STRONG SCHAFER VALUE FUND INC, 485BPOS, 2000-01-31

STRONG SCHAFER VALUE FUND INC
485BPOS, 2000-01-31

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<PAGE> 1
As filed with the Securities and Exchange Commission
on January 31, 2000

1933 Act File No. 2-99752
1940 Act File No. 811-4384

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 18 [x]

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 18
(Check appropriate box or boxes)

STRONG SCHAFER VALUE FUND, INC.
(Exact Name of Registrant as Specified in Charter)

P.O. Box 2936
Milwaukee, Wisconsin 53201-2936
(Address of Principal Office) (Zip Code)

Registrant's Telephone Number, including Area Code: (800) 368-3863

David K. Schafer
Strong Schafer Value Fund, Inc.
103 Spinnaker Lane
Jupiter, Florida 33477
(Name and Address of Agent for Service)

Copy to:
Andrew H. Shaw, Esq.
Sidley & Austin
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)

[x] on February 1, 2000 pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(1)

[ ] 75 days after filing pursuant to paragraph (a)(2)

[ ] on ________________ pursuant to paragraph (a)(2)
of rule 485

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.

<PAGE> 2
[GRAPHIC]

THE STRONG SCHAFER

VALUE FUND

February 1, 2000

The Securities and Exchange Commission (SEC) has not approved or disapproved of
these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

<PAGE> 3

TABLE OF CONTENTS

YOUR INVESTMENT

KEY INFORMATION
What are the fund's goals? ........................................ 1
What are the fund's principal investment strategies? .............. 1
What are the main risks of investing in the fund? ................. 1
Other risk information ............................................ 2
What are the fund's fees and expenses? ............................ 4
Who are the fund's investment advisor and portfolio manager? ...... 5
What is the fund's relationship with Strong? ...................... 6

OTHER IMPORTANT INFORMATION YOU SHOULD KNOW
Financial Highlights .............................................. 7
Additional Information On Investment Policies and Risks ........... 8

YOUR ACCOUNT

Share Price ....................................................... 11
Foreign Securities ................................................ 11
Buying Shares ..................................................... 12
Selling Shares .................................................... 14
Additional Policies ............................................... 17
Distributions ..................................................... 18
Taxes ............................................................. 18
Services For Investors ............................................ 20
Reserved Rights ................................................... 23
For More Information .............................................. Back Cover

In this prospectus, "we" or "us" refers to Strong Schafer Capital Management,
L.L.C., the investment advisor for the Strong Schafer Value Fund, Inc.

<PAGE> 4

YOUR INVESTMENT

KEY INFORMATION

WHAT ARE THE FUND'S GOALS?
- --------------------------------------------------------------------------------

The STRONG SCHAFER VALUE FUND seeks long-term capital growth. Current income is
a secondary objective.

WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?

The STRONG SCHAFER VALUE FUND invests primarily in common stocks of medium- and
large-capitalization companies. The portfolio manager generally selects stocks
of companies that have

- - a below average price/earnings ratio as compared to that of the Standard &
Poor's 500 Stock Index; and

- - above average projected earnings growth.

The fund generally invests substantially all of its assets in stocks. The fund
invests roughly similar amounts of its assets in each stock in the portfolio.
This approach avoids the overweighting of any individual security being
purchased. The portfolio manager may sell portfolio stocks when they are no
longer attractive based on their growth potential or price.

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?
- --------------------------------------------------------------------------------

GENERAL STOCK RISKS: The fund's major risks are those of investing in the stock
market. This means the fund may experience sudden, unpredictable declines in
value, as well as periods of poor performance. Because stock values go up and
down, the value of the fund's shares may go up and down. When you sell your
investment, you may receive more or less money than you originally invested.

MEDIUM-CAPITALIZATION COMPANIES: The fund may invest in the stocks of
medium-capitalization companies. Medium-capitalization

<PAGE> 5

companies often have narrower markets and more limited managerial and financial
resources than larger, more established companies. As a result, their
performance can be more volatile and they face greater risk of business
reversals which could increase the volatility of the fund's portfolio.

VALUE STYLE INVESTING: Different types of equity securities tend to shift in and
out of favor depending on market and economic conditions, and the performance
resulting from the fund's "value" investment style may sometimes be lower or
higher than that of other types of equity funds, such as those focusing more
exclusively on growth in earnings.

FOREIGN SECURITIES: The fund may invest up to 20% of its assets in foreign
securities. Foreign investments involve additional risks, which include currency
exchange-rate fluctuations, political and economic instability, differences in
financial reporting standards, and less-strict regulation of securities markets.

OTHER RISK INFORMATION
- --------------------------------------------------------------------------------

The fund is appropriate for investors who are comfortable with the risks
described in this prospectus and whose financial goals are five years or more in
the future. The fund is not appropriate for investors concerned primarily with
principal stability.

The return information on the following page illustrates how the fund's
performance can vary and gives some indication of the risks of investing in the
fund by comparing the fund's performance with broad measures of market
performance. Please keep in mind that the fund's past performance does not
represent how it will perform in the future. The information assumes the
reinvestment of all dividends and distributions.

<PAGE> 6

BEST AND WORST QUARTERLY PERFORMANCE

During the periods shown in the above chart, the highest return for a quarter
was 22.52% (quarter ended March 31, 1991) and the lowest return for a quarter
was -24.54% (quarter ended September 30, 1998).

AVERAGE ANNUAL TOTAL RETURNS
As of 12-31-99
<TABLE>
<CAPTION>
FUND/INDEX 1-YEAR 5-YEAR 10-YEAR
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Strong Schafer Value Fund -16.37% 10.78% 11.53%

S&P 500 Stock Index* 21.04% 28.56% 18.21%

Lipper Multi-Cap
Value Funds Index** 5.94% 17.82% 13.03%
</TABLE>

*The S&P 500 Stock Index is the Standard & Poor's 500 Stock Index, which is an
unmanaged index generally representative of the U.S. stock market.

**The Lipper Multi-Cap Value Funds Index is an equally-weighted performance
index of the largest qualifying funds in this Lipper category.
3

<PAGE> 7

WHAT ARE THE FUND'S FEES AND EXPENSES?
- --------------------------------------------------------------------------------

This section describes the fees and expenses that you may pay if you buy and
hold shares of the fund.

SHAREHOLDER FEES
(fees paid directly from your investment)

The fund is 100% no-load, so you pay no sales charges (loads) to buy or sell
shares.

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from fund assets)

The costs of operating the fund are deducted from the fund's assets, which means
you pay them indirectly. These costs are deducted before computing the daily
share price or making distributions. As a result, they do not appear on your
account statement, but instead reduce the total return you receive from your
fund investment. The expense information shown below is based on amounts
incurred during the fund's fiscal year ended September 30, 1999.

ANNUAL FUND OPERATING EXPENSES (AS A PERCENT OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
TOTAL ANNUAL
MANAGEMENT OTHER FUND OPERATING
FEES EXPENSES EXPENSES
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1.00% .35% 1.35%
</TABLE>

Example: This example is intended to help you compare the cost of investing in
the fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in the fund and reinvest all dividends and distributions
for the time periods indicated, and then redeem all of your shares at the end of
those periods. The example also assumes that your investment has a 5% return
each year and that the fund's operating expenses remain the same. Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$137 $428 $739 $1624
</TABLE>

4
<PAGE> 8

WHO ARE THE FUND'S INVESTMENT ADVISOR AND PORTFOLIO MANAGER?

The investment advisor for the fund is Strong Schafer Capital Management, L.L.C.
(SSCM), 103 Spinnaker Lane, Jupiter, Florida 33477, an investment advisor
registered under the Investment Advisers Act of 1940. SSCM is jointly owned by
Schafer Capital Management, Inc. (Schafer) and Strong Capital Management, Inc.
(Strong). On October 16, 1998, SSCM succeeded Schafer as investment advisor for
the fund, a position previously held by Schafer since the fund's inception in
1985. Schafer is the managing owner of SSCM, and thus Schafer indirectly
continues in its role as the fund's investment advisor.

Although SSCM does not serve as investment advisor to any other registered
investment company or other accounts, Schafer, together with its predecessor,
has served as investment advisor to other equity accounts since 1981 and
currently has approximately $600 million under management. An affiliate of
Schafer, Schafer Cullen Capital Management, Inc., serves as investment advisor
to various equity accounts and provides certain services to Schafer, including
services in connection with effecting the fund's securities transactions.

SSCM is responsible for selecting the securities to be purchased and sold for,
and administering the affairs of, the fund. SSCM also furnishes office space,
office facilities, equipment, personnel (other than the services of certain
directors of the fund who are not considered "interested" persons), and
clerical, bookkeeping and administrative services for the fund to the extent not
provided by Strong as the fund's accounting services agent. For its services,
SSCM receives a fee, payable monthly, at an annual rate equal to 1% of the
average daily net assets of the fund (which fee rate is identical to that
previously payable to Schafer). For the fiscal year ended September 30, 1999,
the advisory fee paid by the fund to SSCM (on and after October 16, 1998) and to
Schafer (prior to October 16, 1998) in the aggregate was equal to 1% of the
average daily net assets of the fund.

5
<PAGE> 9

DAVID K. SCHAFER has been the portfolio manager of the fund since its inception
in October 1985. Mr. Schafer has been in the investment management business for
more than 30 years. For more than the past five years, Mr. Schafer has been the
President and the sole shareholder of Schafer.

WHAT IS THE FUND'S RELATIONSHIP WITH STRONG?
- --------------------------------------------------------------------------------

Strong serves as the fund's registrar, dividend-paying agent and transfer agent
and provides fund accounting services to the fund, and Strong Investments, Inc.,
an indirect subsidiary of Strong, acts as the fund's distributor. Strong also
markets the fund as part of the Strong Funds.

Strong is also a co-owner, together with Schafer, of SSCM. Commencing on January
10, 2001, and for eighteen months thereafter, Strong has an option to purchase
Schafer's ownership interest in SSCM at a negotiated formula price. This option
is subject to certain conditions, including procurement of regulatory approvals
and other conditions that may be imposed under applicable law (including any
necessary approval of the shareholders of the fund).

<PAGE> 10

OTHER IMPORTANT INFORMATION
YOU SHOULD KNOW

FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

This information describes investment performance for the periods shown. Certain
information reflects financial results for a single fund share outstanding for
the entire period. "Total Return" shows how much an investment in the fund would
have increased (or decreased) during each period, assuming reinvestment of all
dividends and distributions. These figures have been audited by
PricewaterhouseCoopers LLP, whose report, along with the fund's financial
statements, is included in the fund's annual report.

