subject to shareholder approval, the Reorganization Agreement provides
for: (a) the liquidation of the Treasury Fund's portfolio, securities and
instruments and, to the extent reasonably possible, its other property and
assets by no later than the time of the closing of the Reorganization
("Closing Time"); (b) the transfer to the Money Fund of the liquidation
proceeds and any remaining property and assets of the Treasury Fund
(less a reserve for certain expenses and liabilities) (the "Treasury Fund
Net Assets") in exchange for Money Fund Shares equal in value to the
Treasury Fund Net Assets; (c) the distribution of the Money Fund Shares
to the shareholders of the Treasury Fund in liquidation of the Treasury
Fund; and (d) the cancellation of all outstanding Treasury Fund Shares
and the elimination of all SIF's shares that currently constitute the
Treasury Fund Shares.
As a result of the proposed Reorganization, each shareholder of the
Treasury Fund will become a shareholder of the Money Fund and will hold,
immediately after the Closing Date, Money Fund Shares having a net asset
value equal to the net asset value of the Treasury Fund Shares held by the
shareholder immediately before the Closing Date.
For further information, see "1. To Approve or Disapprove the
Reorganization Agreement -- Description of the Reorganization Agreement."
PROPOSED AMENDMENT.
Based upon their evaluation of the information presented to them, and
in light of their fiduciary duties, the Board of Directors of SIF,
including all of the non-interested Directors, have determined that SIF's
Amended and Restated Articles of Incorporation should be amended in
conjunction with shareholder approval of the Reorganization Agreement
in order to effect the two purposes noted below. First, to cancel all of
the outstanding shares of the Treasury Fund and to convert them into rights
to receive the liquidating distribution of Money Fund Shares contemplated
under the Reorganization Agreement. Second, to eliminate that class of
SIF's shares that constitutes the Treasury Fund Shares. In considering
this matter, SIF's Board of Directors was advised that the Proposed
Amendment is necessary in order to effect the two purposes stated
above.
<PAGE>
If the shareholders approve the Proposed Amendment but do not approve
the Reorganization Agreement, or if for any other reason the Reorganization
is not completed, the Proposed Amendment will not go into effect. Moreover,
if shareholders approve the Reorganization but do not approve the Proposed
Amendment, the outstanding shares of the Treasury Fund will not be canceled
and automatically converted into rights to receive the liquidating
distribution of Money Fund shares contemplated by the Reorganization
Agreement.
For further information, see "2. To Approve or Disapprove the Proposed
Amendment."
REASONS FOR REORGANIZATION.
In light of certain potential benefits and other factors, SIF's Board of
Directors, including the non-interested Directors, has determined that it is
in the best interests of the Treasury Fund and its shareholders to reorganize
into the Money Fund. In making such determination, the Board of Directors
considered, among other things, the small asset size and lack of expected
asset growth of the Treasury Fund, and the resulting problems associated
with the inability to achieve adequate economies of scale, including
relatively high expense ratios, as described more fully below under "Board
Consideration". The Board of Directors felt that each of these problems
would be addressed to different degrees by the Reorganization.
In addition, among other advantages, SIF's Board of Directors felt that
the Reorganization would: (a) provide an investment option that has the same
investment objectives, substantially similar investment policies and
restrictions, and the same portfolio manager as the Treasury Fund; and
(b) likely reduce the overall expense ratios for the Treasury Fund's
shareholders. Moreover, the Board of Directors noted that while the
Reorganization will not qualify as a tax-free reorganization under the
Internal Revenue Code, as amended (the "Code"), for the reasons discussed
below it is expected to have minimal tax consequences. The Board of Directors
also considered the possible risks and disadvantages of the Reorganization
and determined that the Reorganization is likely to provide benefits to
the Treasury Fund and its shareholders that outweigh any possible risks and
disadvantages of the Reorganization. Finally, SIF's Board of Directors
concluded that there are no significant risks or disadvantages to the
Treasury Fund or its shareholders from the Reorganization and that the
interests of the Treasury Fund's shareholders would not be diluted.
Similarly, the Board of Directors of the Money Fund, in approving the
Reorganization, determined that it would be advantageous for the Money Fund
and its current shareholders to acquire substantially all of the
assets of the Treasury Fund in exchange for Money Fund Shares and that
the interests of the Money Fund's existing shareholders would not be diluted.
<PAGE>
The Reorganization will not qualify as a tax-free reorganization under the
Code. However, in view of the fact that the Reorganization will involve two
money market funds, it is expected to have minimal tax consequences for the
Funds and for each Fund's shareholders. For further information, see "1.
To Approve or Disapprove the Reorganization Agreement - Federal Income Tax
Consequences."
OVERVIEW OF THE TREASURY FUND AND THE MONEY FUND.
Investment Objectives and Policies. The investment objectives of the
Funds are the same and the investment policies and restrictions of the Funds
are substantially similar. Each Fund seeks current income, a stable share
price, and daily liquidity. The Funds are designed for investors who seek
money market yields with no anticipated fluctuations in principal. Each Fund
restricts its investments to instruments that meet certain maturity and
quality standards required or permitted by Rule 2a-7 under the Investment
Company Act of 1940 (the "1940 Act.") Because each Fund seeks to maintain a
constant net asset value of $1.00 per share, capital appreciation is not
expected to play a role in either Fund's returns, and dividend income alone
will provide its entire investment return.
The primary distinction between the Funds is that while both restrict their
investments to meet the maturity and quality standards of Rule 2a-7 under the
1940 Act, the Treasury Fund invests only in securities issued directly by the
U.S. Government, whereas the Money Fund invests in high-quality corporate,
bank, and government instruments that present minimal credit risk. More
specifically, the Treasury Fund invests only in the highest-quality U.S.
Government securities issued directly by the U.S. Treasury Department,
including: Treasury bills, Treasury notes and Treasury bonds. The Money Fund
invests only in high-quality corporate, bank and government issued money
market instruments. At least 95% of the Money Funds' total assets are
invested in "first-tier" securities and the balance of its portfolio are
invested in "second-tier" securities. First-tier securities are those
securities that, at the time of acquisition, are rated in the highest rating
category by at least two nationally recognized statistical rating organizations
("NRSROs").
Another distinction between the Funds is that under federal law, the
interest income earned from U.S. Treasury securities is exempt from state
and local taxes. As a result, the Treasury Fund's distributions to its
shareholders may be exempt in whole or part from state and local taxes
depending on the conditions imposed in certain states. (See "Comparison of
the Treasury Fund and the Money Fund - Purchase and Redemption Information,
Exchange Privileges, Distributions, Pricing and Organization" below for
further information about the tax exempt nature of distributions relating to
U.S. Treasury securities.)
See "Summary - Risk Considerations" and "Comparison of the Treasury Fund
and the Money Fund - Investment Objectives and Policies" below for a
further description of the similarities and differences between the
investment objectives, policies, and risks of the Treasury Fund and the
Money Fund.
<PAGE>
Certain Service Provider Arrangements. The Advisor serves as investment
adviser for both Funds and is entitled to receive a monthly advisory fee
from each Fund, computed on the basis of each Fund's average daily net asset
value at the following annual rates:
Advisory Fee
(% of average
Fund daily net asset value)
---- ----------------------
Treasury Fund .40%
Money Fund .50%
Attached as Exhibit B to this Combined Proxy Statement and Prospectus are
copies of the Advisor's Investment Review for the Funds, which appeared in
the Treasury Fund's Annual Report for the fiscal year ended December 31, 1995,
and in the Money Fund's Annual Report for the ten months ended October 31,
1995.
The Advisor also serves as transfer agent and dividend disbursing agent
for the Funds. In the case of both Funds, the Advisor is compensated based
on an annual fee of $32.50 per open account, plus out-of-pocket expenses.
The Advisor also receives an annual fee per closed account of $4.20. The fees
received and the services provided as transfer agent and dividend
disbursing agent are in addition to those received and provided by the
Advisor in its capacity as investment adviser to the Funds. In addition,
the Advisor provides certain printing and mailing services for the Funds.
From time to time, the Funds, directly or indirectly through arrangements
with the Advisor, may pay amounts to third parties that provide transfer
agent and other administrative services relating to the Funds to persons who
beneficially own interests in the Funds. In such cases, the Funds will not
pay fees based on the number of beneficial owners at a rate that is greater
than the rate the Funds are currently paying the Advisor for providing these
services to Fund shareholders.
Custodial services are provided to the Funds by Firstar Trust Company.
With respect to the Money Fund only, the Custodian has entered into a sub-
custodial arrangement with First National Bank of Chicago with respect to
certain U.S. dollar-denominated foreign money market securities purchased
by the Money Fund.
Strong Funds Distributors, Inc. (the "Distributor"), an indirect subsidiary
of the Advisor, serves as the distributor of each Fund's shares. Since
the Funds are "no load" funds, no sales commissions are charged on the
purchase of Fund shares. The Distributor bears certain printing, advertising,
and other costs attributable to the distribution of each Fund's shares.
Comparative Fee Table: The following table sets forth the current fees and
expenses of the Treasury Fund as of December 31, 1995, and of the Money Fund
as of October 31, 1995. Excluding extraordinary expenses, the current fees
and expenses of the Money Fund are expected to remain unchanged as a result
of the Reorganization.
<PAGE>
Annual Fund Operating Expenses
(as a percentage of average daily net assets)
Treasury Fund Money Fund
------------- ----------
Management Fees 0.40% 0.50%
12b-1 Fees NONE NONE
Other Operating Expenses 0.54% 0.23%
Total Fund Operating Expenses* 0.94% 0.73%
*From time to time, the Advisor may voluntarily waive its management fee
and/or absorb certain expenses for the Funds. During each Fund's prior fiscal
year, the Advisor waived a portion of its management fee and absorbed certain
expenses. Therefore, the other operating expenses for the Funds have been
restated for the periods specified above to include such management fees
and/or expenses. THE ACTUAL TOTAL FUND OPERATING
EXPENSES INCURRED FOR THE TREASURY FUND AND THE
MONEY FUND DURING EACH FUND'S PRIOR FISCAL YEAR,
AFTER WAIVER AND ABSORPTIONS, WERE 0.76% AND 0.04%,
RESPECTIVELY. Excluding extraordinary expenses, each Fund's
"Total Operating Expenses" as indicated above is substantially
consistent with its current operating expenses.
EXAMPLE:* An investor in the Treasury Fund or the Money Fund
would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return, and
(2) redemption at the end of the following periods.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Treasury Fund $10 $30 $52 $115
Money Fund $ 7 $23 $41 $ 91
* The Example is based on each Fund's "Total Fund Operating Expenses"
before any waivers and absorptions, as described above. PLEASE
REMEMBER THAT THE EXAMPLE SHOULD NOT BE
CONSIDERED AS REPRESENTATIVE OF PAST OR FUTURE
EXPENSES AND THAT ACTUAL EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN. The assumption
in the Example of 5% annual return is required by regulations
of the SEC applicable to all mutual funds. The assumed 5% annual
return is not a prediction of, and does not represent, the projected or
actual performance of a Fund's shares.
Organization and Purchase and Redemption Policies. The Treasury Fund is a
series of common stock of SIF, a Wisconsin corporation. The Money Fund is a
Wisconsin corporation. The purchase, redemption, dividend, and other practices
and procedures, including exchange rights, of the Funds are virtually
identical, as described further below under "Comparison of the Treasury Fund
and the Money Fund."
RISK CONSIDERATIONS.
The risks involved in investing in each Fund are in many respects similar,
given the similarities in the investment objectives and the types of
securities in which they may invest. There are differences, however, between
certain of the risk factors associated with the Treasury Fund and the risk
factors associated with the Money Fund.
<PAGE>
Issuer Creditworthiness. Both Funds may only invest in high-quality
securities that present minimal credit risk, provided that they meet the
quality and maturity standards of Rule 2a-7 under the 1940 Act. While all
money market instruments can change in value for various reasons, including
changes in interest rates, unlike the Treasury Fund the instruments in which
the Money Fund invests may be subject to the risk of changes in the
creditworthiness of the issuer.
Mortgage and Asset-backed Securities. The Money Fund may invest in
mortgage and asset-backed securities that meet the maturity and quality
criteria specified in Rule 2a-7 under the 1940 Act. The yield characteristics
of mortgage and asset-backed securities differ from those of traditional debt
obligations. Among the principal differences are that interest and principal
payments are made more frequently on mortgage and asset-backed securities,
usually monthly, and that principal may be prepaid at any time, because the
underlying loans or assets generally may be prepaid at any time. Changes
in the actual or expected prepayment rate will affect the yield to maturity
of these securities. Moreover, if the Money Fund purchases these securities
at a premium, accelerated prepayments may cause a loss of principal, if the
premium has not been fully amortized at the time the principal is repaid
in full.
The Money Fund also may invest in stripped mortgage- or asset-backed
securities, which receive differing proportions of the interest and principal
payments from the underlying assets. The market value of such securities
generally is more sensitive to changes in prepayment and interest rates
than is the case with traditional mortgage- and asset-backed securities,
and in some cases the market value may be extremely volatile.
Foreign Securities. The Money Fund may invest up to 25% of its net assets
in U.S. dollar denominated foreign money market instruments. Foreign
investments involve special risks, including: expropriation, confiscatory
taxation, and withholding taxes on dividends and interest; less extensive
regulation of foreign brokers, securities markets, and issuers; less
publicly available information and different accounting standards; possible
delays in settlement in foreign securities markets, limitations on the use or
transfer of assets, and difficulty of enforcing obligations in other
countries; and diplomatic developments and political or social
instability. In addition, many foreign money market instruments may
be less liquid and their prices more volatile than comparable U.S.
securities.
1. TO APPROVE OR DISAPPROVE THE REORGANIZATION AGREEMENT
The terms and conditions under which the Reorganization may be consummated
are set forth in the Reorganization Agreement. Significant provisions of
the Reorganization Agreement are summarized below; however, this summary is
qualified in its entirety by reference to the Reorganization Agreement, a
copy of which is attached as Exhibit A to this Combined Proxy Statement and
Prospectus and incorporated herein by reference.
<PAGE>
DESCRIPTION OF THE REORGANIZATION AGREEMENT.
The Reorganization Agreement provides that, prior to the Closing Time, the
Treasury Fund will dispose of all of its portfolio securities and instruments
and, to the extent reasonably possible, liquidate its other property and
assets at their then-current fair market value, as determined in accordance
with the Treasury Fund's prospectus and Statement of Additional Information.
At the Closing Date, the Treasury Fund will transfer to the Money Fund, free
and clear of all liens, encumbrances, and claims, the liquidation proceeds and
all of the Treasury Fund's remaining property and assets, except for cash or
bank deposits (the "Reserve Account") in an amount necessary: (a) to pay its
costs and expenses of carrying out this Agreement (including but not limited
to fees of counsel and accountants, its income dividend payable prior to the
Closing Date, and expenses of its liquidation contemplated under the
Reorganization Agreement); (b) to discharge all of its unpaid liabilities on
its books and records at the Closing Date; and (c) to pay such contingent
liabilities, if any, that the Board of Directors of the Treasury Fund may
reasonably deem to exist against the Treasury Fund at the Closing Date.
(The liquidation proceeds and other property and assets to be transferred
to the Money Fund are referred to herein as the "Treasury Fund Net Assets.")
Upon the satisfaction or other resolution of all such liabilities and
obligations, any amount remaining from the Reserve Account will be
transferred to the Money Fund.
In exchange for the transfer to the Money Fund of the Treasury Fund Net
Assets as described, the Money Fund will simultaneously issue at the Closing
Date full and fractional Money Fund Shares to the Treasury Fund for
distribution pro rata by the Treasury Fund to its shareholders. The number
of Money Fund Shares so issued by the Money Fund will have an aggregate net
asset value equal to the value of the Treasury Fund Net Assets on the Closing
Date.
Following the close of business on the Closing Date, the Treasury Fund will
distribute pro rata to its shareholders the Money Fund Shares received by the
Treasury Fund in liquidation thereof. Each shareholder owning Treasury Fund
Shares at the Closing Date will receive an amount of Money Fund Shares
equal to the value of their Treasury Fund Shares, plus the right to receive
any dividends or distributions which were declared before the Closing
Date but that remained unpaid at that time on the Treasury Fund Shares.