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30,
SELECTED PER-SHARE DATA 1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $49.85 $67.29 $47.28 $43.46 $36.54
Income From Investment Operations:
Net Investment Income .44 .40 .39 .47 .36
Net Realized and Unrealized
Gains (Losses) on Investments (3.83) (15.81) 21.48 5.00 8.53
- --------------------------------------------------------------------------------
Total from Investment Operations (3.39) (15.41) 21.87 5.47 8.89
Less Distributions:
From Net Investment Income (.36) (.59) (.43) (.38) (.33)
From Net Realized Gains -- (1.44) (1.43) (1.27) (1.64)
Total Distributions (0.36) (2.03) (1.86) (1.65) (1.97)
- --------------------------------------------------------------------------------
Net Asset Value, End of Period $46.10 $49.85 $67.29 $47.28 $43.46
- --------------------------------------------------------------------------------
Ratios and Supplemental Data
Total Return -6.9% -23.5% +47.5% +13.0% +26.0%
Net Assets, End of Period
(In Millions) $659 $1,428 $1,318 $389 $163
Ratio of Expenses to
Average Net Assets 1.4% 1.2% 1.2% 1.3% 1.3%
Ratio of Net Investment Income
to Average Net Assets 0.6% 0.7% 0.8% 1.2% 1.2%
Portfolio Turnover Rate 67.1% 39.0% 22.5% 17.8% 33.2%
</TABLE>

<PAGE> 11

ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND RISKS
- --------------------------------------------------------------------------------

The fund invests in securities which we believe offer the possibility of
increase in value, for the most part common stocks of medium- and
large-capitalization companies having a low stock market valuation at the time
of purchase (as measured by price/earnings ratios as compared with the average
price/earnings ratio of the S&P 500 Stock Index) in relation to investment value
(as measured by prospective earnings and dividend growth rates as compared with
market averages of such rates). We then monitor investments for price movement
and earnings developments. Once a security is purchased, we will generally hold
it in the fund's portfolio until it no longer meets the fund's financial or
valuation criteria.

Although there may be some short-term portfolio turnover, we generally purchase
securities which we believe will appreciate in value over the long term.
However, securities may be sold without regard to the time they have been held
when, in our opinion, investment considerations warrant such action.

The fund does not concentrate its investments in any particular industry or
group of industries, but diversifies its holdings among as many different
companies and industries as seems appropriate in the light of conditions
prevailing at any given time.

Other than as considered appropriate for cash reserves, the fund will generally
maintain a fully invested position in common stocks of publicly-held companies,
primarily in stocks of companies listed on a national securities exchange and
other publicly traded equity securities (common stocks or securities convertible
into common stocks). Investments may also be made in debt securities which are
convertible into equity securities and preferred stocks which are convertible
into common stock and in warrants or other rights to purchase common stock,
which in each case are considered by us to be equity securities. We generally do
not engage in market timing by shifting the portfolio or a significant portion
thereof in or out of the market in anticipation of market fluctuations. Although
the fund's portfolio will normally be fully invested in equity securities as
described

8
<PAGE> 12

above, a portion of its assets may be held from time to time in cash or cash
equivalents when we are unable to identify attractive equity investments.

The fund invests primarily in the securities of U.S. issuers, although it may
also invest up to 20% of its assets in securities of foreign issuers, or
depository receipts for such securities, which are traded in a U.S. market or
are available through a U.S. broker or dealer (regardless of whether traded in
U.S. dollars) and which meet the criteria for investment selection set forth
above. As a result, the fund may be subject to additional investment risks that
are different in some respects from those experienced by a fund which invests
only in securities of U.S. domestic issuers. Such risks include future political
and economic developments, the imposition of foreign withholding taxes on
dividend and interest income payable on the securities, the possible
establishment of exchange controls, the possible seizure or nationalization of
foreign investments, or the adoption of other foreign governmental restrictions
which might adversely affect the payment of amounts due with respect to such
securities. With respect to the securities of foreign issuers which are
denominated in foreign currencies, such risks also include currency
exchange-rate risk. Generally, the fund will not purchase securities which it
believes, at the time of purchase, will be subject to exchange controls;
however, there can be no assurance that such laws may not become applicable to
certain of the fund's investments. In addition, there may be less publicly
available information about a foreign issuer than about a domestic issuer, and
foreign issuers may not be subject to the same accounting, auditing, financial
record keeping and shareholder reporting standards and requirements as domestic
issuers.

There are market risks inherent in any investment, and there is no assurance
that the primary investment objective of the fund will be realized or that any
income will be earned. Moreover, the application of the fund's investment
policies is basically dependent upon our judgment. You should realize that there
are risks in any policy dependent upon judgment and that we do not make any
representation that the objectives of the fund will be achieved or that there
may not be substantial losses in any particular investment.

<PAGE> 13

At any time, the value of the fund's shares may be more or less than your cost
of shares.

The fund's secondary objective of current income is not a fundamental policy of
the fund and may be changed by a vote of a majority of the Board of Directors
without a vote of the shareholders.

10
<PAGE> 14

YOUR ACCOUNT

SHARE PRICE
- --------------------------------------------------------------------------------

Your transaction price for buying, selling, or exchanging shares is the net
asset value per share (NAV). NAV is generally calculated as of the close of
trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time) every
day the Exchange is open. If the Exchange closes at any other time, or if an
emergency exists, NAV may be calculated at a different time. Your share price
will be the next NAV calculated after we accept your order.

NAV is based on the market value of the securities in the fund's portfolio. If
market prices are not available, NAV is based on a security's fair value as
determined in good faith by us under the supervision of the Board of Directors
of the fund.

FOREIGN SECURITIES
Some of the fund's portfolio securities may be listed on foreign exchanges that
trade on days when the fund does not calculate NAV. As a result, the fund's NAV
may change on days when you will not be able to purchase or redeem shares. In
addition, a foreign exchange may not value its listed securities at the same
time that the fund calculates NAV. Events affecting the values of portfolio
securities that occur between the time a foreign exchange assigns a price to the
portfolio securities and the time when the fund calculates NAV generally will
not be reflected in the fund's NAV. However, these events will be reflected in
the fund's NAV when we, under the supervision of the Board of Directors of the
fund, determine that they would have a material effect on the fund's NAV.

Share price or NAV is determined by dividing net assets (the value of the fund's
investments, cash, and other assets minus its liabilities) by the number of
shares outstanding.

11
<PAGE> 15

BUYING SHARES
- --------------------------------------------------------------------------------

INVESTMENT MINIMUMS: When buying shares, you must meet the following minimum
investment requirements.

<TABLE>
<CAPTION>
INITIAL INVESTMENT ADDITIONAL INVESTMENT
MINIMUM MINIMUM
- --------------------------------------------------------------------------------
<S> <C> <C>
Regular accounts $2,500 $50
- --------------------------------------------------------------------------------
Education IRA accounts $500 $50
- --------------------------------------------------------------------------------
Other IRAs and $250 $50
UGMA/UTMA accounts
SSIMPLE IRA, SEP-IRA, the lesser of $250 $50
403(b)(7), Keogh, or $25 per month
- --------------------------------------------------------------------------------
Pension Plan, and Profit
Sharing Plan accounts
</TABLE>

PLEASE REMEMBER...

- - If you use an Automatic Investment Plan, the initial investment minimum to
open an account is waived and the additional investment minimum is $50.

- - You cannot use an Automatic Investment Plan with an Education IRA.

- - If you open a qualified retirement plan account where Strong or one of its
alliance partners provides administrative services, there is no initial
investment minimum.

BUYING INSTRUCTIONS YOU CAN BUY SHARES IN SEVERAL WAYS.

MAIL
You can open or add to an account by mail with a check or money order made
payable to Strong. Send it to the address listed on the back of this prospectus,
along with your account application (for a new account) or an Additional
Investment Form (for an existing account).

12
<PAGE> 16

EXCHANGE OPTION
Sign up for the exchange option when you open your account. To add this option
to an existing account, visit the Investor Services area at www.eStrong.com or
call 800-368-3863 for a Shareholder Account Options Form.

EXPRESS PURCHASE
You can make additional investments to your existing account directly from your
bank account. If you didn't establish this option when you opened your account,
visit the Investor Services area at www.eStrong.com or call us at 800-368-3863
for a Shareholder Account Options Form.

STRONG DIRECT(R)
You can use Strong Direct(R) to add to your investment from your bank account or
to exchange shares between Strong Funds by calling 800-368-7550. See "Services
for Investors" for more information.

STRONG NETDIRECT(R)
You can use Strong netDirect(R) at www.eStrong.com to add to your investment
from your bank account or to exchange shares between Strong Funds. See "Services
for Investors" for more information.

INVESTOR CENTER
You can visit Strong's Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions. The Investor Center only
accepts checks or money orders payable to Strong. It does not accept cash,
third-party checks (checks payable to you written by another party), credit card
convenience checks or checks drawn on banks outside the U.S.

WIRE
Call 800-368-3863 for instructions before wiring funds either to open or to add
to an account. This helps to ensure that your account will be credited promptly
and correctly.

Questions?
Call 800-368-3863
24 hours a day,
7 days a week

13
<PAGE> 17

AUTOMATIC INVESTMENT SERVICES
See "Services for Investors" for detailed information on all of Strong's
automatic investment services. You can sign up for these plans when you open
your account or call 800-368-3863 for instructions on how to add them.

BROKER-DEALER
You may purchase shares through a broker-dealer or other intermediary who may
charge you a fee.

Please Remember...

- - Make checks or money orders payable to Strong.

- - Strong does not accept cash, third-party checks (checks payable to you
written by another party), credit card convenience checks or checks drawn
on banks outside the U.S.

- - You will be charged $20 for every check, money order, wire, or Electronic
Funds Transfer returned unpaid.

SELLING SHARES

You can access the money in your account by selling (also called redeeming) some
or all of your shares by one of the methods below. After your redemption request
is accepted, Strong will normally send you the proceeds on the next business
day.

SELLING INSTRUCTIONS
You can sell shares in several ways.

MAIL
Write a letter of instruction. It should specify your account number, the dollar
amount or number of shares you wish to redeem, the names and signatures of the
owners (or other authorized persons), and your mailing address. Then, mail it to
the address listed on the back of this prospectus.

14
<PAGE> 18

REDEMPTION OPTION
Sign up for the redemption option when you open your account or add it later by
visiting the Investor Service area at www.eStrong.com or by calling 800-368-3863
to request a Shareholder Account Options Form. With this option, you may sell
shares by phone and receive the proceeds in one of three ways:

(1) Strong can mail a check to your account's address. Checks will not be
forwarded by the Postal Service, so please notify Strong if your address
has changed.

(2) Strong can transmit the proceeds by Electronic Funds Transfer to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank
two banking days after Strong processes your redemption.

(3) For a $10 fee, Strong can transmit the proceeds by wire to a properly
pre-authorized bank account. The proceeds usually will arrive at your bank
the first banking day after Strong processes your redemption.

STRONG DIRECT(R)
You can also redeem shares through Strong Direct(R) at 800-368-7550. See
"Services for Investors" for more information.