The stock transfer books of the Treasury Fund will be permanently closed as
of the close of business on the day immediately preceding the Closing Date.
Redemption requests received thereafter by the Treasury Fund will be deemed
to be redemption requests for Money Fund Shares. If any Treasury Fund Shares
held by a former Treasury Fund shareholder are represented by a share
certificate, the certificate must be surrendered to the Money Fund's
transfer agent for cancellation, or verification of such certificate's loss
and indemnification with respect to such loss must be established, before
the Money Fund Shares issued to the shareholder in the Reorganization can be
redeemed or transferred.
The Reorganization with respect to the Treasury Fund is subject to a number
of conditions, including, among other things: (a) approval of the
Reorganization Agreement and the transactions contemplated thereby
described in this Combined Proxy Statement and Prospectus by the Treasury
Fund's shareholders; (b) the receipt of the legal opinion described in Section
7 of the Reorganization Agreement that the Money Fund Shares issued to
Treasury Fund shareholders in accordance with the terms of the
Reorganization Agreement will be validly issued, fully paid, and
non-assessable; (c) the receipt of certain certificates from the parties
concerning the continuing accuracy of the representations and
warranties in the Reorganization Agreement and other
matters; and (d) the parties' performance of their respective agreements
and undertakings in the Reorganization Agreement. Assuming satisfaction of
the conditions in the Reorganization Agreement, the Closing Date will be on
August 30, 1996, or such other date as is agreed to by the parties.
<PAGE>
The Reorganization Agreement provides that the parties shall each be
responsible for the payment of their own expenses incurred in connection
with the Reorganization (which expenses include the fees and disbursements of
attorneys and auditors, proxy printing, and solicitation expenses)
and any related transfer fees and brokerage fees.
The Reorganization Agreement and the Reorganization described herein
may be abandoned at any time prior to the Closing Date by the mutual
consent of the parties to the Reorganization Agreement. In such event, there
shall be no liability for damages on the part of either Fund, or their
respective Boards of Directors or officers, but each shall bear its own
expenses incidental to the preparation and carrying out of the
Reorganization Agreement. The Reorganization Agreement provides
further that at any time prior to or after approval of the Reorganization
Agreement by the Treasury Fund's shareholders, the Funds, by written
agreement, may amend, modify, or supplement the Reorganization Agreement.
The Reorganization Agreement further provides that no such amendment,
modification, or supplement may have the effect of changing the provisions
for determining the number of Money Fund Shares to be distributed to
Treasury Fund shareholders under the Reorganization Agreement to the
detriment of the Treasury Fund shareholders, unless the Treasury
Fund shareholders approve such change or unless the amendment merely changes
the Closing Date.
BOARD CONSIDERATION.
Based upon their evaluation of the relevant information presented to them,
and in light of their fiduciary duties under federal and state law, the
Board of Directors of the Treasury Fund has unanimously determined that
the proposed Reorganization is in the best interest of the shareholders of
the Treasury Fund, and recommends approval of the Reorganization Agreement
by such shareholders at the Special Meeting. The following is a summary of
the information that was presented to, and considered by, the Board of
Directors in making their determination.
Initially, the Board of Directors, including the non-interested
Directors, reviewed several areas of concern regarding the Treasury Fund.
The Board of Directors considered that (a) the relatively small asset
size of the Treasury Fund had prevented it from realizing significant
economies of scale in reducing its expense ratio (absent waivers of fees
and reimbursement of expenses by the Advisor); (b) the Treasury Fund's
perceived universe of competitors includes mutual funds that can invest in
securities other than U.S. Government securities and thereby achieve
higher returns; and (c) for certain more recent periods the Treasury
Fund's performance had lagged its competitors. Accordingly, the Board of
Directors considered that there was little expectation that the Treasury
Fund's assets would increase significantly, thereby reducing its expense
ratio.
<PAGE>
The Board of Directors also considered as alternatives: (a) the
complete liquidation and dissolution of the Treasury Fund; and (b) the
reorganization of the Treasury Fund into another one of the Strong Mutual
Funds. The Board of Directors carefully considered the advantages and
disadvantages of each alternative and, in particular, the likelihood that
either alternative would address the asset size and growth problems of the
Treasury Fund and the tax consequences and other effects that each
alternative would have on the Treasury Fund shareholders.
The alternative that the Board of Directors felt offered the greatest
likelihood of addressing the asset size and growth problem and would be
most beneficial to the Treasury Fund shareholders was the reorganization
of the Treasury Fund into an investment company with identical investment
objectives and similar investment policies and restrictions. At a
combined meeting of the Boards of Directors of the Funds held on April 24,
1996, the Board of Directors of the Treasury Fund considered the proposed
Reorganization. During the course of their review and deliberation, the
Directors evaluated the potential benefits and detriments to the Treasury
Fund and its shareholders. The Directors requested and received from
the Advisor written materials containing relevant information about
the Money Fund and the proposed Reorganization, including fee structure
and expense information, and yield and comparative performance data. The
Advisor also provided the Directors with historical asset growth
information, comparative expense ratio information, analyses of the
benefits to the shareholders of the Treasury Fund resulting from the
proposed Reorganization, and a variety of other information
relevant to the consideration of the proposed Reorganization. In this
regard, the Board of Directors evaluated the current actual and contractual
expense levels of the Money Fund and compared such expense levels with the
current actual and contractual expense levels of the Treasury Fund and
considered the anticipated expenses and charges of the Money Fund after
the Reorganization that would be borne directly and indirectly by the
shareholders of the Treasury Fund.
The Board of Directors also considered the additional efficiencies and
benefits for shareholders of the Treasury Fund that are expected to
result from the Reorganization. These benefits include potential
asset growth with resulting economies of scale, such as lower per share
expenses.
The Board of Directors considered the compatibility of the Funds'
investment objectives and policies and restrictions. In this regard, the
Board of Directors specifically considered the potential and actual
additional risks that shareholders of the Treasury Fund would be subject to
as shareholders of the Money Fund. The Board of Directors also considered
those provisions of the Reorganization Agreement relating to the price of
shares to be exchanged.
The Board of Directors further noted that the Reorganization would result
in continuity of investment advisory, transfer agent, and distributor
services, since both Funds currently employ the Advisor as investment
adviser and transfer agent and the Distributor as distributor. The Board of
Directors further noted that the terms of the agreements governing the
provision of those services to the Funds are the same. The Board of Directors
also noted that the purchase, redemption, and shareholder services
offered by the Funds are essentially identical, and that, therefore,
the Reorganization would result in continuity in the level of such
services to the Treasury Fund's shareholders. The Board of Directors noted
further that no sales or other charges would be imposed on any shares of
the Money Fund acquired by shareholders of the Treasury Fund in
connection with the Reorganization and that it was the Money Fund's
intention to remain a "no-load" fund.
<PAGE>
Moreover, the Board of Directors considered the fact that at all times
throughout the process, up until the Closing Date, current Treasury Fund
shareholders would continue to have the ability to redeem their Treasury
Fund Shares and to make a new and independent investment decision.
Finally, the Board of Directors of the Treasury Fund reviewed the terms
of the Reorganization Agreement. The Board also considered the federal
income tax consequences of the proposed Reorganization and, specifically,
the fact that the Reorganization is not expected to qualify as a tax- free
reorganization under the Code. However, in view of the fact that the
Reorganization involves two money market funds, the Board was advised
that the Reorganization is expected to have minimal tax consequences for
the Funds and for each Fund's shareholders. (For further information,
see "Federal Income Tax Consequences" below.)
Based upon their evaluation of the relevant information presented to
them, and in light of their fiduciary duties under federal and state law,
the Treasury Fund's Board of Directors unanimously determined that the
proposed Reorganization was in the best interests of the Treasury Fund and
its shareholders and that the interests of the Treasury Fund shareholders
will not be diluted as a result of the proposed Reorganization, and
recommended the approval of the Reorganization Agreement by shareholders
at the Special Meeting.
Similarly, at this same combined meeting of the Boards of Directors of
the Funds held on April 24, 1996, the Board of Directors of the Money Fund
considered the proposed Reorganization with respect to the Money Fund.
Based upon their evaluation of the relevant information provided to them,
and in light of their fiduciary duties under federal and state law,
the Board of Directors unanimously determined that (a) the proposed
Reorganization was in the best interests of the Money Fund and its
shareholders and (b) the interests of the existing Money Fund shareholders
will not be diluted as a result of the proposed Reorganization.
CAPITALIZATION.
Because the Treasury Fund will be combined in the Reorganization with
the Money Fund, the total capitalization of the Money Fund after the
Reorganization is expected to be greater than the current capitalization
of the Treasury Fund. The following table sets forth as of February 29,
1996: (i) the capitalization of the Treasury Fund; (ii) the capitalization
of the Money Fund; and (iii) the pro forma capitalization of the Money
Fund as adjusted to give effect to the Reorganization. If the Reorganization
is consummated, the capitalization of the Money Fund is likely to be
different at the Closing Date as a result of daily share purchase and
redemption activity in the Treasury Fund and the Money Fund.
<PAGE>
Pro Forma
Treasury Fund Money Fund Combined
Total Net Assets $36,739,721 $1,998,612,246 $2,035,351,967
Shares Outstanding 36,739,721 1,998,612,246 2,035,351,967
Net Asset Value Per Share $1.00 $1.00 $1.00
FEDERAL INCOME TAX CONSEQUENCES.
The Reorganization is not expected to qualify as a tax-free
reorganization under the Code. Nevertheless, because the Reorganization
involves two money market funds, it is expected to have minimal tax
consequences to the Funds and the Treasury Fund shareholders. Because
money market funds seek to maintain a stable net asset value, it is
expected that the Treasury Fund will realize minimal gain or loss on
the liquidation of its portfolio securities and instruments and other
property and assets and the exchange of the Treasury Fund Net Assets
for Money Fund Shares. Likewise, it is expected that the Treasury Fund
shareholders will realize no gain or loss on the conversion of the
Treasury Fund Shares with a value of $1 for Money Fund Shares with a value
of $1.
However, Treasury Fund shareholders will not be able to include the holding
period for their Treasury Fund Shares in their holding period for the Money
Fund Shares received as a consequence of the Reorganization. In addition,
Treasury Fund shareholders will have an initial tax basis in their Money
Fund Shares equal to the fair market value of those Money Fund Shares on the
Closing Date.
The Funds have not sought a tax ruling from the Internal Revenue Service
("IRS"). Shareholders should consult their own tax advisers concerning the
potential tax consequences to them, including state and local income tax
consequences.
COMPARISON OF THE TREASURY FUND AND THE MONEY FUND
The investment objectives of both Funds are identical and the investment
policies and restrictions of the Funds are, in many respects, substantially
similar. There are, however, some noteworthy differences. The following
discussion summarizes some of the more significant similarities and
differences in the investment policies of the Funds and is qualified in
its entirety by the discussion elsewhere herein, and in the prospectus and
Statement of Additional Information of each Fund which is incorporated
herein by reference.
Investment Objectives and Policies. The investment objectives of the
Funds are fundamental, meaning that they may not be changed without a vote
of the holders of a majority of the particular Fund's outstanding shares.
This section describes certain policies that are common to the Treasury Fund
and the Money Fund and certain noteworthy differences.
Each Fund seeks current income, a stable share price, and daily liquidity.
The Funds are designed for investors who seek money market yields, with no
anticipated fluctuations in principal. Because each Fund seeks to maintain
a constant net asset value of $1.00 per share, capital appreciation is
not expected to play a role in either Fund's returns, and dividend income
alone will provide its entire investment return. All money market
instruments, even the highest quality U.S. government securities,
can change in value for a number of reasons, including when interest
rates change dramatically. THE FUNDS CANNOT GUARANTEE
THAT THEY WILL ALWAYS BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
An investment in neither Fund is insured or guaranteed by the U.S.
Government.
<PAGE>
Each Fund limits its investments to those instruments that meet the
maturity and quality standards required or permitted by Rule 2a-7 under the
1940 Act for money market funds. Accordingly, each Fund buys only
securities with remaining maturities of thirteen months or less and
maintains an average portfolio maturity of ninety days or less. Each Fund
may invest up to 10% of its net assets in illiquid securities. Each Fund
may invest without limitation in securities purchased on a when issued or
delayed delivery basis.
The primary distinction between the Funds is that the Treasury Fund
invests only in securities issued directly by the U.S. Government, whereas
the Money Fund invests in high quality corporate, bank, and government
instruments that present minimal credit risk. The government securities
in which the Treasury Fund invests include: Treasury bills, which have
initial maturities of one year or less; Treasury notes, which have
initial maturities of between one and ten years; and Treasury bonds,
which have initial maturities of ten years or more. All U.S. Treasury
securities are guaranteed as to the timely payment of principal and
interest by the full faith and credit of the U.S. Government. This
guarantee, however, does not apply to the market value of the
securities or to the share price of the Treasury Fund.
In compliance with Rule 2a-7 under the 1940 Act, the Money Fund buys only
U.S. dollar-denominated securities that represent minimal credit risks and
are "high quality." The Money Fund will invest at least 95% of its total
assets in "first-tier" securities, generally defined as those securities
that, at the time of acquisition, are rated in the highest rating category
by at least two NRSROs or, if unrated, are determined by the Advisor to be
of comparable quality. The balance of the Money Fund, up to 5% of its total
assets, may be invested in securities that are considered "second-tier"
securities, generally defined as those securities that, at the time of
acquisition, are rated in the second-highest category or are determined by
the Advisor to be of comparable quality.
Unlike the Treasury Fund, the Money Fund may invest in mortgage-backed and
asset-backed securities (including stripped mortgage-backed or asset-backed
securities) and U.S. dollar-denominated foreign money market instruments,
and may utilize repurchase agreements as described in the prospectus and
Statement of Additional Information of the Money Fund.
Please see the prospectus for each Fund for further information concerning
each Fund's investment policies and risks.
Investment Limitations. Neither the Money Fund nor the Treasury Fund may
change its fundamental investment limitations without the affirmative vote of
the holders of a majority of its outstanding shares (as defined in the 1940
Act). However, investment limitations which are non-fundamental policies
("non-fundamental" or "operating" policies) of the Funds may be changed
by their respective Boards of Directors without shareholder approval.
Except as described above, the investment limitations of the Money Fund and
the Treasury Fund are identical and are set forth in the Statements of
Additional Information for the Funds. Please see the Statement of
Additional Information for further information concerning each Fund's
investment limitations.
<PAGE>
Purchase and Redemption Information, Exchange Privileges, Distributions,
Pricing, and Organization. As of April 1, 1996, the Treasury Fund was
closed to new investors and additional investment by existing investors,
except in certain limited circumstances. Accordingly, existing Treasury Fund
shareholders may only acquire additional Treasury Fund Shares through the
reinvestment of dividends and other distributions. The purchase price for
shares acquired through such reinvestment shall be the net asset price
determined as of the close of business on the record date of the dividend
or distribution.
Money Fund Shares are sold on a continuous basis by the Distributor and
may be purchased directly by individuals and institutions or by broker-dealers,
financial institutions, or other service providers. Money Fund Shares are
sold on a 100% no-load basis, meaning that shares may be purchased, redeemed,
and exchanged directly at net asset value without paying a sales charge.
Broker-dealers, financial institutions, and other service providers, however,
may charge an administrative fee on the purchase or redemption of
Money Fund Shares. The purchase price will be net asset value next
determined after the Money Fund receives the shareholder's request in proper
form.
No sales charge will be imposed on the issuance of Money Fund Shares in
connection with the Reorganization.
The minimum initial investment for the Money Fund is $1,000 per account
and $250 for UGMA/UTMA Accounts. The minimum initial investment amount is
waived for shareholders who enroll in the Money Fund's Automatic
Investment Plan. The minimum subsequent investment for the Money Fund is $50
per account. Purchase orders for shares of the Money Fund are effected
on any "business day", that is, any day on which the New York Stock
Exchange is open for trading. The Money Fund offers an automatic investment
plan, payroll direct deposit plan, automatic exchange plan, and systematic
withdrawal plan in connection with the purchase and redemption of its
shares.