STRONG NETDIRECT(R)
You can use Strong netDirect(R) at www.eStrong.com to redeem shares. See
"Services for Investors" for more information.

INVESTOR CENTER
You can visit Strong's Investor Center in Menomonee Falls, Wisconsin, near
Milwaukee. Call 800-368-3863 for hours and directions.

AUTOMATIC INVESTMENT SERVICES
You can set up automatic withdrawals from your account at regular intervals. See
"Services for Investors" for information on all of Strong's automatic investment
services.

BROKER-DEALER
You may sell shares through a broker-dealer or other intermediary who may charge
you a fee.

<PAGE> 19

Please Remember...

- - If you recently purchased shares, a redemption request relating to those
shares generally will not be honored until 10 days after Strong receives
the purchase check or electronic transaction.

- - Some transactions and requests require a signature guarantee.

- - If you are selling shares you hold in certificate form, you must submit the
certificates with your redemption request. Each registered owner must sign
the certificates and all signatures must be guaranteed.

- - With an IRA (or other retirement account), you will be charged (i) a $10
annual account maintenance fee for each account of up to a maximum of $30
and (ii) a $10 fee for transferring assets to another custodian or for
closing an account.

- - If you sell shares out of a non-IRA retirement account and you are eligible
to roll the sale proceeds into another retirement plan, Strong will
withhold for federal income tax purposes a portion of the sale proceeds
unless you transfer all of the proceeds to an eligible retirement plan.

- - Further documentation may be required from shareholders which are
corporations, executors, administrators, trustees, guardians, agents or
attorneys-in-fact. - There may be special distribution requirements that
apply to retirement accounts. For instructions on (i) Roth and Traditional
IRA accounts, call 800-368-3863, and (ii) SIMPLE IRA, SEP-IRA, 403(b)(7),
Keogh, Pension Plan, Profit Sharing Plan or 401(k) Plan accounts, call
800-368-2882.

SIGNATURE GUARANTEES help ensure that major transactions or changes to your
account are in fact authorized by you. For example, Strong requires a signature
guarantee on written redemption requests for more than $50,000. You can obtain a
signature guarantee for a nominal fee from most banks, brokerage firms, and
other financial institutions. A notary public stamp or seal cannot be
substituted for a signature guarantee.

16
<PAGE> 20

ADDITIONAL POLICIES
- --------------------------------------------------------------------------------

TELEPHONE AND INTERNET TRANSACTIONS
Once you place a telephone or Internet transaction request, it cannot be
canceled or modified. Strong uses reasonable procedures to confirm that
telephone and Internet transaction requests are genuine. Strong may be
responsible if it does not follow these procedures. You are responsible for
losses resulting from fraudulent or unauthorized instructions received over the
telephone or by computer, provided Strong reasonably believes the instructions
were genuine. To safeguard your account, please keep your Strong Direct(R) and
Strong netDirect(R) passwords confidential. Contact us immediately if you
believe there is a discrepancy between a transaction you performed and the
confirmation statement you received, or if you believe someone has obtained
unauthorized access to your account or password.

During times of unusual market activity, Strong's phones may be busy and you may
experience a delay in placing a telephone request. During these times, consider
trying Strong Direct(R), Strong's 24-hour automated telephone system, by calling
800-368-7550, or Strong netDirect(R), Strong's on-line transaction center, by
visiting www.eStrong.com. Please remember that you must have telephone
redemption as an option on your account to redeem shares through Strong
Direct(R) or Strong netDirect(R).

INVESTING THROUGH A THIRD PARTY
If you invest through a third party (rather than directly with Strong), the
policies and fees may be different than described in this prospectus. Banks,
brokers, 401(k) plans, financial advisors, and financial supermarkets may charge
transaction fees and may set different minimum investments or limitations on
buying or selling shares. Consult a representative of your plan or financial
institution if you are not sure.

17
<PAGE> 21

LOW BALANCE ACCOUNT FEE
Because of the high cost of maintaining small accounts, an annual low balance
account fee of $10 (or the value of the account if the account value is less
than $10) will be charged to all accounts that fail to meet the initial
investment minimum. The fee, which is payable to the transfer agent, will not
apply to (i) any retirement accounts, (ii) accounts with an automatic investment
plan (unless regular investment have been discontinued), or (iii) shareholders
whose combined Strong Funds accounts total $100,000 or more. Strong may waive
the fee, in its discretion, in the event that a significant market correction
lowers an account balance below the account's initial investment minimum.

DISTRIBUTIONS
- --------------------------------------------------------------------------------

DISTRIBUTION POLICY
The fund generally pays you dividends from net investment income and distributes
any net capital gains that it realizes annually.

REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Your dividends and capital gain distributions will be automatically reinvested
in additional shares of the fund unless you choose otherwise. Your other options
are to receive checks for these payments, have them automatically invested in
another Strong Fund, or have them deposited into your bank account. To change
your current option for payment of dividends and capital gain distributions,
please call 800-368-3863.

TAXES
- --------------------------------------------------------------------------------

TAXABLE DISTRIBUTIONS
Any distributions you receive from the fund's net income and gains, exclusive of
net capital gains (also called "net investment income"), are taxable to you as
ordinary dividend income at your income tax rate and will be eligible for the
corporate dividends received deduction only to the extent paid out of the fund's
qualifying

18
<PAGE> 22

dividend income. Distributions you receive from the fund's net long-term capital
gains in excess of its net short-term capital losses (also called "net capital
gains") are generally taxable to you at your long-term capital gains rate. This
is generally true no matter how long you have owned your shares and whether you
reinvest your distributions or take them in cash. You may also have to pay taxes
when you exchange or sell shares if the value of your shares has increased above
their cost basis since you bought them. Any loss recognized on the sale of a
share held for less than six months is treated as long-term capital loss to the
extent of any net capital gain distributions made with respect to such share.

RETURN OF CAPITAL
Under limited circumstances, certain distributions from the fund may be treated
as a return of capital.

YEAR-END STATEMENT
To assist you in tax preparation, after the end of each calendar year, you will
receive a statement of the fund's ordinary dividends and net capital gain
distributions (Form 1099).

BACKUP WITHHOLDING
By law, we must withhold your distributions and proceeds at the 31% "backup
withholding" rate if you have not provided us with complete and correct taxpayer
information such as your Social Security Number (SSN) or Tax Identification
Number (TIN) and you are not exempt from backup withholding.

Generally, if your investment is in a Traditional IRA or other TAX-DEFERRED
ACCOUNT, your dividends and distributions will not be taxed at the time they are
paid, but instead at the time you withdraw them from your account.

COST BASIS is the amount that you paid for your shares. When you sell shares,
you subtract the cost basis from the sale proceeds to determine whether you
realized an investment gain or loss. For example, if you bought a share of the
fund at $10 and you sold it two years later at $11, your cost basis on the share
is $10 and your gain is $1. Remember also that your cost basis on shares
acquired through reinvestment of dividends or distributions is the cost of the
shares purchased on the reinvestment date.

<PAGE> 23

Because everyone's tax situation is unique, you should consult your tax
professional for assistance.

Unless your investment is in a tax-deferred retirement account such as an IRA,
YOU MAY WANT TO AVOID:

- - Investing a large amount in the fund close to the end of the calendar year.
If the fund makes a distribution, you may receive some of your investment
back as a taxable distribution.

- - Selling shares of a mutual fund at a loss and investing in the same fund
within 30 days before or after the sale. This is called a wash sale and you
will not be allowed to claim a tax loss on the transaction.

SERVICES FOR INVESTORS
- --------------------------------------------------------------------------------

Strong provides you with a variety of services to help you manage your
investment. For more details, call 800-368-3863, 24 hours a day, seven days a
week. These services include:

STRONG DIRECT(R) AUTOMATED TELEPHONE SYSTEM
Strong's 24-hour automated response system enables you to use a touch-tone phone
to access current share prices (800-368-3550), to access fund and account
information (800-368-5550), and to make purchases, exchanges or redemptions
among your existing accounts if you have elected these services (800-368-7550).
Passwords help to protect your account information.

ESTRONG.COM
Visit Strong on-line at www.eStrong.com to access the fund's performance and
portfolio holding information. In addition to general information about
investing, Strong's web site offers daily performance information, portfolio
manager commentaries, and information on available account options.

STRONG NETDIRECT(R)
If you are a shareholder, you may use Strong netDirect(R) to access your account
information 24 hours a day from your personal computer. Strong netDirect(R)
allows you to view account history,

20
<PAGE> 24

account balances and recent dividend activity, as well as to make purchases,
exchanges or redemptions among your existing accounts if you have elected these
services. Encryption technology and passwords help to protect your account
information. You may register to use Strong netDirect(R) at www.eStrong.com.

STRONGMAIL
If you register for StrongMail at www.strongmail.com you will receive your
fund's closing price by e-mail each business day. In addition, StrongMail offers
market news and updates throughout the day.

STRONG EXCHANGE OPTION
You may exchange shares of a Strong Fund for shares of another Strong Fund,
either in writing, by telephone or through your personal computer, if the
accounts are identically registered (with the same name, address and taxpayer
identification number). Please ask Strong for the appropriate prospectus and
read it before investing in any of the Strong Funds. Remember, an exchange of
shares of one Strong Fund for those of another Strong Fund is considered a sale
and a purchase of shares for tax purposes and may result in a capital gain or
loss. Some Strong Funds that you may want to exchange into may charge a
redemption fee of 0.50% to 1.00% on the sale of shares held for less than six
months. Purchases by exchange are subject to the investment requirements and
other criteria of the fund purchased.

STRONG AUTOMATIC INVESTMENT SERVICES
You may invest or redeem automatically in the following ways, some of which may
be subject to additional restrictions or conditions.

AUTOMATIC INVESTMENT PLAN (AIP)
This plan allows you to make regular, automatic investments from your bank
checking or savings account.

AUTOMATIC EXCHANGE PLAN
This plan allows you to make regular, automatic exchanges from one eligible
Strong Fund to another.

21
<PAGE> 25

AUTOMATIC DIVIDEND REINVESTMENT
Your dividends and capital gains will be automatically reinvested in
additional shares of the fund unless you choose otherwise. Your other
options are to receive checks for these payments, have them automatically
invested in another Strong Fund, or have them deposited into your bank
account.

NO-MINIMUM INVESTMENT PLAN
This plan allows you to invest without meeting the minimum initial
investment requirements if you invest monthly and you participate in the
AIP, Automatic Exchange Plan, or Payroll Direct Deposit Plan.

PAYROLL DIRECT DEPOSIT PLAN
This plan allows you to send all or a portion of your paycheck, social
security check, military allotment, or annuity payment to the Strong Funds
of your choice.

SYSTEMATIC WITHDRAWAL PLAN

This plan allows you to redeem a fixed sum from your account on a regular
basis. Payments may be sent electronically to a bank account or as a check
to you or anyone you properly designate.