The Funds' policies, procedures, and restrictions concerning share
redemption and exchange, dividend payment, and the determination of net
asset value are identical, as set forth in the prospectus for each Fund.
Under Federal law, the interest income earned from U.S. Treasury
securities is exempt from state and local taxes. All states allow mutual
funds to "pass through" that exemption to their shareholders, although
there are conditions to this treatment in some states. Because the
Money Fund, unlike the Treasury Fund, does not invest exclusively in
U.S. Treasury securities, a smaller percentage of the Money Fund's dividends
will be subject to that exemption from state and local taxation.
<PAGE>
Please refer to each prospectus for further information on these subjects.
Other Information. SIF and the Money Fund are registered as open-end
management investment companies under the 1940 Act, and the Treasury Fund
is one of SIF's investment portfolios. Currently, the Money Fund offers one
investment portfolio and SIF offers two investment portfolios.
SIF and the Money Fund are organized as Wisconsin corporations and, as
such, are subject to the provisions of their respective Articles of
Incorporation and Bylaws and to the Wisconsin Business Corporation Law.
The attributes of a share of common stock of each Fund are identical.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR PROPOSAL 1
2. TO APPROVE OR DISAPPROVE THE PROPOSED AMENDMENT.
Summarized below are the reasons for the Proposed Amendment and the
substance of the Proposed Amendment. However, this summary is qualified
in its entirety by reference to the Proposed Amendment, a copy of which is
attached as Exhibit C to this Combined Proxy Statement and Prospectus and
incorporated herein by reference.
DESCRIPTION OF PROPOSED AMENDMENT.
The Proposed Amendment has two purposes: (1) on the Closing Date of the
Reorganization, to cancel all of the outstanding shares of the Treasury
Fund and to automatically convert them into the right to receive full or
fractional Money Fund Shares with a net asset value equal to the
value of the Treasury Fund Shares, as described in the Reorganization
Agreement; and (2) following the Closing Date, to eliminate all of SIF's
common stock constituting the Treasury Fund Shares. If the shareholders
approve the Proposed Amendment but do not approve the Reorganization
Agreement, or if for any other reason the Reorganization is not completed,
the Proposed Amendment will not go into effect. Moreover, if the
shareholders approve the Reorganization but do not approve the
Proposed Amendment, the above-stated purposes of the Proposed Amendment
in connection with the Reorganization will not be realized.
BOARD CONSIDERATION.
Based on their evaluation of the information presented to them, and in
light of their fiduciary duties, the Board of Directors of SIF have
unanimously determined that the Proposed Amendment is in the best interest
of the shareholders of the Treasury Fund and recommend the approval of
the Proposed Amendment at the Special Meeting.
The Board was advised by counsel that the Proposed Amendment would be
necessary on the Closing Date to cancel the Treasury Fund's outstanding
shares in connection with the Reorganization of the Treasury Fund and the
distribution of Money Fund Shares to the Treasury Fund's shareholders, as
contemplated under the Reorganization Agreement, and to eliminate all of
SIF's common stock constituting the Treasury Fund Shares following the
Closing Date.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR PROPOSAL 2
<PAGE>
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION.
This Combined Proxy Statement and Prospectus is being furnished in
connection with the solicitation of proxies by SIF's Board of Directors in
connection with the Special Meeting. It is expected that the solicitation of
proxies will be primarily by mail. Officers and service contractors of
the Funds may also solicit proxies by telephone, telegraph, or personal
interview. Any shareholder giving a proxy may revoke it at any time
before it is exercised by submitting to SIF a written notice of
revocation or a subsequently executed proxy or by attending the
Special Meeting and voting in person.
Only shareholders of record of the Treasury Fund at the close of
business on June 18, 1996, will be entitled to vote at the Special Meeting.
On that date there were outstanding and entitled to be voted __________
shares of the Treasury Fund. Each share or fraction thereof is
entitled to one vote or fraction thereof.
If the accompanying proxy is executed and returned in time for the Special
Meeting, the shares covered thereby will be voted in accordance with the
proxy on all matters that may properly come before the Special Meeting or
any adjournment thereof. For information on adjournment of the Special
Meeting, see "Quorum" below.
SHAREHOLDER AND BOARD APPROVALS.
The Reorganization Agreement (and the transactions contemplated thereby)
and the Proposed Amendment are being submitted at the Special Meeting for
approval by the shareholders of the Treasury Fund. The approval of the
holders of a majority of the outstanding Treasury Fund Shares is required
for the approval of each proposal, in accordance with the provisions of
the Amended and Restated Articles of Incorporation of the Treasury Fund,
and the requirements of the Wisconsin Business Corporation Law.
Abstentions will have the same effect as casting a vote against the
proposal.
The vote of the shareholders of the Money Fund and of SIF's other
investment portfolio is not being solicited, because their approval or
consent is not required for the Reorganization to be consummated or the
Proposed Amendment to be approved.
The approval of the Reorganization Agreement by the respective Boards
of Directors of SIF and of the Money Fund is discussed above under "1.
To Approve or Disapprove the Reorganization Agreement -- Board
Consideration." The approval of the Proposed Amendment by the Board of
Directors of SIF is discussed above under "2. To Approve or Disapprove the
Proposed Amendment -- Board Consideration."
On June 18, 1996, the name, address, and share ownership of the persons
who beneficially owned 5% or more of the Treasury Fund's outstanding shares,
and the percentage of shares that would be owned by such persons upon
consummation of the Reorganization based upon their holdings and
outstanding shares on _______, 1996, are as follows:
<PAGE>
[INFORMATION TO BE PROVIDED BY THE ADVISOR]
On June 18, 1996, the name, address, and share ownership of the persons
who beneficially owned 5% or more of the outstanding shares of the Money
Fund and the percentage of shares that would be owned by such persons upon
consummation of the Reorganization based upon their holdings and
outstanding shares on ____________, 1996, are as follows:
[INFORMATION TO BE PROVIDED BY THE ADVISOR]
On June 18, 1996, the directors and officers of the Money Fund, as a group,
beneficially owned less than 1% of the outstanding shares of the Money Fund.
On June 18, 1996, the directors and officers of the Treasury Fund, as a
group, beneficially owned less than 1% of the outstanding shares of the
Treasury Fund.
APPRAISAL RIGHTS.
If the Reorganization is approved by the shareholders of the Treasury Fund
at the Special Meeting, in accordance with Sections 180.1301-1331 of the
Wisconsin Business Corporation Law, shareholders will have the right to
dissent and obtain payment of fair value for their Treasury Fund Shares.
"Fair value", under the Wisconsin Business Corporation Law, as applied
to the Reorganization, means the value of the Treasury Fund Shares
immediately before the Closing of the Reorganization. However, the exercise
of such appraisal rights by shareholders is subject to the forward pricing
requirements of Rule 22c-1 under the 1940 Act, and that Rule supersedes
contrary provisions of state law.
Consequently, shareholders have the right to redeem their Treasury Fund
Shares at net asset value until the Closing Date and thereafter former
Treasury Fund shareholders may redeem their Money Fund Shares acquired
in the Reorganization at net asset value, subject to the forward pricing
requirements of Rule 22c-1 under the 1940 Act.
QUORUM.
In the event that a quorum is not present at the Special Meeting, or in the
event that a quorum is present at the Special Meeting but sufficient
votes to approve the Reorganization Agreement and the transactions
contemplated thereby are not received, the persons named as proxies may
propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares affected by the adjournment
that are represented at the Special Meeting in person or by proxy. If a
quorum is present, the persons named as proxies will vote those proxies
which they are entitled to vote FOR the Reorganization Agreement in favor
of such adjournments, and will vote those proxies required to be voted
AGAINST such proposal against any adjournment. A quorum is constituted by
the presence in person or by proxy of the holders of more than 50% of the
outstanding Treasury Fund Shares. Proxies properly executed and marked with
a negative vote or an abstention, or broker non-votes, will be considered to
be present at the Special Meeting for the purposes of determining the
existence of a quorum for the transaction of business. Broker non-votes
exist where a broker proxy indicates that the broker is not authorized to
vote on a particular proposal.
<PAGE>
ANNUAL MEETINGS.
The Money Fund does not presently intend to hold annual meetings of
shareholders for the election of directors and other business unless and
until such time as less than a majority of the directors holding office
have been elected by the shareholders, at which time the directors then
in office will call a shareholders' special meeting for the election
of directors. Shareholders have the right to call a special meeting of
the shareholders to consider any matter on which the shareholders
properly may act, provided that such a meeting has been requested in
writing by the holders of record of 10% or more of the Money Fund's
outstanding shares of common stock entitled to vote on any issue
proposed to be considered at the special meeting and upon the payment to
the Fund by such shareholders of the reasonable estimated costs of
preparing and mailing the notice of the special meeting. To the extent
required by law, the Money Fund will assist in shareholder communications
on such matters.
ADDITIONAL INFORMATION ABOUT SIF AND EACH FUND
SIF, the Treasury Fund and the Money Fund are each subject to the
informational requirements of the Securities Exchange Act of 1934 and the
1940 Act, as applicable, and, in accordance with such requirements,
file proxy materials, reports, and other information with the SEC. These
materials can be inspected and copied at the Public Reference Facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549,
at the offices of the Money Fund listed on the first page hereof, and at the
SEC's Regional Offices at 7 World Trade Center, Room 1300, New York, New
York 10007, and at Everett McKinley Dirksen Building, 219 S. Dearborn
Street, Room 1204, Chicago, Illinois 60604. Copies of such materials can also
be obtained from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington,
D.C. 20549, at prescribed rates.
DIRECTORS AND OFFICERS
The current directors and officers of the Money Fund will continue as
directors and officers of the Money Fund following the Reorganization. The
Money Fund's officers and directors also are officers and directors of SIF
and will continue in such positions following the Reorganization.
Information concerning such persons is contained in the Statement of
Additional Information for each Fund.
FINANCIAL INFORMATION FOR THE TREASURY FUND
Below are Financial Highlights for the Treasury Fund as of the fiscal year
ended December 31, 1995. It is based on a single share outstanding through
such period. This information is derived from financial statements audited by
Coopers & Lybrand L.L.P., independent accountants to the Funds. The data
should be read in conjunction with the financial statements, related notes,
and Coopers & Lybrand L.L.P.'s report thereon which are included in the
Annual Report for the Treasury Fund incorporated by reference in the
Statement of Additional Information, dated July 3, 1996, for this Combined
Proxy Statement and Prospectus.
<PAGE>
TREASURY FUND
FINANCIAL HIGHLIGHTS
Per Share Data
and Ratios for a
Share Outstanding
Throughout the
Period Indicated:
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Net Asset Value, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Beginning of period
Net Investment 0.05 0.04 0.03 0.04 0.06
Income
Dividends from (0.05) (0.04) (0.03) (0.04) (0.06)
Net Investment Income ----- ------ ------ ------ ------
Net Asset Value, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Value, End of ======== ======== ======== ======== ========
Period
Total Return +4.9% +3.8% +2.9% +3.7% +5.8%
Net Assets, End $42,660 $67,527 $41,851 $29,390 $20,431
of Period (In
Thousands)
Ratio of 0.8% 0.2% 0.2% 0.3% 0.3%
Expenses to
Average Net Assets
Ratio of 0.9% 0.8% 1.0% 0.9% 1.0%
Expenses to
Average Net
Assets Without
Waivers and
Absorptions
Ratio of Net 4.8% 3.8% 2.9% 3.6% 5.4%
Investment
Income to
Average Net
Assets
Financial Information for the Money Fund
Below are Financial Highlights for the Money Fund as of the ten months
ended October 31, 1995. (During 1995 the Money Fund's fiscal year-end was
changed from December 31 to October 31.) It is based on a single share
outstanding through such period. This information is derived from
financial statements for such period audited by Coopers & Lybrand
L.L.P., independent accountants to the Funds. The data should be read in
conjunction with the financial statements, related notes, and Coopers &
Lybrand L.L.P.'s report thereon which are included in the Annual Report
for the Money Fund incorporated by reference in the Statement of Additional
Information dated, July 3, 1996, for this Combined Proxy Statement
and Prospectus.
<PAGE>
MONEY FUND
FINANCIAL HIGHLIGHTS
Per Share Data
and Ratios for a
Share Outstanding
Throughout the Period
Indicated:
1995<F1> 1994 1993 1992 1991
---- ---- ---- ---- ----
Net Asset Value, $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Beginning of period
Net Investment Income 0.05 0.04 0.03 0.04 0.06
Dividends From Net (0.05) (0.04) (0.03) (0.04) (0.06)
Investment Income ------ ------ ------ ------ ------
Net Asset Value, End $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
of Period ======== ======= ======= ======= =======
Total Return +5.2% +4.0 +2.9 +3.7 +6.1
Net Assets, End of Period $1,934,071 $540,983 $329,988 $390,003 $533,869
(In Thousands)
Ratio of Expenses 0.0%* 0.6% 0.7% 0.8% 0.7%
to Average Net Assets
Ratio of Expenses 0.7%* 0.9% 1.0% 1.1% 1.0%
to Average Net
Assets Without
Waivers and
Absorptions
Ratio of Net 6.1%* 4.0% 2.9% 3.7% 6.0%
Investment Income
to Average Net Assets
continued..
1990 1989 1988 1987 1986
---- ---- ---- ---- ----
Net Asset Value, Beginning $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
of period
Net Investment Income 0.08 0.09 0.07 0.06 0.06
Dividends From Net (0.08) (0.09) (0.07) (0.06) (0.06)
Investment Income ------ ------ ------ ------ ------
Net Asset Value, End of $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Period ========= ======== ======== ======== ========
Total Return +8.1% +9.2% +7.5% +6.4% +6.5%
Net Assets, End of $768,870 $829,332 $464,459 $194,963 $ 26,363
Period (In Thousands)
Ratio of Expenses to 0.7% 0.7% 1.1% 0.8% 0.8%
Average Net Assets
Ratio of Expenses to 0.9% 1.0% 1.1% 1.1% 1.3%
Average Net Assets
Without Waivers and
Absorptions
Ratio of Net Investment 7.8% 8.8% 7.4% 6.6% 5.8%
Income to Average Net
Assets
* Calculated on an annualized basis.
<F1> For the ten-month period ended October 31, 1995. Total return is not
annualized.
Information included in this Combined Proxy Statement and Prospectus
concerning the Treasury Fund was provided by SIF and the Advisor.
Information included in this Combined Proxy Statement and Prospectus
concerning the Money Fund was provided by the Money Fund and the Advisor.
FINANCIAL STATEMENTS
The financial statements and financial highlights of the Treasury Fund for
the fiscal year ended December 31, 1995, and of the Money Fund for the ten
months ended October 31, 1995, that are included in their respective
prospectuses and Statements of Additional Information and in the Statement of
Additional Information related to this Combined Proxy Statement and
Prospectus (and with respect to the financial highlights, that are included
in this Combined Proxy Statement and Prospectus) have been audited by
Coopers & Lybrand L.L.P., independent accountants, to the extent indicated
in their reports thereon, incorporated by reference or included in such
prospectuses and Statements of Additional Information. In 1995, the
Board of Directors for the Money Fund authorized a change in the Money
Fund's fiscal year-end from December 31 to October 31. Therefore the
financial statements and financial highlights described above for the Money
Fund encompass financial information for the ten months ended October 31,
1995. The financial statements and financial highlights audited by Coopers
& Lybrand L.L.P. and included in such prospectuses and Statements of
Additional Information have been included in reliance upon such reports
given upon the authority of such firm as experts in accounting and
auditing.
<PAGE>
OTHER BUSINESS
SIF's Board of Directors knows of no other business to be brought before
the Special Meeting. However, if any other matters come before the Special
Meeting, it is the intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance
with the judgment of the persons named in the enclosed form of proxy.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to SIF and the Treasury Fund in
writing at the address on the cover page of this Combined Proxy Statement
and Prospectus or by telephoning 1-800-368-3863.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL
MEETING ARE URGED TO DATE AND SIGN THE ENCLOSED PROXY AND
PROMPTLY RETURN IT IN THE ENCLOSED ENVELOPE WHICH IS
ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE EXPENSE
OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
COMPLETING AND RETURNING YOUR PROXY PROMPTLY.
By Order of the Board of Directors
Ann E. Oglanian
Secretary
Menomonee Falls, Wisconsin
July 3, 1996
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made as of this 24th day of May, 1996, by and between Strong Income Funds,
Inc. ("SIF"), a Wisconsin corporation consisting of two investment portfolios,
one of which is the Strong U.S. Treasury Money Fund (the "Acquired Fund"), and
Strong Money Market Fund, Inc., a Wisconsin corporation consisting of one
investment portfolio (the "Acquiring Fund"). (The Acquiring Fund and the
Acquired Fund are sometimes referred to collectively as the "Funds" and
individually as a "Fund".)
This Agreement is intended to be and is adopted as a plan of reorganization.
The reorganization ("Reorganization") will consist of the liquidation, prior
to the time of the closing of the Reorganization, of the Acquired Fund's
portfolio securities and instruments and, to the extent reasonably
possible, its other property and assets, and the subsequent transfer of
substantially all of the property and assets (including the proceeds from
the liquidation) and goodwill of the Acquired Fund to the Acquiring Fund in
exchange solely for the issuance of shares of common stock of the Acquiring
Fund ("Acquiring Fund Shares") to the Acquired Fund, followed by the
distribution by the Acquired Fund, on or promptly after the Closing Date, as
defined herein, of the Acquiring Fund Shares to the shareholders of the
Acquired Fund and the liquidation of the Acquired Fund, the cancellation
of all of its outstanding shares as provided herein, and the amendment of
SIF's Amended and Restated Articles of Incorporation to eliminate that
class of SIF's shares that currently constitutes the Acquired Fund's
shares (the "Acquired Fund Shares"), all upon the terms and conditions
hereinafter set forth in this Agreement.
In consideration of the premises of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ACQUIRING FUND
SHARES AND LIQUIDATION OF THE ACQUIRED FUND
1.1 No later than the time of the closing of the Reorganization as
provided in Section 3.1 hereof (the "Closing Time") on the date of the
closing of the Reorganization (the "Closing Date"), the Acquired Fund shall
have disposed of all of its portfolio securities and instruments and, to the
extent reasonably possible, shall liquidate its other property and assets
(together the "Portfolio Liquidation") at their then current fair market
value (as determined in accordance with the Acquired Fund's Prospectus and
Statement of Additional Information), such that the proceeds of the
Portfolio Liquidation shall be held in cash or bank deposits at the
Closing Time. Provided that the Portfolio Liquidation is completed by the
Closing Time, the Acquired Fund may purchase or sell its portfolio securities
and instruments in the ordinary course of business prior to the Closing Time.
1.2 On the Closing Date, the Acquired Fund shall transfer substantially
all of its property and assets (consisting, without limitation, of the
proceeds of the Portfolio Liquidation, dividends and interest, receivables,
claims, cash, cash equivalents, deferred or prepaid expenses shown as
assets on the Acquired Fund's books, goodwill and intangible property,
books and records, and other assets), as set forth in the statement of
assets and liabilities referred to in Section 8.2 hereof (the "Statement
of Assets and Liabilities"), to the Acquiring Fund free and clear of all
liens, encumbrances, and claims, except for cash or bank deposits in
an amount necessary: (a) to pay the Acquired Fund's costs and expenses
of carrying out this Agreement (including but not limited to fees of
counsel and independent accountants, any income dividends payable prior to
the Closing Date, and expenses of its liquidation contemplated hereunder);
(b) to discharge all of the unpaid liabilities reflected on its books and
records at the Closing Date; and (c) to pay such contingent liabilities, if
any, as the board of directors of the Acquired Fund shall reasonably deem to
exist against the Acquired Fund at the Closing Date, for which contingent
and other appropriate liability reserves shall be established on the
Acquired Fund's books. Any unspent portion of such cash or bank deposits
retained shall be delivered by SIF to the Acquiring Fund upon the
satisfaction of all of the foregoing liabilities, costs, and expenses of the
Acquired Fund. (The property and assets to be transferred to the Acquiring
Fund under this Agreement are referred to herein as the "Acquired Fund Net
Assets".) In exchange for the transfer of the Acquired Fund Net Assets,
the Acquiring Fund shall deliver to the Acquired Fund, for distribution pro
rata by the Acquired Fund to its shareholders as of the close of business
on the Closing Date, a number of Acquiring Fund Shares having an
aggregate net asset value equal to the value of the Acquired Fund Net
Assets all determined as provided in Section 2 of this Agreement and as of
the date and time specified therein. Such transactions shall take place on
the Closing Date at the Closing Time. At and after the Closing Date,
SIF shall not be responsible for the liabilities of the Acquired Fund,
and recourse for such liabilities shall be limited to the Acquiring
Fund, except as provided in Section 1.2 hereof.
<PAGE>
1.3 On or promptly after the Closing Date, the Acquired Fund shall
liquidate and distribute pro rata to its shareholders of record at the
Closing Time on the Closing Date (the "Acquired Fund Shareholders") the
Acquiring Fund Shares received by the Acquired Fund pursuant to Section 1.1
hereof. (The date of such liquidation and distribution is referred to
as the "Liquidation Date.") In addition, each Acquired Fund Shareholder
shall have the right to receive any dividends or other distributions that
were declared prior to the Closing Date, but unpaid at that time, with
respect to the Acquired Fund Shares that are held by such Acquired Fund
Shareholders on the Closing Date. Such liquidation and distribution shall be
accomplished by Strong Capital Management, Inc. ("SCM"), in its capacity as
transfer agent for the Acquiring Fund, opening accounts on the share
records of the Acquiring Fund in the names of the Acquired Fund
Shareholders and transferring to each such Acquired Fund Shareholder
account the pro rata number of Acquiring Fund Shares due each such Acquired
Fund Shareholder from the Acquiring Fund Shares then credited
to the account of the Acquired Fund on the Acquiring Fund's books and records
The Acquiring Fund shall not issue certificates representing Acquiring Fund
Shares in connection with such exchange, except in accordance with the
procedures set forth in the Acquiring Fund's then-current Prospectus and
Statement of Additional Information or as provided in Section 1.4 hereof.
1.4 The Acquired Fund Shareholders holding certificates representing their
ownership of Acquired Fund Shares may be requested to surrender such
certificates or deliver an affidavit with respect to lost certificates, in
such form and accompanied by such surety bonds as the Acquired Fund
may require (collectively, an "Affidavit"), to the Acquired Fund prior to
the Closing Date. On the Closing Date, all Acquired Fund Share
certificates that remain outstanding shall be deemed to be canceled.
SIF's transfer books with respect to the Acquired Fund's shares shall be
closed permanently as of the close of business on the day immediately
prior to the Closing Date. All unsurrendered Acquired Fund Share
certificates shall no longer evidence ownership of common stock of the
Acquired Fund and shall be deemed for all corporate purposes to evidence
ownership of the number of Acquiring Fund Shares into which the Acquired
Fund Shares were effectively converted. Unless and until any such
certificate shall be so surrendered or an Affidavit relating thereto shall be
delivered to the Acquiring Fund, dividends and other distributions
payable by the Acquiring Fund subsequent to the Liquidation Date with
respect to such Acquiring Fund Shares shall be paid to the holder of
such certificate(s), but such Shareholders may not redeem or transfer
Acquiring Fund Shares received in the Reorganization with respect to
unsurrendered Acquired Fund Share certificates.
<PAGE>
1.5 Any transfer taxes payable upon issuance of Acquiring Fund
Shares in a name other than the registered holder of the Acquiring Fund
Shares on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.6 As soon as practicable following the Liquidation Date, SIF shall
take all steps necessary to end the existence of the Acquired Fund,
including (a) the payment or other satisfaction of the Acquired Fund's
remaining outstanding costs, expenses and other liabilities from the
cash and bank deposits retained for that purpose pursuant to Section 1.2
hereof, and (b) the amendment of SIF's Amended and Restated Articles of
Incorporation to eliminate the class of SIF's common stock constituting the
Acquired Fund Shares.
2. VALUATION
2.1 The net asset value of the Acquiring Fund Shares and the value of
the Acquired Fund Net Assets shall in each case be determined as of the close
of regular trading on the New York Stock Exchange ("NYSE") on the Closing
Date, provided that on such date (a) the NYSE is open for unrestricted
trading and (b) no significant changes in interest rates are announced
or otherwise occur. The net asset value per share of Acquiring Fund Shares
shall be computed in accordance with the policies and procedures set forth
in the then-current Prospectus and Statement of Additional Information of
the Acquiring Fund and shall be computed to not fewer than two (2) decimal
places. The value of the Acquired Fund Net Assets shall be computed in
accordance with the policies and procedures set forth in the
then-current Prospectus and Statement of Additional Information of the
Acquired Fund.
2.2 In the event that on the proposed Closing Date trading or the
reporting of trading on the NYSE or elsewhere shall be disrupted (including
as noted in Section 2.1 concerning interest rates) so that accurate appraisal
of the net asset value of the Acquiring Fund or the value of the Acquired
Fund Net Assets is impracticable, the Closing Date shall be postponed until
the first business day when regular trading on the NYSE shall have been
fully resumed and reporting shall have been restored and other trading
markets are otherwise stabilized.
<PAGE>
2.3 The number of Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund Net Assets
shall be determined by dividing the Acquired Fund Net Assets by the
Acquiring Fund's net asset value per share, both as determined in accordance
with Section 2.1 hereof.
2.4 All computations of value regarding the Funds shall be provided by
SCM and shall be certified by the Treasurer for each Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be August 30, 1996, or such earlier or later
date as the parties may agree. The Closing Time shall be at 3:30 p.m.,
Central Time, and the Closing shall be held at the offices of SCM, 100
Heritage Reserve, Menomonee Falls, Wisconsin 53051, or at such other time
and/or place as the parties may agree.
3.2 Any cash of the Acquired Fund delivered on the Closing Date
shall be in the form of currency or shall be delivered on the Closing Date
by the Custodian crediting the Acquiring Fund's account maintained with the
Custodian with immediately available funds.
3.3 If any of the Acquired Fund Net Assets, for any reason, are not
transferred on the Closing Date, the Acquired Fund shall cause such assets
to be transferred to the Acquiring Fund in accordance with this
Agreement at the earliest practicable date thereafter.
3.4 SCM, in its capacity as transfer agent for the Acquired Fund,
shall deliver to the Acquiring Fund at the Closing Time a list of the
names, addresses, federal taxpayer identification numbers, and backup
withholding and nonresident alien withholding status of Acquired Fund
Shareholders and the number of outstanding shares of common stock of the
Acquired Fund owned by each such Acquired Fund Shareholder, all as of the
close of regular trading on the NYSE on the Closing Date, certified by an
appropriate officer of SCM (the "Shareholder List"). SCM, in its capacity
as transfer agent for the Acquiring Fund, shall issue and deliver to the
Acquired Fund a confirmation evidencing the Acquiring Fund Shares to
be credited to each Acquired Fund Shareholder on the Liquidation Date, or
provide evidence satisfactory to the Acquired Fund that such Acquiring Fund
Shares have been credited to each Acquired Fund Shareholder's account on
the books of the Acquiring Fund. At the Closing, each Fund shall deliver
to the other Fund such bills of sale, checks, assignments, certificates,
receipts, or other documents as the other Fund or its counsel may reasonably
request.
4. REPRESENTATIONS AND WARRANTIES OF SIF, ON BEHALF OF THE ACQUIRED FUND
SIF, on behalf of the Acquired Fund, represents and warrants to the
Acquiring Fund as follows:
<PAGE>
4.1 SIF is a corporation duly organized, validly existing, and
in "good standing" under the laws of the State of Wisconsin (meaning it has
filed its most recent annual report and has not filed articles of
dissolution) and has the power to own all of its properties and assets and,
subject to approval of the Acquired Fund Shareholders, to perform its
obligations under this Agreement and to consummate the transactions
contemplated herein. SIF is not required to qualify to do business in any
jurisdiction in which it is not so qualified or where failure to qualify would
not subject it to any material liability or disability. SIF has all
necessary federal, state, and local authorizations, consents, and approvals
required to own all of its properties and assets and to carry on its business
as now being conducted and to consummate the transactions contemplated
herein.
4.2 SIF is a registered investment company classified as a management
company of the open-end diversified type and its registration with the SEC as
an investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), is in full force and effect.
4.3 The execution, delivery, and performance of this Agreement have
been duly authorized by all necessary action on the part of SIF's Board of
Directors on behalf of the Acquired Fund, and this Agreement constitutes a
valid and binding obligation of SIF, subject to the approval of the
Acquired Fund Shareholders, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
4.4 SIF is not, and the execution, delivery, and performance of this
Agreement by SIF will not result, in violation of any provision of the
Amended and Restated Articles of Incorporation or ByLaws of SIF or
of any agreement, indenture, instrument, contract, lease, or other
arrangement or undertaking to which SIF is a party or by which it is bound.
4.5 The Acquired Fund has elected to be treated as a regulated
investment company ("RIC") for federal income tax purposes under Part I of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"),
has qualified as a RIC for each taxable year of its operations, and will
continue to qualify as a RIC as of the Closing Date and with respect to
its final taxable year ending upon its liquidation.
4.6 The financial statements of the Acquired Fund for the fiscal year
ended December 31, 1995, and each of its previous two fiscal years
(which were audited by its independent accountants) (copies of which have
been furnished to the Acquiring Fund), present fairly the financial position
of the Acquired Fund as of the date indicated and the results of its
operations and changes in net assets for the respective stated periods (in
accordance with generally accepted accounting principles consistently
applied).
4.7 The Prospectus of the Acquired Fund, dated May 1, 1996, and the
corresponding Statement of Additional Information, dated May 1, 1996, do
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and any amended, revised, or new Prospectus or
Statement of Additional Information of the Acquired Fund or any supplement
thereto, that is hereafter filed with the SEC (copies of which
documents shall be provided to the Acquiring Fund promptly after such
filing), shall not contain any untrue statement of a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
<PAGE>
4.8 No material legal or administrative proceeding or investigation of
or before any court or governmental body is currently pending or, to its
knowledge, threatened as to SIF or the Acquired Fund or any of their
properties or assets. SIF and the Acquired Fund know of no facts which
might form the basis for the institution of such proceedings. SIF and
the Acquired Fund are not parties to or subject to the provisions of
any order, decree, or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate
the transactions herein contemplated.
4.9 SIF has furnished the Acquiring Fund with copies or descriptions of
all agreements or other arrangements to which the Acquired Fund is a party.
The Acquired Fund has no material contracts or other commitments (other
than this Agreement or agreements for the purchase of securities entered
into in the ordinary course of business and consistent with its
obligations under this Agreement) which will not be terminated by the
Acquired Fund in accordance with its terms at or prior to the Closing Date.
4.10 The Acquired Fund does not have any known liabilities of a
material amount, contingent or otherwise, other than those reflected in
the financial statements referred to in Section 4.6 hereof and those
incurred in the ordinary course of business as an investment company since
the dates of those financial statements. On the Closing Date, SIF shall advise
the Acquiring Fund in writing of all of the Acquired Fund's known
liabilities, contingent or otherwise, whether or not incurred in the
ordinary course of business, existing or accrued at such time.
4.11 Since December 31, 1995, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities, or
business other than changes occurring in the ordinary course of its business.
4.12 At the date hereof and by the Closing Date, all federal, state,
and other tax returns and reports, including information returns and payee
statements, of the Acquired Fund required by law to have been filed or
furnished by such dates shall have been filed or furnished, or extensions
concerning such tax returns and reports shall have been obtained, and all
federal, state, and other taxes, interest, and penalties shall have been
paid so far as due, or adequate provision shall have been made on the
Acquired Fund's books for the payment thereof, and to the best of the
Acquired Fund's knowledge no such tax return is currently under audit and no
tax-deficiency or liability has been asserted with respect to such
tax returns or reports by the Internal Revenue Service or any state or
local tax authority.