STRONG RETIREMENT PLAN SERVICES
- --------------------------------------------------------------------------------

Strong offers a wide variety of retirement plans for individuals and
institutions, including large and small businesses. For information on:

- INDIVIDUAL RETIREMENT PLANS, including Traditional IRAs and Roth IRAs,
call 800-368-3863.

- QUALIFIED RETIREMENT PLANS, including SIMPLE IRAs, SEP-IRAs,
403(b)(7)s, Keoghs, Pension Plans, Profit Sharing Plans and 401(k)
Plans, call 800-368-2882.

SOME OF THESE SERVICES MAY BE SUBJECT TO ADDITIONAL RESTRICTIONS OR CONDITIONS.
CALL 800-368-3863 FOR MORE INFORMATION.

<PAGE> 26

RESERVED RIGHTS
- --------------------------------------------------------------------------------

We and Strong reserve the right to:

- - Refuse, change, discontinue, or temporarily suspend account services,
including purchase, exchange, or telephone and Strong netDirect(R)
redemption privileges, for any reason.

- - Reject any purchase request for any reason, including exchanges from other
Strong Funds. Generally, we do this if the purchase or exchange is
disruptive to the efficient management of a fund (due to the timing of the
investment or an investor's history of excessive trading).

- - Change the minimum or maximum investment amounts.

- - Delay sending out redemption proceeds for up to seven days (this generally
only applies to very large redemptions without notice, excessive trading,
or during unusual market conditions).

- - Suspend redemptions or postpone payments when the NYSE is closed for any
reason other than its usual weekend or holiday closings, when trading is
restricted by the SEC, or under any emergency circumstances.

- - Make a redemption in-kind (a payment in portfolio securities rather than
cash) if the amount you are redeeming is in excess of the lesser of (i)
$250,000 or (ii) 1% of the fund's assets. Generally, redemption in-kind is
used when large redemption requests may cause harm to the fund and its
shareholders.

- - Close any account that does not meet minimum investment requirements.
Strong will give you notice and 60 days to begin an automatic investment
program or to increase your balance to the required minimum. The initial
minimum investment may be waived at our discretion.

- - Reject any purchase or redemption request that does not contain all
required documentation.

23
<PAGE> 27

NOTES:

- --------------------------------------------------------------------------------

<PAGE> 28
NOTES:

- --------------------------------------------------------------------------------

<PAGE> 29

FOR MORE INFORMATION
- --------------------------------------------------------------------------------

More information about the fund is available upon request at no charge,
including the following:

SHAREHOLDER REPORTS: Shareholder reports contain additional information about
the fund's investments, including a listing of portfolio holdings and, in the
annual shareholder report, a letter from management discussing recent market
conditions, economic trends and investment strategies that significantly
affected your investment's performance during the last fiscal year.

STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI contains details about
investment policies and techniques of the fund and certain other additional
information. A current SAI is on file with the SEC and is incorporated into this
prospectus by reference. This means that the SAI is legally considered a part of
this prospectus even though it is not physically contained within this
prospectus.

To request information or to ask questions:

BY TELEPHONE
414-359-1400 or 800-368-3863

BY MAIL
Strong Funds
P.O. Box 2936
Milwaukee, Wisconsin 53201-2936

ON THE INTERNET
View on-line or download documents:
Strong Funds: www.eStrong.com
SEC*: www.sec.gov

FOR HEARING-IMPAIRED (TDD)
800-999-2780

BY OVERNIGHT DELIVERY
Strong Funds
900 Heritage Reserve
Menomonee Falls, Wisconsin 53051

BY E-MAIL
Send your request to
[email protected]

To reduce the volume of mail you receive, only one copy of most financial
reports and prospectuses is mailed to your household. Call 800-368-3863 if you
wish to receive additional copies, free of charge.

This prospectus is not an offer to sell securities in any place where it would
be illegal to do so.

*Information about the fund (including the SAI) can also be reviewed and copied
at the SEC's Public Reference Room in Washington, D.C. You may call the SEC at
202-942-8090 for information on the operation of the Public Reference Room.
Reports and other information about the fund are also available from the EDGAR
database on the SEC's Internet site at www.sec.gov. You may obtain a copy of
this information, after paying a duplicating fee, by sending a written request
to the SEC's Public Reference Section, Washington, D.C. 20549-0102, or by
sending an electronic request to the following e-mail address:
[email protected].

Strong Schafer Value Fund, Inc., SEC file number: 811-4384
<PAGE> 30
STRONG SCHAFER VALUE FUND, INC.

-----------------------

STATEMENT OF ADDITIONAL INFORMATION

-----------------------

STRONG FUNDS
P. O. Box 2936
Milwaukee, Wisconsin 53201
Telephone: (414) 359-1400
Toll-Free: (800) 368-3863
e-mail: [email protected]
WebSite: www.eStrong.com

February 1, 2000

This Statement of Additional Information ("SAI") is not a prospectus. You
may obtain a copy of the Prospectus dated February 1, 2000 (the "Prospectus") of
Strong Schafer Value Fund, Inc. (the "Fund") without charge by writing or
telephoning the Fund at the address and telephone number set forth above. This
SAI contains information in addition to and more detailed than that set forth in
the Prospectus. You should read this SAI together with the Prospectus and retain
it for future reference.

The Fund's financial statements for its fiscal year ended September 30,
1999 included in its 1999 annual report to shareholders are incorporated by
reference into this SAI. You may obtain a copy of this report without charge by
writing or telephoning the Fund at the address and telephone number set forth
above.

31
<PAGE> 31
TABLE OF CONTENTS
<TABLE>
<CAPTION>

Page
----
<S> <C>
Fund History ..........................................................3
Investment Restrictions ...............................................6
Management of the Fund ................................................7
Control Persons and Principal Holders of Shares .......................9
Investment Advisory and Other Services ...............................10
Description of LLC Agreement .........................................12
Distributor ..........................................................13
Brokerage ............................................................13
Capital Stock ........................................................14
Determination of Net Asset Value .....................................15
Purchase and Redemption of Shares ....................................16
Additional Shareholder Information ...................................16
Tax Status ...........................................................20
Calculation of Performance Data ......................................21
General Information ..................................................27
Shareholder Reports ..................................................29
Custodian ............................................................29
Transfer Agent .......................................................29
Independent Accountants ..............................................29
Financial Statements .................................................30
Additional Information ...............................................30
</TABLE>

32
<PAGE> 32
FUND HISTORY

The Fund was incorporated under the laws of the State of Maryland on
August 12, 1985 and commenced operations on October 22, 1985. On January 10,
1996, the Board of Directors approved a change in the name of the Fund from
Schafer Value Fund, Inc. to Strong Schafer Value Fund, Inc. The Fund's address
is P.O. Box 2936, Milwaukee, Wisconsin 53201.

DESCRIPTION OF THE FUND AND ITS INVESTMENT OBJECTIVE, POLICIES AND RISKS

(See Also "What Are The Fund's Goals?", "What Are The Fund's Principal
investment Strategies?" And "Additional Information On Investment Policies And
Risks" In The Fund's Prospectus And "Investment Restrictions" Below)

GENERAL DESCRIPTION OF THE FUND

The Fund is an open-end, diversified management investment company as
defined in the Investment Company Act of 1940, as amended (the "Investment
Company Act"). An investment company combines the investments of its
shareholders and purchases various securities. Through ownership of shares in
the investment company, shareholders participate in the investment performance
of such securities. As an open-end investment company, the Fund has an
obligation to redeem the shares of any shareholder by paying such shareholder
the net asset value next computed after receipt of a request in proper form for
a redemption of such shares.

INVESTMENT OBJECTIVE

The primary investment objective of the Fund is long-term capital
appreciation, and portfolio securities are selected primarily with a view to
achievement of this objective. The Fund's primary objective is a fundamental
policy of the Fund and may not be changed without shareholder approval as
described below in "Investment Restrictions." Current income is a secondary
objective in the selection of investments. Such secondary objective is not a
fundamental policy of the Fund and may be changed by a vote of a majority of the
Board of Directors without a vote of the shareholders.

DIVERSIFICATION

It is anticipated that the Fund will diversify its investments among
various issuers in different industries. The Fund may, however, from time to
time, invest up to 25% of the value of its total assets in securities of issuers
all of which conduct their principal business activities in the same industry.

PORTFOLIO TURNOVER

The Fund expects to purchase and sell securities at such times as it deems
to be in the best interest of its shareholders. The Fund anticipates that its
annual portfolio turnover rate should not significantly exceed 50%. The Fund,
however, has not placed any limit on its rate of portfolio turnover, and
securities may be sold without regard to the time they have been held when, in
the opinion of the Fund's investment advisor, investment considerations warrant
such action.

CONVERTIBLE SECURITIES

Convertible securities are bonds, debentures, notes, preferred stocks, or
other securities that may be converted into or exchanged for a specified amount
of common stock of the same or a different issuer within a particular period of
time at a specified price or formula. A convertible security entitles the holder
to receive interest normally paid or accrued on debt or the dividend paid on
preferred stock until the convertible security matures or is redeemed, converted
or exchanged. Convertible securities have unique investment characteristics in
that they generally (1) have higher yields than common stocks, but lower

33
<PAGE> 33
yields than comparable non-convertible securities, (2) are less subject to
fluctuation in value than the underlying stock since they have fixed income
characteristics, and (3) provide the potential for capital appreciation if the
market price of the underlying common stock increases.

The value of a convertible security is a function of its "investment
value" (determined by its yield in comparison with the yields of other
securities of comparable maturity and quality that do not have a conversion
privilege) and its "conversion value" (the security's worth, at market value, if
converted into the underlying common stock). The investment value of a
convertible security is influenced by changes in interest rates, with investment
value declining as interest rates increase and increasing as interest rates
decline. The credit standing of the issuer and other factors also may have an
effect on the convertible security's investment value. The conversion value of a
convertible security is determined by the market price of the underlying common
stock. If the conversion value is low relative to the investment value, the
price of the convertible security is governed principally by its investment
value. Generally, the conversion value decreases as the convertible security
approaches maturity. To the extent the market price of the underlying common
stock approaches or exceeds the conversion price, the price of the convertible
security will be increasingly influenced by its conversion value.

FOREIGN SECURITIES AND CURRENCIES

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;

- - costs incurred in conversions between currencies, possible delays in
settlement in foreign securities markets, limitations on the use or
transfer of assets (including suspension of the ability to transfer
currency from a given country), and difficulty of enforcing obligations in
other countries; and

- - diplomatic developments and political or social instability.

Foreign economies may differ favorably or unfavorably from the U.S. economy
in various respects, including growth of gross domestic product, rates of
inflation, currency depreciation, capital reinvestment, resource
self-sufficiency and balance-of-payments position. Many foreign securities may
be less liquid and their prices more volatile than comparable U.S. securities.
From time to time foreign securities may be difficult to liquidate rapidly
without adverse price efforts. Certain costs attributable to foreign investing
such as custody charges and brokerage costs, may be higher than those
attributable to domestic investing.

The risks of foreign investments are generally intensified for investments
in developing countries. Risks of investing in such markets include:

- - less social, political and economic stability;

- - small securities markets and lower trading volume, which may result in a
lack of liquidity and greater price volatility;

- - certain national policies that may restrict the Fund's investment
opportunities, including restrictions on investments in issuers or
industries deemed sensitive to national interests, or expropriation or
confiscation of assets or property, which could result in the Fund's loss
of its entire investment in that market; and

- - less developed legal structures governing private or foreign investment or
allowing for judicial redress for injury to private property.

In addition, brokerage commissions, custodial services, withholding taxes,
and other costs relating to investments in emerging markets generally are more
expensive than in the U.S. and certain more established foreign markets.
Economics in emerging markets generally are heavily dependent upon international
trade and, accordingly, have been and may continue to be affected adversely by
trade barriers, exchange controls, managed adjustments in relative currency
values, and other protectionist measures

34
<PAGE> 34
negotiated or imposed by the countries with which they trade.

Because most foreign securities are denominated in non-U.S. currencies,
the investment performance of the fund could be affected by changes in foreign
currency exchange rates to some extent. The value of the Fund's assets
denominated in foreign currencies will increase or decrease in response to
fluctuations in the value of those foreign currencies relative to the U.S.
dollar. Currency exchange rates can be volatile at times in response to supply
and demand in the currency exchange markets, international balances of payments,
governmental intervention, speculation, and other political and economic
conditions.

MEDIUM-CAPITALIZATION COMPANIES

The Fund may invest in medium-capitalization companies. While
medium-capitalization companies often have the potential for growth, investments
in medium-capitalization companies often involve greater risks than investments
in large, more established companies because medium-capitalization companies may
lack the management experience, financial resources, product diversification,
and competitive strengths of large companies. In addition, in certain instances
the securities of medium-capitalization companies are traded only OTC or on a
regional securities exchange, and the frequency and volume of their trading may
be substantially less than is typical of larger companies. Therefore, the
securities of medium-capitalization companies may be subject to greater and more
abrupt price fluctuations. When making large sales, the Fund may have to sell
portfolio holdings at discounts from quoted prices or may have to make a series
of small sales over an extended period of time due to the trading volume of
medium-capitalization company securities. Investors should be aware that, based
on the foregoing factors, an investment in the Fund may be subject to greater
price fluctuations than an investment in a mutual fund that invests primarily in
the largest, most established companies. The investment advisor's research
efforts may also play a greater role in selecting securities for the Fund than
in a mutual fund that invests exclusively in larger, more established companies.

WARRANTS

The Fund may acquire warrants. Warrants are securities giving the holder the
right, but not the obligation, to buy the stock of an issuer at a given price
(generally higher than the value of the stock at the time of issuance) during a
specified period or perpetually. Warrants may be acquired separately or in
connection with the acquisition of securities. Warrants do not carry with them
the right to dividends or voting rights with respect to the securities that they
entitle their holder to purchase, and they do not represent any rights in the
assets of the issuer. As a result, warrants may be considered to have more
speculative characteristics than certain other types of investments. In
addition, the value of a warrant does not necessarily change with the value of
the underlying securities, and a warrant ceases to have value if it is not
exercised prior to its expiration date.

CASH INVESTMENTS

Cash or cash equivalents in which the Fund may invest when its investment
advisor is unable to identify attractive equity investments include short-term
money market securities such as U.S. Treasury bills, prime-rated commercial
paper, certificates of deposit, variable rate demand notes, or repurchase
agreements. Variable rate demand notes are non-negotiable instruments. The
instruments the Fund invests in are generally rated at least A1 by Standard &
Poor's Corporation. However, the Fund may be susceptible to credit risk with
respect to these notes to the extent the issuer defaults on its payment
obligation.

REPURCHASE AGREEMENTS

The Fund may enter into repurchase agreements with banks or non-bank dealers. In
a repurchase agreement, the Fund buys a security at one price, and at the time
of sale, the seller agrees to repurchase the obligation at a mutually agreed
upon time and price (within seven days). The repurchase agreement,

35
<PAGE> 35
thereby, determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. In the event of a bankruptcy or other default of the seller, the Fund
could experience both delays in liquidating the underlying securities and
losses, including: (a) possible decline in the value of the underlying security
during the period while the Fund seeks to enforce its rights; (b) possible
subnormal levels of income or proceeds and lack of access to income and proceeds
during this period; and (c) expenses of enforcing its rights.

INVESTMENT RESTRICTIONS

The policies set forth below are fundamental policies of the Fund and may not be
changed without approval of the holders of the lesser of: (i) 67% of the Fund's
shares present or represented at a shareholders meeting at which the holders of
more than 50% of such shares are present or represented, or (ii) more than 50%
of the outstanding shares of the Fund. The Fund may not:

1. Purchase securities on margin, participate in a joint-trading
account (the bunching of securities transaction orders with orders of
other accounts managed by the advisor not being considered participation
in a joint-trading account for this purpose), sell securities short, act
as an underwriter or distributor of securities other than shares of the
Fund, lend money (except by purchasing publicly distributed debt
securities or entering into repurchase agreements) or purchase or sell
commodities, commodities futures or real estate (marketable securities of
companies whose business involves the purchase or sale of real estate not
being considered real estate for this purpose).

2. Borrow money or issue senior securities except for temporary bank
borrowings (not in excess of 5% of the value of its total assets) for
emergency or extraordinary purposes, or pledge, mortgage or hypothecate
any of its assets to secure such borrowings to an extent greater than 10%
of the value of the Fund's net assets.

3. Make investments for the purposes of exercising control or
management of any company.

4. Purchase securities of any issuer (other than the United States
or an instrumentality of the United States), if as a result of such
purchase, the Fund would hold more than 10% of the voting securities of
any class of such issuer or more than 5% of the Fund's total assets would
be invested in securities of such issuer.

5. Concentrate more than 25% of the value of its total assets,
exclusive of U.S. government securities, in securities issued by companies
primarily engaged in the same industry.

6. Enter into repurchase agreements with maturities of more than
seven days or invest in securities for which there is no readily available
market if, as a result thereof, such repurchase agreements and securities
would constitute more than 10% of the value of the net assets of the Fund.

7. Invest in put or call options.

Additional investment restrictions adopted by the Fund, which may be
changed by the Board of Directors without a vote of the shareholders, provide
that the Fund may not:

1. Invest in the securities of a foreign issuer or depository
receipts for such securities, if at the time of acquisition more than 20%
of the value of the Fund's assets would be invested in such securities.
(The Fund is permitted to invest up to 20% of its assets in securities of
foreign issuers

36
<PAGE> 36
or depository receipts therefor which are traded in a U.S. market or
available through a U.S. broker or dealer, regardless of whether such
securities or depository receipts are traded in U.S. dollars.)

2. Purchase securities of other investment companies, except on the
open market where no commission or profit results other than the broker's
commission, or as part of a plan of merger, consolidation or
reorganization approved by the shareholders of the Fund.

3. Acquire or retain any security issued by a company, an officer or
director of which is an officer or director of the Fund or an officer,
director or other affiliated person of its investment advisor.

4. Acquire or retain any security issued by a company if any of the
directors or officers of the Fund or directors, officers or other
affiliated persons of its investment advisor beneficially own more than
1/2% of such company's securities and all of the above persons owning more
than 1/2% own together more than 5% of its securities.

5. Purchase any securities which are restricted from sale to the
public without registration under the Securities Act of 1933.

6. Loan portfolio securities except where collateral values are
continuously maintained at no less than 100% by "marking to market" daily
and the practice is fair, just and equitable.

MANAGEMENT OF THE FUND

The Board of Directors of the Fund consists of four individuals, three of
whom are not "interested persons" of the Fund as defined in the Investment
Company Act. The Board of Directors is responsible for managing the Fund's
business and affairs. The Board of Directors has appointed the Fund's officers,
who conduct the daily business of the Fund.

Set forth below is information about the directors and officers of the
Fund. Directors deemed to be "interested persons" of the Fund for purposes of
the Investment Company Act are indicated by an asterisk (*).

Name, Business
Occupation (s) Position(s) Held Principal
Address and Age with Fund and Other Affiliation
- --------------- ---------- --------------------
<S> <C> <C>

</TABLE>

37
<PAGE> 37
<TABLE>
<CAPTION>

Name, Business
Occupation (s) Position(s) Held Principal
Address and Age with Fund and Other Affiliation
- --------------- ---------- --------------------

<S> <C> <C>
David K. Schafer* (59) Director and Director and President, Schafer
103 Spinnaker Lane, President Capital Management Inc. a
Jupiter, Florida 33477 registered investment advisor,
since June 1985; Chairman of
the Board of Schafer Cullen
Capital Management, Inc., a
registered investment advisor,
since January 1983; President,
Chubb Equity Managers Inc., a
wholly-owned subsidiary of the
Chubb Corporation, an
insurance and financial
services company, from October
1992 to October 1996;
President, INCO Capital
Management Inc., a registered
investment advisor, from June
1978 to December 1981.

Timothy C. Collins (43) Director Chief Executive Officer and
Ripplewood Holdings, L.L.C. Senior Managing Director,
One Rockefeller Plaza Ripplewood Holdings, L.L.C. (a
New York, NY 10020 private equity firm); prior to
1995, Senior Managing Director,
Onex Investment Corp.; Director,
Dayton Superior Corporation and
Danielson Holdings Corporation.

Mary P. English, Ph.D. (39) Director Associate Professor of
McDermond Center for Management Economics and Management, and
DePauw University, L32 College Director, McDermond Center for
Greencastle, IN 46135 Management, DePauw University.

Phillip P. Young (56) Director Principal, Gladwyne Partners
Gladwyne Partners LLC LLC (a private equity firm);
435 Devon Park Drive prior to 1998, private
Wayne, PA 19087 investor; prior to April 1,
1996, Managing Director, Lazard
Freres & Co. L.L.C. (investment
banking firm)

James P. Cullen (60) Executive Vice Vice President (since June
Schafer Cullen Capital President 1985) and Director, Schafer
Management, Inc. Capital Management, Inc.,
645 Fifth Avenue President, Schafer Cullen
New York, NY 10022 Capital Management, Inc.,
since January 1983; Director
of the Fund from 1985 to July
1998; Vice President,
Donaldson, Lufkin & Jenrette,
registered broker/dealers,
from January 1979 to December
1982.