4.13 At the Closing Date, SIF will have good and marketable title
to the Acquired Fund Net Assets, and subject to approval by the Acquired Fund
Shareholders, full right, power, and authority to sell, assign, transfer,
and deliver such assets hereunder, and upon delivery and in payment for
such assets, the Acquiring Fund will acquire good and marketable title
thereto subject to no liens or encumbrances of any nature whatsoever or
restrictions on the ownership or transfer thereof, except such
imperfections of title or encumbrances as do not materially detract from the
value or use of the assets subject thereto, or materially affect title thereto.
<PAGE>
4.14 No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by SIF of the
transactions contemplated by this Agreement, except such as may be required
under the federal or state securities laws or the rules and regulations
thereunder.
4.15 The Combined Proxy Statement/Prospectus of SIF and the Acquiring
Fund referred to in Section 6.8 hereof (the "Proxy Statement/Prospectus") to
be included in the Form N-14 Registration Statement referred to in Section 6.7
hereof and any Prospectus or Statement of Additional Information of the
Acquired Fund contained or incorporated by reference in the Form N-14
Registration Statement, and any supplement or amendment to such documents
(other than written information furnished by the Acquiring Fund for
inclusion therein, as covered by the Acquiring Fund's warranty in
Section 5.18 hereof), on the effective and clearance dates of the Form N-14
Registration Statement, on the date of the Special Meeting of Acquired Fund
Shareholders, and on the Closing Date: (a) shall comply in all material
respects with the provisions of the Securities Exchange Act of 1934
(the "1934 Act"), the 1940 Act, the rules and regulations thereunder, and
all applicable state securities laws and rules and regulations thereunder;
and (b) shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein in light of the circumstances under which
such statements were made, not misleading.
4.16 All of the issued and outstanding shares of common stock of the
Acquired Fund are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and nonassessable except to the extent
provided in Section 180.0622(2)(b) of the Wisconsin Statutes, or any
successor provision, which provides that shareholders of a corporation
organized under Chapter 180 of the Wisconsin Statutes may be assessed up
to the par value of their shares to satisfy the obligations of such
corporation to its employees for services rendered, but not exceeding six
months service in the case of any individual employee. All of the issued
and outstanding shares of common stock of the Acquired Fund will, at the
time of Closing, be held by the persons and in the amounts set forth in
the Shareholder List.
4.17 All of the issued and outstanding shares of common stock of the
Acquired Fund have been offered for sale and sold in conformity, in all
material respects, with all applicable federal and state securities laws,
including the registration or exemption from registration of such shares,
except as may have been previously disclosed in writing to the Acquiring
Fund.
4.18 The information to be furnished by SIF for use in preparing
applications for orders, the Form N-14 Registration Statement, proxy
materials, and other documents which may be necessary in connection
with the transactions contemplated hereby shall be accurate and complete
and shall comply in all material respects with federal securities and
other laws and regulations thereunder applicable thereto.
4.19 The Acquired Fund does not have any unamortized or unpaid
organizational fees or expenses.
<PAGE>
5. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND
The Acquiring Fund represents and warrants to SIF as follows:
5.1 The Acquiring Fund is a corporation duly organized, validly
existing, and in "good standing" under the laws of the State of Wisconsin
(meaning it has filed its most recent annual report and has not filed
articles of dissolution) and has the power to own all of its properties and
assets and to perform its obligations under this Agreement and to consummate
the transactions contemplated herein. The Acquiring Fund is not required
to qualify to do business in any jurisdiction in which it is not so
qualified or where failure to qualify would not subject it to any material
liability or disability. The Acquiring Fund has all necessary federal, state,
and local authorizations, consents, and approvals required to own all of its
properties and assets and to carry on its business as now being conducted and
to consummate the transactions contemplated herein.
5.2 The Acquiring Fund is a registered investment company
classified as a management company of the open-end diversified type and
its registration with the SEC as an investment company under the 1940 Act
is in full force and effect.
5.3 The execution, delivery, and performance of this Agreement have
been duly authorized by all necessary action on the part of the Acquiring
Fund's Board of Directors, and this Agreement constitutes a valid and binding
obligation of the Acquiring Fund enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
5.4 The Acquiring Fund is not, and the execution, delivery, and
performance of this Agreement by the Acquiring Fund will not result, in
violation of any provisions of the Amended and Restated Articles of
Incorporation or Bylaws of the Acquiring Fund or of any agreement,
indenture, instrument, contract, lease, or other arrangement or undertaking
to which the Acquiring Fund is a party or by which it is bound.
5.5 The Acquiring Fund has elected to be treated as a RIC for federal
income tax purposes under Part I of Subchapter M of the Code, has
qualified as a RIC for each taxable year since its inception, and will
qualify as a RIC as of the Closing Date.
5.6 The financial statements of the Acquiring Fund, for the ten months
ended October 31, 1995, and each of its previous two fiscal years
(which were audited by its independent accountants) (copies of which have
been furnished to SIF), present fairly the financial position of the
Acquiring Fund as of the dates indicated and the results of its
operations and changes in net assets for the respective stated periods
(in accordance with generally accepted accounting principles consistently
applied).
5.7 The Prospectus of the Acquiring Fund, dated March 1, 1996, and its
Statement of Additional Information, dated March 1, 1996, do not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
any amended, revised, or new Prospectus or Statement of Additional
Information or any supplement thereto with respect to the Acquiring Fund
that is hereafter filed with the SEC (copies of which documents shall be
provided to SIF promptly after such filing) shall not contain any untrue
statement of a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
<PAGE>
5.8 No material legal or administrative proceeding, or investigation of
or before any court or governmental body is currently pending or, to its
knowledge, threatened as to the Acquiring Fund or any of its properties
or assets. The Acquiring Fund knows of no facts which might form the
basis for the institution of such proceedings. The Acquiring Fund is not a
party to or subject to the provisions of any order, decree, or judgment of
any court or governmental body which materially and adversely affects
the Acquiring Fund's business or its ability to consummate the transactions
herein contemplated.
5.9 The Acquiring Fund does not have any known liabilities of a
material amount, contingent or otherwise, other than those reflected in
the financial statements referred to in Section 5.6 hereof and those incurred
in the ordinary course of business as an investment company since the dates
of those financial statements. On the Closing Date, the Acquiring Fund
shall advise SIF in writing of all of the Acquiring Fund's known
liabilities, contingent or otherwise, whether or not incurred in the
ordinary course of business, existing or accrued at such time.
5.10 Since December 31, 1995, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities, or
business other than changes occurring in the ordinary course of its business.
5.11 At the date hereof and by the Closing Date, all federal, state,
and other tax returns and reports, including information returns and payee
statements, of the Acquiring Fund required by law to have been filed or
furnished by such dates shall have been filed or furnished, or
extensions concerning such tax returns and reports shall have been
obtained, and all federal, state, and other taxes, interest, and penalties
shall have been paid so far as due, or adequate provision shall have been
made on the Acquiring Fund's books for the payment thereof, and to the
best of the Acquiring Fund's knowledge no such tax return is currently under
audit and no tax deficiency or liability has been asserted with respect
to such tax returns or reports by the Internal Revenue Service or any state
or local tax authority.
5.12 No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Fund of the transactions contemplated by the Agreement, except for the
registration of the Acquiring Fund Shares under the Securities Act of
1933 (the "1933 Act"), the 1940 Act, and under state securities laws, or
as may otherwise be required under the federal and state securities laws or
the rules and regulations thereunder.
5.13 The Form N-14 Registration Statement referred to in Section 6.7
hereof (other than written information furnished by SIF for inclusion therein
as covered by SIF's warranty in Section 4.19 hereof) and any Prospectus or
Statement of Additional Information of the Acquiring Fund contained or
incorporated therein by reference, and any supplement or amendment to
the Form N-14 Registration Statement or any such Prospectus or Statement of
Additional Information, on the effective and clearance dates of the Form
N-14 Registration Statement, on the date of the Special Meeting of the
Acquired Fund Shareholders, and on the Closing Date: (a) shall comply in
all material respects with the provisions of the 1934 Act, the 1940 Act,
the rules and regulations thereunder, and all applicable state securities
laws and the rules and regulations thereunder; and (b) shall not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which the statements were made, not
misleading.
<PAGE>
5.14 All of the issued and outstanding shares of common stock of the
Acquiring Fund are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and nonassessable except to the
extent provided in Section 180.0622(2)(b) of the Wisconsin Statutes (which
is summarized in Section 4.16 of this Agreement), or any successor
provision.
5.15 All of the issued and outstanding shares of common stock of the
Acquiring Fund have been offered for sale and sold in conformity, in all
material respects, with all applicable federal and state securities laws,
including the registration or exemption from registration of such shares,
except as may previously have been disclosed in writing to SIF.
5.16 The Acquiring Fund Shares to be issued and delivered to the Acquired
Fund pursuant to the terms of this Agreement, when so issued and delivered,
will be duly and validly issued shares of common stock of the Acquiring
Fund, will be fully paid and nonassessable by the Acquiring Fund, except
to the extent provided in Section 180.0622(2)(b) of the Wisconsin
Statutes (which is summarized in Section 4.16 of this Agreement), or
any successor provision, and will be duly registered in conformity with all
applicable federal and state securities laws, and no shareholder of the
Acquiring Fund shall have any option, warrant, or preemptive right of
subscription or purchase with respect thereto.
5.17 The information to be furnished by the Acquiring Fund for use in
preparing the Proxy Statement/Prospectus, proxy materials, and other documents
which may be necessary in connection with the transactions contemplated
hereby shall be accurate and complete and shall comply in all
material respects with federal securities and other laws and regulations
applicable thereto.
6. COVENANTS OF THE ACQUIRING FUND AND SIF
6.1 Except as expressly contemplated herein to the contrary, each
Fund shall operate its business in the ordinary course between the date hereof
and the Closing Date, it being understood that such ordinary course of
business will include customary dividends and distributions and any other
distribution necessary or desirable to avoid federal income or excise taxes.
6.2 After the effective date of the Form N-14 Registration
Statement referred to in Section 6.7 hereof, and before the Closing Date and
as a condition thereto, the Board of Directors of SIF shall call, and SIF shall
hold, a Special Meeting of the Acquired Fund Shareholders to consider and
vote upon this Agreement and the transactions contemplated hereby
(including the amendment of SIF's Amended and Restated Articles of
Incorporation to cancel all of the outstanding shares of the Acquired
Fund and to eliminate the class of SIF's common stock constituting the
Acquired Fund Shares, effective as of the Closing of the Reorganization),
and SIF shall take all other actions reasonably necessary to obtain
approval of the transactions contemplated herein.
<PAGE>
6.3 SIF and the Acquired Fund covenant that they shall not sell or
otherwise dispose of any of the Acquiring Fund Shares to be received in the
transactions contemplated herein, except in distribution to the Acquired Fund
Shareholders as contemplated herein.
6.4 SIF shall provide such information within its possession or
reasonably obtainable as the Acquiring Fund may reasonably request concerning
the beneficial ownership of the Acquired Fund Shares.
6.5 Subject to the provisions of this Agreement, the Acquiring Fund
and SIF each shall take, or cause to be taken, all action, and do or cause to
be done, all things reasonably necessary, proper, or advisable to consummate
the transactions contemplated by this Agreement.
6.6 SIF shall furnish to the Acquiring Fund on the Closing Date the
Statement of the Assets and Liabilities of the Acquired Fund as of the
Closing Date, which statement shall be prepared in accordance with
generally accepted accounting principles consistently applied and shall
be certified by SIF's Treasurer or Assistant Treasurer. As promptly as
practicable, but in any case within sixty (60) days after the Closing Date,
SIF shall furnish to the Acquiring Fund, in such form as is reasonably
satisfactory to the Acquiring Fund, a statement of the earnings and profits
of the Acquired Fund for federal income tax purposes, and of any capital
loss carryovers and other items that will be carried over to the Acquiring
Funds as a result of Section 381 of the Code, which statement shall be
certified by SIF's Treasurer or Assistant Treasurer. SIF covenants that
the Acquired Fund has no earnings and profits that were accumulated by it or
any acquired entity during a taxable year when it or such entity did not
qualify as a RIC under the Code or, if it has such earnings and profits,
shall distribute them to its shareholders prior to the Closing Date.
6.7 The Acquiring Fund shall prepare and file with the SEC a
Registration Statement on Form N-14 (the "Form N-14 Registration
Statement"), as promptly as practicable in connection with the
issuance of the Acquiring Fund Shares as contemplated herein. The
Acquiring Fund shall prepare any pro forma financial statement that may
be required under applicable law to be included in the Form N-14
Registration Statement. SIF shall provide the Acquiring
Fund with all information about SIF and the Acquired Fund
that is necessary to prepare the pro forma financial
statements. SIF and the Acquiring Fund shall cooperate
with each other and shall furnish each other with any
information relating to itself that is required by the 1933 Act,
the 1934 Act, and the 1940 Act, the rules and regulations thereunder,
and applicable state securities laws, to be included in the Form N-14
Registration Statement and the Proxy Statement/Prospectus referred to in
Section 6.8 hereof.
6.8 As promptly as practicable, SIF shall prepare the Proxy Statement/
Prospectus and provide it to the Acquiring Fund, for inclusion in the
Form N-14 Registration Statement, in connection with the Special Meeting of
Acquired Fund Shareholders to consider approval of this Agreement. The
Acquiring Fund agrees to provide SIF with all information applicable to
the Acquiring Fund required for inclusion in the Proxy Statement, as
described in Section 6.7 hereof.
<PAGE>
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SIF AND THE ACQUIRED FUND
The obligations of SIF and the Acquired Fund hereunder shall be
subject to the following conditions precedent:
7.1 This Agreement and the transactions contemplated by this Agreement
shall have been approved by the Board of Directors of the Acquiring Fund in
the manner required by the Acquiring Fund's Amended and Restated Articles
of Incorporation and applicable laws, and this Agreement, the transaction
contemplated by this Agreement, and the proposed amendment to SIF's Amended
and Restated Articles of Incorporation described in Section 6.2 hereof
shall have been approved by the Acquired Fund Shareholders in the manner
required by SIF's Amended and Restated Articles of Incorporation and
Bylaws and applicable laws.
7.2 As of the Closing Date, there shall have been no material adverse
change in the financial position, assets, or liabilities of the Acquiring
Fund since the dates of the financial statements referred to in Section 5.6
hereof. For purposes of this Section 7.2, a decline in the net asset
value per share of the Acquiring Fund due to the effect of normal market
conditions on liquid securities shall not constitute a material adverse
change.
7.3 All representations and warranties of the Acquiring Fund made in
this Agreement, except as they may be affected by the transactions
contemplated by this Agreement, shall be true and correct in all material
respects as if made at and as of the Closing Date.
7.4 The Acquiring Fund shall have performed and complied in all
material respects with its obligations, agreements, and covenants required by
this Agreement to be performed or complied with by it prior to or at the
Closing Date.
7.5 The Acquiring Fund shall have furnished SIF at the Closing Date
with a certificate or certificates of its President and/or Treasurer
as of the Closing Date to the effect that the conditions precedent set forth
in the Sections 7.2, 7.3, 7.4, 7.9, and 7.14 hereof have been fulfilled.