</TABLE>

38
<PAGE> 38
<TABLE>
<CAPTION>

Name, Business
Occupation (s) Position(s) Held Principal
Address and Age with Fund and Other Affiliation
- --------------- ---------- --------------------

<S> <C> <C>
Brendan J. Spillane (36) Secretary and Secretary, Treasurer and
Schafer Cullen Capital Treasurer Director (since May 1989)
Management, Inc. Schafer Capital Management,
645 Fifth Avenue Inc.; Treasurer and Equity
New York, NY 10022 Research Analyst, Schafer
Cullen Capital Management,
Inc. since May 1989; Senior
Accountant, Price Waterhouse,
independent accountants, from
August 1985 to April 1989;
Certified Public Accountant
since November 1988.

John S. Weitzer (32) Assistant Senior Counsel of Strong
Strong Capital Management, Inc. Secretary Capital Management, Inc. since
P.O. Box 2936 December 1997. From July 1993
Milwaukee, WI 53201 until December 1997, Associate
Counsel to Strong Capital
Management, Inc.
</TABLE>

Each director of the Fund, other than Mr. Schafer, is paid a director's
fee of $10,000 per year plus $1,250 for each meeting attended and is reimbursed
for the expenses of attendance at such meetings. The Fund does not pay any fees
to its directors who are considered "interested persons" of the Fund or its
investment advisor, as defined in the Investment Company Act. The aggregate
compensation paid by the Fund to its directors who are not such interested
persons ("Non-Interested Directors") during its fiscal year ended September 30,
1999 is set forth below. The Fund does not maintain any deferred compensation,
pension or retirement plans, and no pension or retirement benefits are accrued
as part of Fund expenses. None of the Non-Interested Directors serves as a
director of, or receives any compensation from, any fund in the Strong Funds
complex except for the Fund.

Aggregate
Name of Non-Interested Compensation
Director of the Fund from the Fund
-------------------- -------------

<S> <C>
Timothy C. Collins $13,750
Mary P. English $15,000
Phillip P. Young $13,750
</TABLE>

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES

At December 31, 1999, the following persons were known to the Fund to be
the owners of record of 5% or more of the outstanding shares of the Fund:

39
<PAGE> 39
<TABLE>
<CAPTION>

Name Amount of % of
Share Record Ownership Outstanding
- ----- ---------------- -----------
Shares
------

<S> <C> <C>
Charles Schwab & Co., Inc. 2,186,314 19.2% (1)
101 Montgomery Street
San Francisco, CA 94104

Emre & Co. 852,345 7.5% (1)
c/o Strong Capital
Management, Inc.
P.O. Box 1408
Milwaukee, WI 53201
</TABLE>

(1) Each of Charles Schwab & Co., Inc. and Emre & Co. is the nominee account
for many individual shareholder accounts; the Fund is not aware of the
size or identity of these individual accounts. To the extent that any
person or organization beneficially owns 25% or more of the outstanding
shares of the Fund, such person or organization may be presumed to
"control" the Fund within the meaning of the Investment Company Act and
could vote a significant block of the shares of the Fund on any matter
requiring the approval of shareholders of the Fund.

As of December 31, 1999, officers and directors of the Fund as a group owned
1.25% of the outstanding shares of the Fund.

40
<PAGE> 40
INVESTMENT ADVISORY AND OTHER SERVICES

On August 12, 1998 and October 15, 1998, respectively, the Board of
Directors (including the Non-Interested Director) and the shareholders of the
Fund approved an investment advisory agreement (the "Advisory Agreement")
pursuant to which Strong Schafer Capital Management, L.L.C., 103 Spinnaker Lane,
Jupiter, Florida 33477 (the "Advisor"), furnishes continuous investment advisory
services and management to the Fund. The Advisor is an investment advisory firm
formed in 1997 by Schafer Capital Management, Inc. ("Schafer") and Strong
Capital Management, Inc. ("Strong")pursuant to a Limited Liability Company
Agreement dated as of September 7, 1997(the "LLC Agreement"). See "Who are the
fund's investment advisor and portfolio manager?" and "What is the fund's
relationship with Strong?" in the Prospectus.

The Advisor replaced Schafer as investment advisor to the Fund, a
position Schafer held from the Fund's inception in 1985 until it was succeeded
in such position by the Advisor on October 16, 1998. Under the terms of the LLC
Agreement, Schafer and Strong are the two members of the Advisor, with Schafer
as the managing member. Schafer thus currently has management control, and is
the controlling person, of the Advisor, and Schafer, through its sole portfolio
manager and controlling person, David K. Schafer, effectively continues in its
role as the Fund's investment manager.

Mr. Schafer, President and a Director of the Fund, is also President
and a Director of Schafer. Mr. Cullen, Executive Vice President of the Fund, is
also Vice President and a Director of Schafer. Mr. Spillane, Secretary and
Treasurer of the Fund, is also Secretary and Treasurer and a Director of
Schafer. All of the outstanding stock of Schafer is owned by Mr. Schafer.

A discussion of the advisory fee payable to the Advisor is included
under the caption "Who are the fund's investment advisor and portfolio manager?"
in the Prospectus. For the years ended September 30, 1999, 1998 and 1997, the
Fund paid to the Advisor (on and after October 16, 1998) and to Schafer (prior
to October 16, 1998) an aggregate of $11,552,400, $17,407,737 and $7,583,633,
respectively (the advisory fee rate previously payable to Schafer being
identical to that payable under the Advisory Agreement).

Under the Advisory Agreement and subject to the general supervision
of the Fund's Board of Directors, the Advisor is responsible for making and
implementing investment decisions for the Fund. In addition, the Advisor
furnishes office space, office facilities, equipment, personnel (other than the
services of directors of the Fund who are not interested persons of the
Advisor), and clerical and bookkeeping services for the Fund to the extent not
provided by the Fund's custodian, transfer agent and dividend paying agent, and
accounting services agent. The Fund pays all other expenses of its operation,
including, without limitation, interest, taxes and any governmental filing fees;
brokerage commissions and other costs incurred in connection with the purchase
or sale of securities; compensation and expenses of its Non-Interested
Directors; legal and audit expenses; the fees and expenses of the Fund's
custodian, transfer agent and dividend paying agent, and accounting services
agent; expenses relating to the redemption of shares; expenses of servicing
shareholder accounts; fees and expenses related to the registration and
qualification of the Fund and its shares under Federal and state securities
laws; expenses of printing and mailing reports, notices and proxy material to
shareholders; insurance premiums for fidelity and other insurance coverage;
expenses of preparing prospectuses and statements of additional information and
of printing and distributing them to existing shareholders; and any nonrecurring
expenses, including actions, suits or proceedings to which the Fund is a party
and any obligation which the Fund may incur to indemnify others. The Advisor has
agreed to reimburse the Fund on a monthly basis for all expenses incurred in any
fiscal year (exclusive of taxes, interest, brokerage fees and extraordinary
expenses) which in the aggregate exceed the lowest applicable percentage
limitation prescribed by any state in which the Fund's securities are qualified
for sale. The Fund believes that it is not subject to any such percentage
limitation.

The Advisory Agreement provides that the Advisor shall have no
liability to the Fund or

41
<PAGE> 41
its shareholders in the absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of its obligations under the Agreement.

The Advisory Agreement is not assignable and may be terminated by
either party, without penalty, on 60 days' notice. The Advisory Agreement will
continue in effect until October 16, 2000 (unless sooner terminated) and
thereafter for successive one-year periods so long as it is approved annually(a)
by a majority of the Non-Interested Directors, cast in person at a meeting
called for the purpose of voting on such approval, and (b) either by the Board
of Directors of the Fund or by the vote of shareholders described under
"Investment Restrictions."

The Advisory Agreement is identical to the predecessor investment
advisory agreement dated August 13, 1985 between the Fund and Schafer (the "Old
Advisory Agreement") except for (i) their effective dates, (ii) the replacement
of Schafer by the Advisor as investment advisor to the Fund, (iii) a change to
confirm that the Advisor may utilize Strong or others to arrange for the
placement of orders for the purchase and sale of securities for the account of
the Fund with brokers or dealers selected by or under the supervision of the
Advisor, (iv) changes to confirm that the Advisor's responsibility to provide
bookkeeping and administrative services for the Fund does not extend to such
services as are provided by a fund accounting services agent, and (v) insertion
of wording to address the circumstances under which the Fund may continue to use
the name "Strong".

The Fund, the Advisor and Schafer have adopted a Code of Ethics
("Code") which governs the personal trading activities of all "Access Persons".
Access Persons include every director and officer of the Advisor, Schafer and
the Fund, as well as certain employees of the Adviser or Schafer who have access
to information relating to the purchase or sale of securities by the Advisor or
Schafer on behalf of accounts managed by it. The Code is based upon the
principle that such Access Persons have a fiduciary duty to place the interests
of the Fund and the other clients of the Advisor and Schafer ahead of their own.

The Code provides that Access Persons (other than Access Persons who
are independent directors of the Fund), among other things, must preclear their
securities transactions (with limited exceptions, such as transactions in shares
of mutual funds and direct obligations of the U.S. government), may not acquire
any securities in an initial public offering, other than a new offering of a
registered open-end investment company, and may not profit from short-term
trading in securities. In addition, Access Persons generally may not purchase or
sell any security which is contemporaneously being purchased or sold, or to
their knowledge, is being considered for purchase or sale, by the Advisor or
Schafer on behalf of the Fund or other managed accounts. Finally, the Code
provides for trading "black out" periods of seven calendar days during which
time Access Persons who are portfolio managers may not trade in securities which
have been purchased or sold by any mutual fund or other account managed by the
portfolio manager.

Certain of the Advisor's or Schafer's clients may have investment
objectives similar to the Fund and certain investments may be appropriate for
the Fund and for other clients advised by the Advisor or Schafer. From time to
time, a particular security may be bought or sold for only one client or in
different amounts and at different times for more than one but less than all
such clients. In addition, a particular security may be bought for one or more
clients when one or more clients are selling such security, or purchases or
sales of the same security may be made for two or more clients on the same day.
In any such event, such transactions will be averaged as to price and allocated
as to amount in accordance with the daily purchase or sale orders actually
placed for each client. In some cases, this procedure could have a detrimental
effect on the price or amount of the securities purchased by or sold by the
Fund. In other cases, however, it is believed that the ability of the Fund to
participate, to the extent permitted by law, in volume transactions will produce
better results for the Fund. The sale of the Fund's shares is not a determining
factor in these transactions.

The Fund has no proprietary or exclusive rights in the names
"Strong" or "Schafer" or

42
<PAGE> 42
any logo or service mark furnished by Strong or the Advisor, and may use such
names and any such logos or service marks only so long as the Advisory Agreement
with the Advisor remains in effect and the Advisor has the right to use such
names under the LLC Agreement.

Strong, the Advisor's non-managing member, provides investment
management services for mutual funds and other investment portfolios
representing assets of approximately $37 billion. Strong began conducting
business in 1974. Since then, its principal business has been providing
investment advice for individuals and institutional accounts, such as pension
and profit-sharing plans, as well as mutual funds, several of which are
available through variable insurance products. Strong's address is 100 Heritage
Reserve, Menomonee Falls, Wisconsin 53051.

Since February 1, 1996, Strong has served as the Fund's accounting
services agent. For this service, Strong has received fees aggregating $88,918
$115,078 and $66,064, respectively, during the Fund's fiscal years ended
September 30, 1999, 1998 and 1997 pursuant to a fund accounting services
agreement providing for a fee to Strong equal to $20,000 on the first $40
million of the Fund's average daily net assets, .01% of the next $200 million of
the Fund's average daily net assets, and .005% of the Fund's average daily net
assets in excess of $240 million.

Strong also serves as the Fund's dividend-paying agent, transfer
agent and shareholder servicing agent. As such, Strong handles all amounts
delivered to it by or for the account of the Fund, issues confirmations for
shares of the Fund upon receipt of payment, redeems on behalf of the Fund shares
of the Fund upon receipt of written requests in proper order and acts as
dividend disbursing agent for the Fund. For this service, Strong receives
compensation from the Fund at an annual rate of $21.75 per open account and
$4.20 per closed account, plus reimbursement of its expenses. Strong
Investments, Inc., an indirect subsidiary of Strong, acts as the Fund's
distributor. Strong also markets shares of the Fund as part of the Strong
Family of Funds. See "What is the fund's relationship with Strong?" in the
Prospectus.

From time to time, the Fund may pay, directly or indirectly through
arrangements with Strong, amounts to financial intermediaries that provide
transfer-agent type and/or other administrative services relating to the Fund to
their customers or other persons who beneficially own interests in the Fund,
such as participants in 401(k) plans. These services may include, among other
things, sub-accounting services, transfer agent-type services, answering
inquiries relating to the Fund, transmitting, on behalf of the Fund, proxy
statements, annual reports, updated prospectuses, other communications regarding
the Fund, and related services as the Fund or the intermediaries' customers or
such other persons may reasonably request. In such cases, to the extent paid by
the Fund, the Fund will not pay more for these services through intermediary
relationships than it would if the intermediaries' customers were direct
shareholders in the Fund.

DESCRIPTION OF LLC AGREEMENT

The Advisor is a Delaware limited liability company registered as an
investment adviser under the Investment Advisers Act of 1940. Its address is 103
Spinnaker Lane, Jupiter, Florida 33477. The LLC Agreement provides that the
Advisor is currently to be managed by its managing member, Schafer, which has
sole control and management of the Advisor's business and affairs (provided that
certain actions may not be taken without the consent of Strong). The only other
member of the Advisor is Strong. Strong's current membership interest in the
Advisor is non-managing.

The LLC Agreement provides that, commencing January 10, 2001 and for
eighteen months thereafter, Strong will have the option to purchase the
membership interest of Schafer in the Advisor at a negotiated formula price.
This option is subject to certain conditions, including procurement of
regulatory approvals and other conditions that may be imposed by applicable
law(including any necessary approval of the Fund's shareholders). In the event
of Strong's purchase of Schafer's membership interest in the Advisor pursuant to
the exercise of this option, David K. Schafer's ongoing role with respect to the
Advisor and the Fund will be subject to discussion among the parties. If
Strong's option

43
<PAGE> 43
is not exercised by Strong or Strong otherwise fails to purchase Schafer's
membership interest in the Advisor for any reason other than failure to obtain
necessary regulatory approvals or a breach by Schafer of certain obligations
relating to the effectuation of such purchase, Schafer shall have certain
rights, including the right to purchase Strong's membership interest in the
Advisor for an amount equal to its fair market value at that time. If Strong's
option is exercised but Strong does not purchase Schafer's membership interest
in the Advisor subject thereto because of failure to obtain necessary regulatory
approvals, Schafer is under an obligation to negotiate in good faith with
respect to an appropriate modification of the relationship and arrangements
between Strong and Schafer.

The LLC Agreement provides that, in the event of the bankruptcy of
Schafer, or the death or disability of David K. Schafer, Strong shall have the
option, subject to conditions comparable to those relating to Strong's option
described in the preceding paragraph, to purchase the membership interest of
Schafer in the Advisor at a price equal to the fair market value thereof, and
upon the bankruptcy of Strong, Schafer shall have the option to purchase the
membership interest of Strong in the Advisor at a price equal to the fair market
value thereof.

The LLC Agreement provides that if Strong ceases to be a member of
the Advisor, Schafer will use its best efforts to cause the Fund to cease to use
Strong's name within sixty (60) days and that if Strong exercises its rights
under the option described above, the Advisor shall have the irrevocable right
to use the name "Schafer" for the Advisor and the Fund.

DISTRIBUTOR

Pursuant to a distribution agreement dated as of January 10, 1996,
Strong Investments, Inc., 900 Heritage Reserve, Menomonee Falls, Wisconsin
53051, an affiliate of Strong, acts at the request of the Fund and the Advisor
as the Fund's agent to effect the distribution of the Fund's shares in certain
jurisdictions. Strong Investments, Inc. is not entitled to receive any
compensation from the Fund for its services under this agreement. The agreement
may be terminated at any time (a) by the Board of Directors of the Fund or by a
vote of a majority of the outstanding voting securities of the Fund on 60 days'
written notice to Strong Investments, Inc. and the Advisor or (b) by Strong
Investments, Inc. on 60 days' written notice to the Fund and the Advisor. The
agreement shall terminate in the event of its assignment by Strong Investments,
Inc. If not so terminated, the agreement shall continue in effect from year to
year only so long as such continuance is approved annually by the Board of
Directors or stockholders of the Fund, and, in either event, by a majority of
those directors who are not interested persons of any party to the agreement.

From time to time, the Distributor may hold in-house sales incentive
programs for its associated persons under which these persons may receive
non-cash compensation awards in connection with the sale and distribution of a
fund's shares. These awards may include items such as, but not limited to,
gifts, merchandise, gift certificates, and payment of travel expenses, meals and
lodging. As required by the National Association of Securities Dealers, Inc.
rules in this area, any in-house sales incentive program will be multi-product
oriented, i.e., any incentive will be based on an associated person's gross
production of all securities and will not be based on the sales of shares of any
specifically designated mutual fund.

BROKERAGE

The Advisor is responsible for selecting brokers and dealers to
effect purchases or sales of securities for the account of the Fund. In
selecting such brokers, it is the policy of the Advisor to seek the best
execution of orders at the most favorable price in light of the overall quality
of brokerage and research services provided, as described in this and the
following paragraph. In selecting brokers to effect portfolio transactions, the
determination of what is expected to result in best execution at the most

44
<PAGE> 44
favorable price involves a number of largely judgmental considerations. Among
these are the Advisor's evaluation of the broker's efficiency in executing and
clearing transactions, block trading capability (including the broker's
willingness to position securities), the broker's familiarity with the security
and the broker's financial strength and stability. The most favorable price to
the Fund means the best net price without regard to the mix between purchase or
sale price and commission, if any. For the fiscal years ended September 30,
1999, 1998 and 1997, the Fund paid total brokerage commissions of $4,387,808,
$3,591,215 and $1,874,130, respectively. The changes in the amount of brokerage
commissions over these three fiscal years are due principally to changes in the
Fund's assets. The Fund's annual portfolio turnover rate is set forth in the
Prospectus under "Financial Highlights."

In allocating the Fund's brokerage, the Advisor will also take into
consideration the research, analytical, statistical and other information and
services provided by the broker, such as general economic reports and
information, reports or analyses of particular companies or industry groups and
technical information and the availability of the brokerage firm's analysts for
consultation. While the Advisor believes these services have substantial value,
they are considered supplemental to the Advisor's own efforts in the performance
of its duties under the Advisory Agreement. As permitted by the Advisory
Agreement and in accordance with Section 28(e) of the Securities Exchange Act of
1934, as amended, the Advisor may pay brokers higher brokerage commissions than
might be available from other brokers if the Advisor determines in good faith
that such amount paid is reasonable in relation to the value of the overall
quality of the brokerage, research and other services provided. Other clients of
the Advisor may indirectly benefit from the availability of these services to
the Advisor, and the Fund may indirectly benefit from services available to the
Advisor as a result of transactions for other clients.

Arrangements exist with broker-dealers whereby the Advisor obtains
computerized stock quotation and news services, performance and ranking
services, portfolio analysis services and other research services in exchange
for the direction of portfolio transactions which generate dealer concessions or
brokerage (agency) commissions for such broker-dealers. From time to time, the
Advisor may make other similar arrangements with brokers or dealers which agree
to provide research services in consideration of dealer concessions or brokerage
commissions. Consistent with the Advisor's fiduciary duties to the Fund,
brokerage will be directed to such brokers or dealers pursuant to any such
arrangement only when the Advisor believes that the commissions charged are
reasonable in relation to the value and overall quality of the brokerage and
research services provided. For the year ended September 30, 1999, the total
amount of Fund brokerage transactions and related brokerage commissions directed
in consideration of research services provided to Schafer were $209,631,320 and
$335,342, respectively, exclusive of dealer concessions from underwritten
offerings.

The Advisor has entered into an arrangement with Schafer Cullen
Capital Management, Inc. ("SCCM") whereby SCCM performs certain administrative
responsibilities with respect to the execution of portfolio trades at the
direction of the Advisor, including trades which the Advisor may effect on
behalf of the Fund.

The Fund held 30,000 shares of Merrill Lynch & Co., Inc., having a
value of $20,156,250, as of September 30, 1999. Merrill Lynch & Co. is one of
the Fund's regular broker/dealers as defined in Rule 10b-1 under the Investment
Company Act.

CAPITAL STOCK

The Fund has an authorized capital of 250 million shares consisting
of only one class of stock -- Common Stock, $.10 par value. Shareholders are
entitled to one vote per share, to such distributions as may be declared by the
Fund's Board of Directors out of funds legally available therefor, and upon
liquidation to participate ratably in the assets available for distribution.
There are no conversion or sinking-fund provisions applicable to the shares, and
shareholders have no preemptive rights and may

45
<PAGE> 45
not cumulate their votes in the election of directors. The shares are redeemable
and are transferable. All shares issued and sold by the Fund will be fully paid
and non-assessable.

The Fund is not required to hold annual meetings of shareholders.
However, special meetings may be called from time to time for such purposes as
electing or removing directors, terminating or reorganizing the Fund, changing
fundamental policies or voting on other matters when required by the Investment
Company Act.