<PAGE>
7.6 SIF shall have received an opinion or opinions of counsel
regarding the transaction, in form reasonably satisfactory to SIF,
and dated as of the Closing Date, to the effect that: (a) the
Acquiring Fund is a corporation duly organized and validly
existing under the laws of the State of Wisconsin; (b) the
shares of the Acquiring Fund issued and outstanding at the
Closing Date are duly authorized, validly issued, fully paid, and
non-assessable by the Acquiring Fund, except to the extent
provided in Section 180.0622(2)(b) of the Wisconsin Statutes
(which is summarized in Section 4.16 of this Agreement), or any
successor provision, and the Acquiring Fund Shares to be delivered
to the Acquired Fund, as provided for by this Agreement, are duly
authorized and upon delivery pursuant to the terms of this Agreement
will be validly issued, fully paid, and non-assessable by the Acquiring
Fund, except to the extent provided in Section 180.0622(2)(b) of the
Wisconsin Statutes (which is summarized in Section 4.16 of this
Agreement), or any successor provision, and to such counsel's
knowledge, no shareholder of the Acquiring Fund has
any option, warrant, or preemptive right to subscription or
purchase in respect thereof; (c) this Agreement has been duly
authorized, executed, and delivered by the Acquiring Fund and
represents a valid and binding contract of Acquiring Fund,
enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto and to the exercise of judicial discretion in
accordance with general principles of equity, whether in a
proceeding at law or in equity; provided, however, that no
opinion need be expressed with respect to provisions of this
Agreement relating to indemnification; (d) the execution and
delivery of this Agreement did not, and the consummation of
the transactions contemplated by this Agreement will not,
violate the Amended and Restated Articles of Incorporation or
Bylaws of the Acquiring Fund or any material agreement known
to such counsel to which the Acquiring Fund is a party or by
which it is bound; (e) to the knowledge of such counsel, no
consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by
Acquiring Fund of the transactions contemplated by this
Agreement, except such as have been obtained under the 1933
Act, the 1934 Act, the 1940 Act, the rules and regulations
under those statutes and such as may be required by state
securities laws, rules, and regulations; and (f) the Acquiring
Fund is registered as an investment company under the 1940 Act
and such registration with the SEC as an investment company
under the 1940 Act is in full force and effect. Such opinion:
(a) shall state that while such counsel have not verified, and
are not passing upon and do not assume responsibility for, the
accuracy, completeness, or fairness of any portion of the Form
N-14 Registration Statement or any amendment thereof or
supplement thereto, they have generally reviewed and discussed
certain information included therein with respect to the
Acquiring Fund with certain of its officers and that in the
course of such review and discussion no facts came to the
attention of such counsel which caused them to believe that,
on the respective effective or clearance dates of the Form
N-14 Registration Statement and any amendment thereof or
supplement thereto and only insofar as they relate to
information with respect to the Acquiring Fund, the Form N-14
Registration Statement or any amendment thereof or supplement
thereto contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading;
(b) shall state that such counsel does not express any opinion
or belief as to the financial statements, other financial
data, statistical data, or information relating to the
Acquiring Fund contained or incorporated by reference in the
Form N-14 Registration Statement; (c) may rely on the opinion
of other counsel to the extent set forth in such opinion,
provided such other counsel is reasonably acceptable to
SIF; and (d) shall state that such opinion is solely
for the benefit of SIF and its Board of Directors and
officers.
7.7 The Form N-14 Registration Statement shall have
become effective under the 1933 Act and no stop
order suspending the effectiveness shall have been
instituted, or to the knowledge of the Acquiring Fund,
contemplated by the SEC.
7.8 The parties shall have received: (a) a memorandum,
in form reasonably satisfactory to each of them, prepared
by counsel regarding the transaction or another person
approved by the parties, concerning the registration of
shares to be issued by the Acquiring Fund pursuant to this
Agreement under applicable state securities laws or
the exemption from registration under such laws; and
(b) assurance reasonably satisfactory to them that all
permits and other authorizations necessary under state
securities laws to consummate the transactions
contemplated herein have been obtained.
<PAGE>
7.9 No action, suit, or other proceeding shall be
threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or
obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
7.10 The SEC shall not have issued any unfavorable
advisory report under Section 25(b) of the 1940 Act
nor instituted any proceedings seeking to enjoin
consummation of the transactions contemplated by this
Agreement under Section 25(c) of the 1940 Act.
7.11 SIF shall have received from the Acquiring Fund:
all other documents, including but not limited to,
checks, share certificates, if any, and receipts, which
SIF or its counsel may reasonably request.
7.12 SCM, in its capacity as transfer agent for the
Acquiring Fund, shall issue and deliver to the President
of SIF, on behalf of the Acquired Fund, a confirmation
statement evidencing the Acquiring Fund Shares to be
credited at the Closing Date or provide evidence
satisfactory to SIF that the Acquiring Fund Shares have
been credited to the accounts of each of the Acquired
Fund Shareholders on the books of the Acquiring Fund.
7.13 At the Closing Date, the registration of the
Acquiring Fund with the SEC as an investment company under
the 1940 Act will be in full force and effect.
7.14 After giving effect to the transactions
contemplated by this Agreement, the Acquiring Fund on the
Closing Date will be in compliance with Rule 2a-7 under the
1940 Act.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund
hereunder shall be subject to the following conditions
precedent:
8.1 This Agreement, the transactions contemplated by
this Agreement, and the proposed amendment to the
Acquired Fund's Amended and Restated Articles of
Incorporation described in Section 6.2 hereof shall have
been approved by the Board of Directors of SIF and
the Acquired Fund Shareholders in the manner required
by SIF's Amended and Restated Articles of Incorporation
and Bylaws and applicable law.
8.2 SIF shall have furnished the Acquiring Fund with the
Statement of Assets and Liabilities of the Acquired Fund,
with values determined as provided in Section 2 hereof, all
as of the Closing Date, certified on its behalf by the
SIF's Treasurer or Assistant Treasurer.
8.3 As of the Closing Date, there shall have been no
material adverse change in the financial position, assets,
or liabilities of the Acquired Fund since the dates of
the financial statements referred to in Section 4.6 hereof.
For purposes of this Section 8.3, a decline in the value of
the Acquired Fund Net Assets due to the effect of normal
market conditions on liquid securities shall not
constitute a material adverse change.
<PAGE>
8.4 All representations and warranties of SIF and the
Acquired Fund made in this Agreement, except as they may
be affected by the transactions contemplated by this
Agreement, shall be true and correct in all material
respects as if made at and as of the Closing Date.
8.5 SIF shall have performed and complied in all
material respects with each of its obligations,
agreements, and covenants required by this Agreement to be
performed or complied with by it prior to or at the Closing Date.
8.6 SIF shall have furnished the Acquiring Fund at the
Closing Date with a certificate or certificates of
its President and/or Treasurer, dated as of the Closing
Date, to the effect that the conditions precedent set forth in
Sections 8.1, 8.3, 8.4, 8.5, 8.12, 8.14. and 8.17 hereof have been
fulfilled.
8.7 SIF shall have duly executed and delivered to the
Acquiring Fund: (a) bills of sale, assignments,
certificates and other instruments of transfer ("Transfer
Documents") as the Acquiring Fund may deem necessary or desirable to
transfer all of the Acquired Fund's right, title, and
interest in and to the Acquired Fund Net Assets; and (b)
all such other documents, including but not limited
to, checks, share certificates, if any, and receipts,
which the Acquiring Fund may reasonably request.
8.8 The Acquiring Fund shall have received an opinion or
opinions of counsel regarding the transaction, in
form reasonably satisfactory to the Acquiring Fund, and dated as
of the Closing Date, to the effect that: (a) SIF is a
Wisconsin corporation duly organized and validly existing
under the laws of the State of Wisconsin; (b) the shares of
the Acquired Fund issued and outstanding at the
Closing Date are duly authorized, validly issued, fully paid
and non-assessable by SIF, except to the extent provided in Section
180.0622(2)(b) of the Wisconsin Statutes (which is
summarized in Section 4.16 of this Agreement), or any
successor provision; (c) this Agreement and the
Transfer Documents have been duly authorized, executed, and
delivered by SIF and represent valid and binding contracts of SIF,
enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and similar laws relating to or
affecting creditors' rights generally and court decisions
with respect thereto and to the exercise of
judicial discretion in accordance with general principles of
equity, whether in a proceeding at law or in equity;
provided, however, that no opinion need be expressed with
respect to provisions of this Agreement relating to indemnification nor
with respect to provisions of this Agreement intended to
limit liability for particular matters to the Acquired Fund
and its assets; (d) the execution and delivery of this
Agreement did not, and the consummation of the transactions
contemplated by this Agreement will not, violate the
Amended and Restated Articles of Incorporation or By-
laws of SIF or any material agreement known to such counsel
to which SIF is a party or by which it is bound; (e) to
the knowledge of such counsel, no consent, approval,
authorization, or order of any court or governmental
authority is required for the consummation by SIF of the
transactions contemplated by this Agreement, except such
as have been obtained under the 1933 Act, the 1934 Act, the
1940 Act, the rules and regulations under those statutes
and such as may be required under state securities
laws, rules, and regulations; and (f) SIF is registered
as an investment company under the 1940 Act and such
registration with the SEC as an investment company under the
1940 Act is in full force and effect. Such opinion: (a)
shall state that while such counsel have not verified, and
are not passing upon and do not assume responsibility
for, the accuracy, completeness, or fairness of any
portion of the Form N-14 Registration Statement or any
amendment thereof or supplement thereto, they have
generally reviewed and discussed certain information
included therein with respect to SIF and the Acquired
Fund with certain officers of SIF and that in the course
of such review and discussion no facts came to the
attention of such counsel which caused them to believe
that, on the respective effective or clearance dates of the
Form N-14 Registration Statement, and any amendment thereof
or supplement thereto and only insofar as they relate
to information with respect to SIF and the Acquired Fund,
the Form N-14 Registration Statement or any amendment
thereof or supplement thereto contained any untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or necessary
to make the statements therein not misleading; (b) shall
state that such counsel does not express any opinion or
belief as to the financial statements, other financial
data, statistical data, or any information relating to SIF
or the Acquired Fund contained or incorporated by
reference in the Form N-14 Registration Statement; (c)
may rely upon the opinion of other counsel to the extent
set forth in the opinion, provided such other counsel is
reasonably acceptable to the Acquiring Fund; and (d) shall
state that such opinion is solely for the benefit of the
Acquiring Fund and its Board of Directors and officers.
<PAGE>
8.9 The property and assets to be transferred to the
Acquiring Fund under this Agreement shall include no
assets which the Acquiring Fund may not properly acquire.
8.10 The Form N-14 Registration Statement shall
have become effective under the 1933 Act and no stop
order suspending such effectiveness shall have been
instituted or, to the knowledge of the Funds, contemplated
by the SEC.
8.11 The parties shall have received: (a) a
memorandum, in a form reasonably satisfactory to each of
them, prepared by counsel regarding the transaction or another
person approved by the parties concerning the registration
of shares to be issued by the Acquiring Fund pursuant to
this Agreement under applicable state securities laws or
the exemption from registration under such laws; and (b)
assurance reasonably satisfactory to them that all permits
and other authorizations necessary under state securities
laws to consummate the transactions contemplated by
this Agreement have been obtained.
8.12 No action, suit, or other proceeding shall be
threatened or pending before any court or governmental
agency in which it is sought to restrain or prohibit, or
obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.13 The SEC shall not have issued any unfavorable
advisory report under Section 25(b) of the 1940 Act
nor instituted any proceeding seeking to enjoin
consummation of the transactions contemplated by this
Agreement under Section 25(c) of the 1940 Act.
8.14 Prior to the Closing Date, the Acquired Fund shall
have declared a dividend or dividends, which, together
with all previous dividends, shall have the effect of
distributing to its shareholders all of its net investment
company income, if any, for each taxable period or year
ending prior to the Closing Date and for the periods
from the end of each such taxable period or year to and
including the Closing Date (computed without regard to
any deduction for dividends paid), and all of its net
capital gain, if any, realized in each taxable period or
year ending prior to the Closing Date and in the periods
from the end of each such taxable period or year to and
including the Closing Date.
<PAGE>
8.15 SCM, in its capacity as transfer agent for the
Acquired Fund, shall have furnished to the Acquiring
Fund immediately prior to the Closing Date a list of the
names and addresses of the Acquired Fund Shareholders and
the number and percentage ownership of outstanding Acquired
Fund Shares owned by each such shareholder as of the close
of regular trading on the NYSE on the Closing Date,
certified on behalf of the Acquired Fund by SIF's
President.
8.16 At the Closing Date, the registration of SIF with
the SEC as an investment company under the 1940 Act
with respect to each series of shares that it offers, shall
be in full force and effect.
8.17 After giving full effect to the transactions
contemplated by this Agreement, the Acquiring Fund on
the Closing Date will be in full compliance with Rule 2a-7
under the 1940 Act.
9. FINDER'S FEES AND OTHER EXPENSES
9.1 Each party represents and warrants to the other that
there is no person or entity entitled to receive any
finder's fees or other similar fees or commission
payments in connection with the transactions provided for
herein.
9.2 Each Fund shall be solely liable for its own
expenses incurred in connection with entering into
and carrying out the transactions contemplated by this
Agreement, whether or not the transactions contemplated
hereby are consummated.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The parties agree that neither party has made
any representation, warranty, or covenant not set forth
herein or referred to in Sections 4 and 5 hereof,
and that this Agreement constitutes the entire agreement
between the parties and supersedes any and all prior
agreements, arrangements, and undertakings relating to the
matters provided for herein.
10.2 The representations, warranties, and
covenants contained in this Agreement or in any
document delivered pursuant hereto or in connection
herewith shall survive the consummation of the
transactions contemplated hereunder for a period of three
years following the Closing Date. In the event of a
breach by SIF or the Acquired Fund of any such
representation, warranty, or covenant, the Acquired Fund,
with respect to any such claim asserted prior to the Closing
Date, and SCM jointly and severally shall be liable to the
Acquiring Fund for any such breach.
<PAGE>
11. TERMINATION
11.1 This Agreement may be terminated by the
mutual agreement of the parties. In addition, either party
may at its option terminate this Agreement at or prior to
the Closing Date because of:
11.1(a) a material breach by the other party
of any representation, warranty, or agreement
contained herein to be performed at or prior to the
Closing Date; or
11.1(b) a condition precedent to
the obligations of either party has not been met and
which reasonably appears will not or cannot be met.
11.2 In the event of any such termination, there shall
be no liability for damages on the part of either Fund or
SIF, or their respective Boards of Directors or officers,
but each shall bear its own expenses incidental to the
preparation and carrying out of this Agreement.
12. INDEMNIFICATION
12.1 The Acquiring Fund shall indemnify, defend, and hold
harmless SIF, its Board of Directors, officers, employees,
and agents (collectively "Acquired Fund Indemnified
Parties") against all losses, claims, demands,
liabilities, and expenses, including reasonable legal
and other expenses incurred in defending third party
claims, actions, suits, or proceedings, whether or not
resulting in any liability to such Acquired Fund
Indemnified Parties and including amounts paid by any one
or more of the Acquired Fund Indemnified Parties in a
compromise or settlement of any such claim, action, suit, or
proceeding, or threatened third party claim, suit, action,
or proceeding, made with the consent of the Acquiring
Fund, arising from any untrue statement or alleged untrue
statement of a material fact contained in the Form N-14
Registration Statement, as filed and in effect with the
SEC, or any application prepared by the Acquiring Fund
with any state regulatory agency in order to register
or qualify the Acquiring Fund Shares to be issued in
connection with the transactions contemplated by this
Agreement under the securities laws thereof
("Application"); or which arises out of or is based upon
any omission or alleged omission to state therein a
material fact required to be stated therein or necessary
to make the statements therein not misleading;
provided, however, that the Acquiring Fund shall only
be liable in such case to the extent that any such loss,
claim, demand, liability, or expense arises out of or is
based upon an untrue statement or alleged untrue statement
or omission or alleged omission about the Acquiring Fund or
the transactions contemplated by this Agreement made in
the Form N-14 Registration Statement or any Application.
12.2 The Acquired Fund, with respect to any
claim asserted prior to the Closing Date, and SCM on a
joint and several basis shall indemnify, defend, and hold harmless
the Acquiring Fund, its Board of Directors, officers,
employees and agents ("Acquiring Fund Indemnified Parties")
against all losses, claims, demands, liabilities, and
expenses, including reasonable legal and other expenses
incurred in defending third party claims, actions, suits,
or proceedings, whether or not resulting in any
liability to such Acquiring Fund Indemnified Parties and
including amounts paid by any one or more of the Acquiring
Fund Indemnified Parties in a compromise or settlement of
any such claim, suit, action, or proceeding, made with the
consent of the Acquired Fund (if it still exists) or
SCM, arising from any untrue statement or alleged untrue
statement of a material fact contained in the Form N-14
Registration Statement, as filed and in effect with the SEC
or any Application; or which arises out of or is based upon
any omission or alleged omission to state therein a material
fact required to be stated therein and necessary to
make the statements therein not misleading; provided,
however, that the Acquired Fund and SCM shall only be liable
in such case to the extent that any such loss, claim,
demand, liability, or expense arises out of or is based
upon an untrue statement or alleged untrue statement or
omission or alleged omission about the Acquired Fund or
about the transactions contemplated by this Agreement made
in the Form N-14 Registration Statement or any Application.
<PAGE>
12.3 A party seeking indemnification hereunder
is hereinafter called the "indemnified party" and the party
from whom the indemnified party is seeking
indemnification hereunder is hereinafter called the
"indemnifying party." Each indemnified party shall notify
the indemnifying party in writing within ten days of the
receipt by one or more of the indemnified parties of any
notice of legal process of any suit brought against or
claim made against such indemnified party as to any matters
covered by this Section, but the failure to notify the
indemnifying party shall not relieve the
indemnifying party from any liability which it may have to
any indemnified party otherwise than under this Section.
The indemnifying party shall be entitled to participate at its
own expense in the defense of any claim, action,
suit, or proceeding covered by this Section, or, if it so
elects, to assume at its own expense the defense thereof
with counsel satisfactory to the indemnified parties;
provided, however, if the defendants in any such
action include both the indemnifying party and any
indemnified party and the indemnified party shall have
reasonably concluded that there may be legal defenses
available to it which are different from or additional
to those available to the indemnifying party, the indemnified
party shall have the right to select separate counsel to
assume such legal defense and to otherwise participate in
the defense of such action on behalf of such indemnified party.
Upon receipt of notice from the indemnifying party to
the indemnified parties of the election by the indemnifying
party to assume the defense of such action, the indemnifying party
shall not be liable to such indemnified parties under
this Section for any legal or other expenses subsequently
incurred by such indemnified parties in connection with
the defense thereof unless (a) the indemnified parties
shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the
provision of the immediately preceding sentence (it being
understood, however, that the indemnifying party shall
not be liable for the expenses of more than one
separate counsel), (b) the indemnifying party does not
employ counsel reasonably satisfactory to the
indemnified parties to represent the indemnified
parties within a reasonable time after notice of
commencement of the action, or (c) the indemnifying
party has authorized the employment of counsel for the
indemnified parties at its expenses.
12.4 This Section will survive the termination of
this Agreement and for a period of three years
following the Closing Date.
<PAGE>
13. LIABILITY OF SIF
Each party acknowledges and agrees that all
obligations of SIF under this Agreement are binding only
with respect to the Acquired Fund; that any liability of
SIF under this Agreement with respect to the Acquired
Fund, or in connection with the transactions contemplated
herein with respect to the Acquired Fund, shall be
discharged only out of the assets of the Acquired Fund;
and that no other portfolio or series of SIF shall
be liable with respect to this Agreement or in
connection with the transactions contemplated herein.
14. AMENDMENTS
This Agreement may be amended, modified, or
supplemented in such manner as may be mutually agreed upon
in writing by the authorized officers of the Acquiring
Fund and SIF; provided, however, that following the
Special Meeting of Acquired Fund Shareholders called by SIF's
Board of Directors pursuant to Section 6.2 hereof, no such
amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be
issued to Acquired Fund Shareholders under this
Agreement to the detriment of such shareholders without
their further approval, provided that nothing contained
in this Section 14 shall be construed to prohibit the
parties from amending this Agreement to change the Closing Date.
15. NOTICES
Any notice, report, statement, or demand required or
permitted by any provisions of this Agreement shall be in
writing and shall be deemed to be properly given
when delivered personally or by telecopier to the party
entitled to receive the notice or when sent by certified
or registered mail, postage prepaid, or delivered to a
recognized overnight courier service, in each case properly
addressed to the party entitled to receive such notice
or communication at 100 Heritage Reserve, Menomonee
Falls, Wisconsin 53051, or such other address as may
hereafter be furnished in writing by notice similarly given
by one party to the other.
16. FAILURE TO ENFORCE
The failure of any party hereto to enforce at any
time any of the provisions of this Agreement shall in no
way be construed to be a waiver of any such provision, nor in any
way to affect the validity of this Agreement or any part
hereof as the right of any party thereafter to enforce each
and every such provision. No waiver of any breach of
this Agreement shall be held to be a waiver of any
other or subsequent breach.
<PAGE>
17. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
17.1 The article and Section headings contained in
this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this
Agreement.
17.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
17.3 This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin.
17.4 This Agreement shall bind and inure to the
benefit of the parties hereto and their respective
successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the
other party. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give
any person, firm, or corporation, other than the parties
hereto and their respective successors and assigns, any
rights or remedies under or by reason of this Agreement.
17.5 It is expressly understood and agreed that
the obligations of SIF and the Acquiring Fund under
this Agreement, including but not limited to any liability
as a result of the breach of any of their
respective representations and warranties, are not
binding on their respective Board of Directors,
shareholders, nominees, officers, agents, or employees
individually, but bind only the respective assets of the
Acquired Fund and the Acquiring Fund.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed by its President and its seal
to be affixed thereto and attested by its Secretary.
Attest: STRONG MONEY MARKET FUND, INC.
_________________________ By:__________________________________________
ATTEST: STRONG INCOME FUNDS, INC.
_________________________ By:__________________________________________
Strong Capital Management, Inc. hereby joins in this Agreement
with respect to and agrees to the matters described in Sections 10.2 and 12.
ATTEST: STRONG CAPITAL MANAGEMENT, INC.
________________________ By:__________________________________________
<PAGE>
EXHIBIT B
FEDERAL RESERVE
INTEREST RATES
THE STRONG U.S TREASURY MONEY FUND
The Strong U.S. Treasury Money Fund seeks current income, a stable share price,
and daily liquidity. The Fund invests only in securities issued directly by the
U.S. government.
SHORT RATES TREND DOWN IN 1995
1995 was a year of changing expectations for the bond market. As the year
began, investors were cautious, anticipating continued economic strength and
higher inflation. In fact, the Federal Reserve actually raised the federal
funds rate (the rate it charges banks for overnight loans) from 5.50% to 6.00%
in February in an effort to cool what it perceived as too-rapid economic growth
and the threat of inflation. But soon after this tightening, evidence of a
significant slowdown in economic activity began to emerge. While the U.S.
economy grew at a fairly strong pace in the first quarter of 1995, data from
April and May suggested that the second quarter's growth rate would be low or
possibly negative, and that inflationary pressures were not being generated.
The abrupt slowdown surprised financial markets and compelled the Fed
to cut the federal funds rate back to 5.75% in early July. Additional signs of
economic lethargy appeared in the fourth quarter, and the Fed again reduced the
rate in December to 5.50%. Short-term rates (as measured by 3-month Treasury
Bills) also fell from a high of 6% in January to a low of about 5% in December.
However, as the chart on the next page shows, the path was not a smooth one,
reflecting a fair amount of uncertainty as investors attempted to divine the
economy's future growth track.
FUND STRATEGY: GO LONG
Following the Federal Reserve's February rate hike, we believed that short-term
rates had reached their peak, at least for the near term. Accordingly, we
gradually lengthened the Fund's average maturity target to a fairly bullish
60-70 days in anticipation of a possible interest-rate cut by the Fed (a 40- to
45-day maturity is considered neutral). Extending the Fund's maturity helped us
lock in higher yields for a longer period of time-and gave the Fund the
potential to maintain an attractive level of income in case short-term interest
rates began to fall.
At the end of December, the Fund's average maturity was 84 days.
WE EXPECT RATES TO DRIFT LOWER
Our current economic view remains positive. With the economy on a modest growth
track and inflation apparently stifled, we look for short-term interest rates
to gradually drift lower, impelled by additional rate cuts by the Federal
Reserve.
YIELD SUMMARY*
THROUGH 12/29/95
7-DAY CURRENT YIELD
4.92%
7-DAY EFFECTIVE YIELD
5.04%
AVERAGE MATURITY
84 DAYS
<PAGE>
Variables that may alter this outlook include a disappointment on the budget
front. Right now, the market appears to expect a meaningful budget agreement,
an expectation partially reflected in current prices. Should progress not be
achieved on the budget, or should the market get an agreement that it feels is
lackluster, we could see a temporary bump up in yields.
Factors that may help improve the U.S. economy in 1996 might come from abroad.
Germany reduced its interest rates late in 1995, allowing other European
nations to follow suit. If less restrictive monetary policies enable the
economies of Europe to break out of their current stagnation, the result could
be more investment and trade with the U.S. and better prospects for the
American economy.
Investors should note that continued slow economic growth in the U.S. won't be
smooth and steady, but is more likely to be a bit bumpy, with indications of a
strong turnaround one quarter and signs of recession the next (1995 was a good
example of such a "choppy" environment). Taken as a whole, however, we expect
modest growth coupled with modest inflation-a favorable combination for income
investors.
As always, we thank you for your confidence and remain committed to meeting
your investment needs in the future.
Cordially,
/s/ Jay N. Mueller
-------------------
Jay N. Mueller
Portfolio Manager
Short-term rates took a bumpy path down in 1995
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
3-month T-Bill yields through December
<S> <C>
12/94 5.69
1/95 6.00
2/95 5.94
3/95 5.87
4/95 5.87
5/95 5.80
6/95 5.57
7/95 5.58
8/95 5.45
9/95 5.41
10/95 5.50
11/95 5.49
12/95 5.08
</TABLE>
Source: Bloomberg
- - --------------------------------------------------------------------------------
*Yields are annualized for the 7-day period ended December 29, 1995. Effective
yield reflects the compounding of income. As of December 29, 1995, the Advisor
temporarily waived fees of .40% and absorbed expenses of .21%. Otherwise, the
Fund's current and effective yields would have been 4.31% and 4.43%,
respectively. An investment in the Fund is neither insured nor guaranteed by
the U.S. government. There can be no assurance that the Fund will be able to
maintain its stable net asset value of $1.00 per share. Yields are historical
and do not represent future yields, which will fluctuate.
The Strong MONEY MARKET Fund
The Strong Money Market Fund seeks current income, a stable share price, and
daily liquidity. The Fund invests in corporate, bank, and government
instruments that present minimal credit risk.
THE FUND PROVIDED OUTSTANDING PERFORMANCE IN 1995
Year-to-date, the Strong Money Market Fund was the best performing general
purpose money fund tracked by Lipper, based on total return. This performance
was achieved through a combination of prudent management and a temporary waiver
of fees and expenses.
SHORT RATES STABLE SO FAR IN 1995
Short-term interest rates remained relatively stable through October 1995,
fluctuating in a narrow range, generally around 5.5%. The "stuck in neutral"
environment was reflected in the actions of the Federal Reserve, which in
February voted to raise the federal funds rate - a critical determining factor
of short-term lending rates - by 0.25% to 6%. However, soon after the February
tightening, evidence of a significant slowdown in economic activity began to
emerge. While the U.S. economy grew at a fairly strong pace in the first
quarter of 1995, data from April and May suggested that the second quarter's
growth rate would be low or possibly negative.
The abrupt slowdown surprised financial markets and compelled the Fed to cut
the federal funds rate back to 5.75% in early July, where it remained through
October.
Short-term rates have traded in a
narrow range in 1995
3-MONTH T-BILL YIELDS THROUGH OCTOBER
<TABLE>
<CAPTION>
<S> <C> <C>
12-94 5.68%
1-95 5.99%
2-95 5.93%
3-95 5.87%
4-95 5.86%
5-95 5.80%
6-95 5.56%
7-95 5.57%
8-95 5.44%
9-95 5.41%
10-95 5.50%
</TABLE>
As of 10-31-95
7-DAY CURRENT YIELD 1 5.82%
7-DAY EFFECTIVE YIELD 5.99%
AVERAGE MATURITY 71 DAYS
FUND STRATEGY: GO LONG
Following the Federal Reserve's February rate hike, we believed that short-term
rates had reached their peak, at least for the near term. Accordingly, we
gradually lengthened the Fund's average maturity target to a fairly bullish
60-70 days in anticipation of a possible interest-rate cut by the Fed.
Extending the Fund's maturity helped us lock in higher yields for a longer
period of time - and gave the Fund the potential to maintain an attractive
level of income in case short-term interest rates began to fall.
In addition, we tended to emphasize fixed-rate securities, which offered a
slight yield advantage over floating-rate paper. This strategy also enhanced
the portfolio's ability to sustain its yield had rates moved significantly
lower. At the end of October, the Fund's average maturity was 71 days.
WE EXPECT RATES TO DRIFT LOWER
Our current economic view remains largely unchanged from the beginning of the
year. With the economy on a modest growth track and inflation apparently
stifled, we look for short-term interest rates to gradually drift lower,
impelled by further federal funds rate reductions by the Fed, possibly
beginning as soon as the last quarter of 1995.
The Strong Funds Annual Report - October 31, 1995
<PAGE>
Variables that may alter this outlook include a disappointment on the budget
front. Right now, the market appears to expect a meaningful budget agreement,
an expectation partially reflected in current prices. Should progress not be
achieved on the budget, we could see a temporary bump up in yields.
Investors should also note that 2.5% annual GDP growth won't be smooth and
steady, but is more likely to be a bit bumpy, with indications of strong growth
one quarter and signs of recession the next. Taken as a whole, however, we
expect slow growth with modest inflation - a favorable environment for income
investors.
We began to gradually phase in the Strong Money Market Fund's fees and expenses
on August 2, 1995. While the fee and expense waivers were in part responsible
for the Fund's top ranking in 1995, we will strive to continue providing you
with the kind of superior investment value that has helped the Fund produce
consistently outstanding long-term performance since its inception ten years
ago.
As always, we thank you for your confidence and remain committed to meeting
your investment needs in the future.
Cordially,
/s/ Jay N. Mueller
- - ------------------
Jay N. Mueller
Portfolio Manager
Lipper Rankings as of 10-31-95(2) (based on total return)
<TABLE>
<CAPTION>
Time Period Rank among Money Market Instrument Funds Percentage
<S> <C> <C>
Year-to-date #1 of 258 Top Fund
1-year #1 of 250 Top 1%
5-year #5 of 171 Top 3%
Since inception (10-22-85) #3 of 106 Top 3%
</TABLE>
Rankings are historical and do not represent future performance.
(1) Yields are annualized for the 7-day period ended October 31, 1995.
Effective yield reflects the compounding of income. An investment in the
Fund is neither insured nor guaranteed by the U.S. government. There can be
no assurance that the Fund will be able to maintain a stable net asset
value of $1.00 per share. Yields are historical and do not represent future
yields, which will fluctuate. The Fund's Advisor temporarily waived fees of
.31% and absorbed expenses of .22% during the 7-day period ended 10-31-95.
Otherwise, the Fund's current yield would have been 5.29%, and its
effective yield would have been 5.46%.
(2) Lipper Analytical Services, Inc., rankings are based on total return with
dividends reinvested. All performance rankings are historical and do not
represent future results. From time to time, the Fund's Advisor has waived
its management fee and absorbed Fund expenses, resulting in higher returns.
The Strong Income Funds Annual Report - October 31, 1995
<PAGE>
EXHIBIT C
AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
STRONG INCOME FUNDS, INC.
The undersigned Secretary of Strong Income Funds,
Inc. (the "Corporation"), hereby certifies that, in
accordance with Section 180.1003 of the Wisconsin
Statutes, the following Amendment was duly adopted by the
Board of Directors of the Corporation on April 24, 1996
and approved by the shareholders of the Strong U.S. Treasury
Money Fund (the "Fund"), a class of the Corporation, on
August 27, 1996 in order to eliminate the
outstanding shares of the Fund in connection with a
reorganization effected pursuant to the terms of the
Agreement and Plan of Reorganization between the
Corporation and the Strong Money Market Fund, Inc.,
attached hereto as Exhibit A (the "Agreement"):
1. Paragraph A of Article IV of the Amended and Restated
Articles of Incorporation is hereby amended by
deleting Paragraph A thereof and inserting the following
as a new paragraph:
"A. The aggregate number of shares which the Corporation
shall have the authority to issue is Ten Billion (10,000,000,000)
shares of Common Stock with a par value of $.00001 per share.
Subject to the following paragraph the authorized shares are
classified as follows:
Class Authorized Number of Shares
----- ---------------------------
Strong High-Yield Bond Fund 300,000,000
The remaining Nine Billion, Seven Hundred Million (9,700,000,000)
shares of Common Stock shall remain unclassified until action is
taken by the Board of Directors pursuant to the following paragraph."
2. The Amendment herein certified shall become
effective on the date is received for filing by the
Secretary of State of Wisconsin. On the Closing Date
(as defined in the Agreement), each outstanding share of
the Fund shall be deemed cancelled and restored to the
status of authorized but unissued shares, and shall be
automatically converted into the right to receive
Acquiring Fund Shares (as defined in the Agreement) in
accordance with the terms of the Agreement. Certificates
representing Fund shares shall be surrendered at the time
and in the manner set forth in the Agreement.
Any such certificates that remain outstanding on the Closing
Date shall be deemed to be automatically canceled, and
shares represented by such certificates shall be restored
to the status of authorized but unissued shares, and
shall be automatically converted as noted above.
Executed in duplicate this ____ day of August, 1996.
STRONG INCOME FUNDS, INC.
By: __________________________
Ann E. Oglanian, Secretary
This instrument was drafted by:
Scott A. Moehrke
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
<PAGE>
STRONG MONEY MARKET FUND, INC.
STRONG INCOME FUNDS, INC. - STRONG U.S. TREASURY MONEY FUND
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
STATEMENT OF ADDITIONAL INFORMATION
(Special Meeting of Shareholders of Strong U.S. Treasury Money Fund)
This Statement of Additional Information is not
a prospectus but should be read in conjunction with the
Combined Proxy Statement and Prospectus, dated July 3,
1996, for the Special Meeting of Shareholders of Strong
U.S. Treasury Money Fund (the "Treasury Fund") to be held
on Tuesday, August 27, 1996. Copies of the Combined Proxy
Statement and Prospectus may be obtained at no charge by
writing the Treasury Fund at the address shown above or by
calling 1-800-368-3863.
Unless otherwise indicated, capitalized terms used
herein and not otherwise defined have the same meanings as
are given to them in the Combined Proxy Statement and
Prospectus.
Further information about SIF, the Treasury Fund, and
the Money Fund is contained in and incorporated by reference
to the Statements of Additional Information of the Treasury
Fund and the Money Fund, dated May 1, 1996, and
March 1, 1996, respectively, the Treasury Fund's Annual
Report to Shareholders, dated December 31, 1995, and the Money
Fund's Annual Report to Shareholders, dated October 31,
1995, all of which are included herewith. Each of the
aforementioned documents may be obtained without charge by
writing to the address shown above or by calling 1-800-368-
3863.
The date of this Statement of Additional Information
is July 3, 1996.
<PAGE>
GENERAL INFORMATION
The shareholders of the Treasury Fund are being asked
to approve or disapprove the Reorganization Agreement dated
May 24, 1996, by and among the SIF, the Treasury Fund, the
Money Fund, and, with respect to certain matters, the
Advisor, and the transactions contemplated thereby. The
Reorganization Agreement contemplates the liquidation of the
Treasury Fund's portfolio securities and instruments
and, to the extent reasonably possible, its other
property and assets and the transfer of the liquidation
proceeds and the Treasury Fund's remaining assets (less a
reserve for certain costs and liabilities) in exchange for
Money Fund Shares. Following the exchange, the Treasury Fund
will make a liquidating distribution of the Money Fund Shares
to the Treasury Fund's shareholders, such that a Treasury Fund
shareholder at the Closing Date will receive full and fractional Money
Fund Shares having an aggregate net asset value equal to the
aggregate net asset value of the shareholder's Treasury
Fund Shares. In connection with the Reorganization, the Treasury Fund's
Amended and Restated Articles of Incorporation will be
amended to cancel all of the Treasury Fund's outstanding
shares and to automatically convert them into rights to
receive Money Fund Shares, in accordance with the
Reorganization Agreement, and to eliminate that class of
SIF's common stock that constitutes the shares of the
Treasury Fund.
A Special Meeting of Shareholders of the Treasury Fund
to consider the Reorganization Agreement and the
transactions contemplated thereby will be held at 100
Heritage Reserve, Menomonee Falls, Wisconsin, on Tuesday,
August 27, 1996, at 8:00 a.m. Central Time, or at such
other location, date, or time as may be selected by the
Chairman of the Board or the President of the Treasury Fund,
or at any adjournment thereof. For further information about
the transaction, see the Combined Proxy Statement and Prospectus.
<PAGE>
PART C. OTHER INFORMATION
Item 15. Indemnification
Officers and directors are insured under a joint errors
and omissions insurance policy underwritten by American
International Group, First State Insurance Company, Chubb
Group, and Gulf Insurance Companies (Aetna-Travelers) in the
aggregate amount of $45,000,000, subject to certain deductions.
Pursuant to authority of Wisconsin Business Corporation Law ("WBCL"),
Article VII of Registrant's Bylaws provides as follows:
Article VII. Indemnification of Officers and Directors
Section 7.01. Mandatory Indemnification. The corporation shall
indemnify, to the full extent permitted by the WBCL, as in
effect from time to time, the persons described in
Sections 180.0850 through 180.0859 (or any successor provisions)
of the WBCL or other provisions of the law of the State of
Wisconsin relating to indemnification of directors and officers,
as in effect from time to time. The indemnification afforded such
persons by this section shall not be exclusive of
other rights to which they may be entitled as a matter
of law.
Section 7.02. Permissive Supplementary Benefits. The
Corporation may, but shall not be required to,
supplement the right of indemnification under Section
7.01 of (a) the purchase of insurance on behalf of any
one or more of such persons, whether or not the
Corporation would be obligated to indemnify such person
under Section 7.01; (b) individual or group
indemnification agreements with any one or more such
persons; and (c) advances for related expenses of such a
person.
Section 7.03. Amendment. This Article VII may be
amended or repealed only by a vote of the shareholders
and not by a vote of the Board of Directors.
Section 7.04. Investment Company Act. In no event
shall the Corporation indemnify any person hereunder
in contravention of any provision of the Investment
Company Act.
Item 16. Exhibits.
(1) Amended and Restated Articles of Incorporation of Registrant. (1)
(2) Restated Bylaws of Registrant. (2)
(3) None.
<PAGE>
(4) Agreement and Plan of Reorganization. (See
Exhibit A to the Combined Proxy Statement
and Prospectus.)
(5) Specimen copy of stock certificate. (2)
(6)(a) Investment Advisory Agreement between Registrant
and Strong Capital Management, Inc. (1)
(7) Distribution Agreement between Registrant and
Strong Distributors, Inc. (2)
(8) None.
(9) Custody Agreement between Registrant and Firstar
Trust Company. (2)
(10) None.
(11) Opinion of counsel that shares of Registrant are
validly issued, fully paid, and non-
assessable (including consent of such firm). [to
be filed by amendment]
(12) None.
(13) Shareholder Servicing Agent Agreement between
Registrant and Strong Capital Management, Inc. (2)
(14) Consent of Coopers & Lybrand L.L.P.
(15) None.
(16) Power of Attorney.
(17)(a) Form of Proxy.
(b) Prospectus and Statement of Additional
Information of Registrant, dated March 1, 1996,
incorporated herein by reference. (2)
(c) Prospectus and Statement of Additional
Information of the Strong U.S. Treasury Money Fund
(the "Treasury Fund"), dated May 1, 1996,
incorporated herein by reference. (3)
(d) Proposed Amendment to Amended and
Restated Articles of Incorporation of the Strong
Income Funds, Inc. (See Exhibit C to the Combined
Proxy Statement and Prospectus.)
<PAGE>
- - ----------------------------------------------------------
Key to Exhibit Reference Numbers
(1) Incorporated herein by reference to Post-Effective
Amendment No. 13 to the Registration Statement on
Form N-1A of Registrant, filed on or about April 20,
1995.
(2) Incorporated herein by reference to Post-Effective
Amendment No. 14 to the Registration Statement on
Form N-1A of Registrant, filed on or about February 27,
1996.
(3) Incorporated herein by reference to Post-Effective
Amendment No. 15 to the Registration on Form N-1A of the
Strong Income Funds, Inc. filed on or about April 26,
1996.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior
to any public reoffering of the securities
registered through the use of a prospectus which is a
part of this registration statement by any person or
party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act of 1933, as
amended, the reoffering prospectus will contain
the information called for by the applicable
registration form for reofferings by persons who
may be deemed underwriters, in addition to the
information called for by the other items of the
applicable form.
(2) The undersigned Registrant agrees that
every prospectus that is filed under paragraph (1)
above will be filed as part of an amendment to the
registration statement and will not be used until
the amendment is effective, and that, in determining
any liability under the Securities Act of 1933,
each post-effective amendment shall be deemed to
be a new registration statement for the securities
offered therein, and the offering of the securities
at that time shall be deemed to be the initial bona
fide offering of them.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant
has duly caused this Registration Statement on Form N-14 to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Menomonee Falls, and State of
Wisconsin on the 24th day of May, 1996.
STRONG MUNICIPAL BOND FUND, INC.
(Registrant)
By: /s/ John Dragisic
--------------------
John Dragisic, President
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement on Form N-14 has been signed
below by the following persons in the capacities and on
the date indicated:
Name Title Date
/s/John Dragisic President (Principal May 24, 1996
- - --------------------- Executive Officer) and
John Dragisic a Director
/s/Ronald A. Neville Treasurer (Principal May 24, 1996
- - --------------------- Financial and
Ronald A. Neville Accounting Officer)
/s/ Richard S. Strong Chairman of the Board May 24, 1996
- - ---------------------- and a Director
Richard S. Strong
Marvin E. Nevins* Director May 24, 1996
- - ---------------------
Marvin E. Nevins
Willie D. Davis* Director May 24, 1996
- - --------------------
Willie D. Davis
William F. Vogt* Director May 24, 1996
- - --------------------
William F. Vogt
Stanley Kritzik* Director May 24, 1996
- - --------------------
Stanley Kritzik
*Thomas P. Lemke signs this document on behalf of each
director marked with an asterisk pursuant to powers of
attorney filed as Exhibit 16 to this Registration Statement.
By: /s/ Thomas P. Lemke
----------------------
Thomas P. Lemke
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No.
- - ----------- ----------- --------
(14) Consent of Coopers & Lybrand L.L.P.
(16) Power of Attorney
(17) (a) Form of Proxy
Consent of Independent Accountants
To the Board of Directors of
Strong Money Market Fund, Inc. and
Strong U.S. Treasury Money Fund
We consent to the incorporation by reference in the Initial Registration
Statement of the Strong Money Market Fund, Inc. on Form N-14 of our reports
dated December 8, 1995 and January 25, 1996, respectively, on our audits of
the financial statements and financial highlights of Strong Money Market
Fund, Inc. and Strong U.S. Treasury Money Fund, respectively, which
reports are included in the Annual Report to Shareholders for the period
from January 1, 1995 to October 31, 1995 and for the year ended
December 31, 1995, respectively, which are also incorporated by reference
in the Registration Statement. We also consent to the reference to our
Firm under the caption "FINANCIAL STATEMENTS".
COOPERS & LYBRAND L.L.P.
Milwaukee, Wisconsin
May 23, 1996
POWER OF ATTORNEY
Each of the undersigned, all of whom are directors of the
Strong Money Market Fund, Inc., whose signatures appear below, do
hereby constitute and appoint John Dragisic, Thomas P. Lemke,
Lawrence A. Totsky, and John S. Weitzer, and each of them, as the
true and lawful attorney-in-fact and agent for the undersigned,
and each of them, with full power of substitution and
resubstitution, for them and in their name, place and stead, in
any and all capacities, to sign a Registration Statement on Form
N-14 for the Strong Money Market Fund, Inc., and any and all
amendments thereto, and any and all other instruments such
attorneys and agents may deem necessary or advisable to enable
the Fund to comply with the Securities Act of 1933, as amended,
and any rules, regulations, orders or other requirements of the
Securities and Exchange Commission thereunder in connection with
the registration of shares or additional shares of common stock
of the Fund, and to file the same, with all exhibits thereto, and
any other documents in connection therewith, with the Securities
and Exchange Commission and any other regulatory body, granting
unto said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes, as
the undersigned, and each of them might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact
and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Signature Title Date
- - --------- ----- ----
/s/ Marvin E. Nevins
- - --------------------- Director April 24, 1996
Marvin E. Nevins
/s/ Willie D. Davis
- - --------------------- Director April 24, 1996
Willie D. Davis
/s/ William F. Vogt
- - --------------------- Director April 24, 1996
William F. Vogt
/s/ Stanley Kritzik
- - -------------------- Director April 24, 1996
Stanley Kritzik
WE NEED YOUR VOTE BEFORE AUGUST 27, 1996
PLEASE, your vote is important and, as a shareholder, you are asked
to be at the Special Meeting either in person or by proxy. If you are
unable to attend the Special Meeting in person, we urge you to complete,
sign, date, and return this proxy card using the enclosed postage
prepaid envelope. Your prompt return of the proxy will help assure a
quorum at the Special Meeting and avoid additional expenses to your
Fund associated with further solicitation. Sending in your proxy will
not prevent you from personally voting your shares at the Special
Meeting and you may revoke your proxy by advising the Secretary of
the Fund in writing (by subsequent proxy or otherwise) of such
revocation at any time before it is voted.
THANK YOU FOR YOUR TIME
STRONG U.S. TREASURY MONEY FUND,
a series of STRONG INCOME FUNDS, INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
The undersigned hereby constitutes and appoints John Dragisic, Thomas P.
Lemke, and John S. Weitzer as proxies, each with power to appoint his, and
hereby authorizes them to represent and to vote by majority, as designated
on the reverse side, all shares of stock of the Fund, which the undersigned
is entitled to vote at the Special Meeting of Shareholders to be held at
Strong Capital Management, Inc., 100 Heritage Reserve, Menomonee Falls,
Wisconsin, on August 27, 1996, at 8:00 a.m., local time, and any
adjournments thereof, with respect to the matters set forth on the reverse
side and described in the Notice of Special Meeting and Proxy Statement and
Prospectus dated June 23, 1996, receipt of which is hereby acknowledged.
DATE:
________________________________
NOTE: Please sign exactly as your
name appears on this Proxy.
If joint owners, EITHER may sign
this Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate
officer, please give your full title.
Signature(s) (Title(s), if applicable)
<PAGE>
WE NEED YOUR VOTE BEFORE AUGUST 27, 1996
This Proxy will be voted as specified. IF NO SPECIFICATION IS MADE, THIS
PROXY WILL BE VOTED IN FAVOR OF ALL PROPOSALS AND IN THE DISCRETION OF THE
PROXIES UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
Please indicate by filling in the appropriate box below, as shown, using
blue or black ink or dark pencil. Do not use red ink.
1. To approve or disapprove an Agreement and Plan of Reorganization by and
among Strong Income Funds, Inc., on behalf of Strong U.S. Treasury Money
Fund, and the Strong Money Market Fund, Inc., and, with respect to
certain matters, Strong Capital Management, Inc., and the transactions
contemplated thereby.
FOR AGAINST ABSTAIN
---- ---- ----
2. To approve or disapprove an amendment to the Amended and Restated
Articles of Incorporation of Strong Income Funds, Inc. (a) to cancel all
of the outstanding shares of the Strong U.S. Treasury Money Fund and
convert them into rights to receive shares of the Strong Money Market
Fund, Inc., in accordance with the Reorganization Agreement and (b) to
eliminate all common stock of Strong Income Funds, Inc. that constitute
the shares of Strong U.S. Treasury Money Fund.
FOR AGAINST ABSTAIN
---- ---- ----
TO BE COMPLETED AND SIGNED ON REVERSE SIDE OF CARD.