DETERMINATION OF NET ASSET VALUE

The Fund is 100% no load. This means that an investor may purchase,
redeem or exchange shares at the Fund's net asset value ("NAV")without paying a
sales charge. Generally, when an investor makes any purchases, sales or
exchanges, the price of the investor's shares will be the NAV next determined
after Strong receives a request in proper form (which includes receipt of all
necessary and appropriate documentation and subject to available funds). If
Strong receives such a request prior to the close of the New York Stock Exchange
("NYSE") on a day which the NYSE is open, the share price will be the NAV
determined that day. The NAV for the Fund is normally determined as of 4:00 p.m.
Eastern Time ("ET") each day the NYSE is open. The NYSE is open for trading
Monday through Friday except New Year's Day, Martin Luther King Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Additionally, if any of the aforementioned
holidays falls on a Saturday, the NYSE will not be open for trading on the
preceding Friday, and when any such holiday falls on a Sunday, the NYSE will not
be open for trading on the succeeding Monday, unless unusual business conditions
exist, such as the ending of a monthly or yearly accounting period. The Fund
reserves the right to change the time at which purchases, redemptions and
exchanges are priced if the NYSE closes at a time other than 4:00 p.m. ET or if
an emergency exists. The Fund's NAV is calculated by taking the fair value of
the Fund's total assets, subtracting all its liabilities, and dividing by the
total number of shares outstanding. Expenses are accrued daily and applied when
determining the NAV.

The Fund's portfolio securities are valued based on market
quotations or at a fair value as determined by the method selected by the Fund's
Board of Directors.

Equity securities traded on a national securities exchange or NASDAQ
are valued at the last sale price on the national securities exchange on which
such securities are primarily traded or NASDAQ, as the case may be. Securities
for which there were no transactions on a given day or securities not listed on
an exchange or NASDAQ are valued at the average of the most recent bid and asked
prices. Other exchange-trade securities (generally foreign securities) will
generally be valued based on market quotations.

Debt securities are valued by a pricing service that utilizes
electronic date processing techniques to determine values for normal
institutional-sized trading units of debt securities without regard to sale or
bid prices when such techniques are believed to more accurately reflect the fair
market value for such securities. Otherwise, sale or bid prices are used. Any
securities or other assets for which market quotations are not readily available
are valued at fair value as determined in good faith by the Board of Directors.
Debt securities having remaining maturities of 60 days or less when purchased
are valued by the amortized cost method. Under this method of valuation, a
security is initially valued at its acquisition cost, and thereafter,
amortization of any discount or premium is assumed each day, regardless of the
impact of the fluctuating rates on the market value of the instrument.

Securities quoted in foreign currency, if any, are valued daily in
U.S. dollars at the foreign currency exchange rates that are prevailing at the
time the daily NAV per share is determined. Although the Fund values its foreign
assets in U.S. dollars on a daily basis, it does not intend to convert its
holdings of foreign currencies into U.S. dollars on a daily basis. Foreign
currency exchange rates are

46
<PAGE> 46
generally determined prior to the close of trading on the NYSE. Occasionally,
events affecting the value of foreign investments and such exchange rates occur
between the time at which they are determined and the close of trading on the
NYSE. Such events would not normally be reflected in a calculation of the Fund's
NAV on that day. If events that materially affect the sale of the Fund's foreign
investments or the foreign currency exchange rates occur during such period, the
investments may be valued at their fair value as determined in good faith by the
Advisor under the direction of the Board of Directors of the Fund.

PURCHASE AND REDEMPTION OF SHARES

For a general discussion of how shares of the Fund are purchased and
redeemed and how the Fund values such shares for such purposes, see "YOUR
ACCOUNT" in the Prospectus. Such discussions are incorporated herein by
reference.

The Fund does not consider the U.S. Postal Service or other
independent delivery services to be its agents. Therefore, deposit in the mail
or with such services, or receipt at Strong's post office box, of purchase
applications or redemption requests does not constitute receipt by Strong or the
Fund.

Broker-dealers which effect purchases or sales of shares of the Fund
on behalf of their customers may impose a transaction charge on such customers
for performing such services. No such transaction charge is imposed if shares
are purchased directly from the Fund, without the employment of the services of
a broker-dealer.

The Fund, in its discretion, may permit an investor to purchase
shares of the Fund at net asset value in exchange for securities held by the
investor, provided that the Fund may acquire such securities consistent with its
investment policies. For purposes of determining the number of Fund shares to be
received in exchange for any accepted securities, the Fund will value such
securities in the same manner as is used by the Fund to value its own assets.

ADDITIONAL SHAREHOLDER INFORMATION

TELEPHONE AND INTERNET EXCHANGE/REDEMPTION PRIVILEGES

Strong employs reasonable procedures to confirm that instructions
communicated by telephone or the Internet are genuine. The Fund may not be
liable for losses due to unauthorized or fraudulent instructions. Such
procedures include but are not limited to requiring a form of personal
identification prior to acting on instructions received by telephone or the
Internet, providing written confirmations of such transactions to the address of
record, tape recording telephone instructions and backing up Internet
transactions.

MOVING ACCOUNT OPTIONS AND INFORMATION

When establishing a new account by exchanging funds from an
existing Strong Funds account, some account options (such as checkwriting,
telephone exchange, telephone purchase and telephone redemption), if existing on
the account from which money is exchanged, will automatically be made available
on the new account unless the shareholder indicates otherwise, or the option is
not available on the new account. Subject to applicable Strong Funds policies,
other account options, including automatic investment, automatic exchange and
systematic withdrawal, may be moved to the new account at the request of the
shareholder. If allowed by Strong Funds policies (i) once the account options
are established on the new account, the shareholder may modify or amend the
options, and (ii) account options

47
<PAGE> 47
may be moved or added from one existing account to another new or existing
account. Account information, such as the shareholder's address of record and
social security number, will be copied from the existing account to the new
account.

REDEMPTION IN-KIND

The Fund has elected to be governed by Rule 18f-1 under the
Investment Company Act, which obligates the Fund to redeem shares in cash, with
respect to any one shareholder during any 90-day period, up to the lesser
of $250,000 or 1% of the assets of the Fund. If the Advisor determines that
existing conditions make cash payments undesirable, redemption payments may be
made in whole or in part in securities or other financial assets, valued for
this purpose as they are valued in computing the NAV for the Fund's shares (a
"redemption in-kind"). Shareholders receiving securities or other financial
assets in a redemption in-kind may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences. If you
expect to make a redemption in excess of the lesser of $250,000 or 1% of the
Fund's assets during any 90-day period and would like to avoid any possibility
of being paid with securities in-kind, you may do so by providing the Fund with
an unconditional instruction to redeem at least 15 calendar days prior to the
date on which the redemption transaction is to occur, specifying the dollar
amount of shares to be redeemed and the date of the transaction (please call
800-368-3863). This will provide the Fund with sufficient time to raise the cash
in an orderly manner to pay the redemption and thereby minimize the effect of
the redemption on the interests of the Fund's remaining shareholders.

SHARES IN CERTIFICATE FORM

Certificates will be issued for shares held in your Fund account
only upon written request. An investor will, however, have full shareholder
rights whether or not a certificate is requested. If you are selling shares you
hold in certificate form, you must submit the certificate with your redemption
request, duly endorsed.

DOLLAR COST AVERAGING

Strong Fund's Automatic Investment Plan, Payroll Direct Deposit
Plan, and Automatic Exchange Plan are methods of implementing dollar cost
averaging. Dollar cost averaging is an investment strategy that involves
investing a fixed amount of money at regular time intervals. By always investing
the same set amount, an investor will be purchasing more shares when the price
is low and fewer shares when the price is high. Ultimately, by using this
principle in conjunction with fluctuations in share price, an investor's average
cost per share may be less than the average transaction price. A program of
regular investment cannot ensure a profit or protect against a loss during
declining markets. Since such a program involves continuous investment
regardless of fluctuating share values, investors should consider their ability
to continue the program through periods of both low and high share-price levels.

FINANCIAL INTERMEDIARIES

If an investor purchases or redeems shares of the Fund through a
financial intermediary, certain features of the Fund relating to such
transactions may not be available or may be modified. In addition, certain
operational policies of the Fund, including those related to settlement and
dividend accrual, may vary from those applicable to direct shareholders of the
Fund and may vary among intermediaries. Please consult your financial
intermediary for more information regarding these matters. Certain financial
intermediaries may charge an advisory, transaction, or other fee for their
services. Investors will not be charged for such fees if investors purchase or
redeem Fund shares directly from the Fund without the intervention of a
financial intermediary.

SIGNATURE GUARANTEES

A signature guarantee is designed to protect shareholders and the
Fund against fraudulent

48
<PAGE> 48
transactions by unauthorized persons. In the following instances, the Fund will
require a signature guarantee for all authorized owners of an account.

- -- when adding the telephone redemption option to an existing account;

- -- when transferring the ownership of an account to another individual or
organization;

- -- when submitting a written redemption request for more than $50,000;

- -- when requesting to redeem or redeposit shares that have been issued in
certificate form;

- -- if requesting a certificate after opening an account;

- -- when requesting that redemption proceeds be sent to a different name or
address than is registered on an account;

- -- if adding/changing a name or adding/changing an owner or an account; and

- -- if adding/changing the beneficiary on a transfer-on-death account.

A signature guarantee may be obtained from any eligible guarantor
institution, as defined by the SEC. These institutions include banks, savings
associations, credit unions, brokerage firms, and others. Please note that a
notary public stamp or seal is not acceptable.

RIGHT OF SET-OFF

To the extent not prohibited by law, the Fund, any other Strong
Fund, and the Advisor, each has the right to set-off against a shareholder's
account balance with a Strong Fund, and to redeem from such account, any debt
the shareholder may owe any of these entities. This right applies even if the
account is not identically registered.

BROKERS RECEIPT OF PURCHASES AND REDEMPTION ORDERS

Strong has authorized certain brokers to accept purchase and
redemption orders on the Fund's behalf. These brokers are, in turn, authorized
to designate other intermediaries to accept purchase and redemption orders on
the Fund's behalf. The Fund will be deemed to have received a purchase or
redemption order when an authorized broker or, if applicable, a broker's
authorized designee, accepts the order. Purchase and redemption orders received
in this manner will be priced at the Fund's NAV next computed after they are
accepted by an authorized broker or the broker's authorized designee.

RETIREMENT PLANS

The Fund makes available through Strong the following retirement
planning vehicles:

TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNT (IRA): Everyone under age 70 1/2 with
earned income may contribute to a tax-deferred Traditional IRA. Strong offers a
prototype plan for you to establish your own Traditional IRA. You are allowed to
contribute up to the lesser of $2,000 or 100% of your earned income each year to
your Traditional IRA (or up to $4,000 between your Traditional IRA and your
non-working spouses' Traditional IRA). Under certain circumstances, your
contribution will be deductible.

ROTH IRA: Taxpayers, of any age, who have earned income, and whose adjusted
gross income ("AGI") does not exceed $110,000 (single) or $160,000 (joint) can
contribute to a Roth IRA. Allowed contributions begin to phase out at
$95,000(single) or $150,000 (joint). You are allowed to contribute up to the
lesser of$2,000 or 100% of earned income each year into a Roth IRA. If you also
maintain a Traditional IRA, the

49
<PAGE> 49
maximum contribution to your Roth IRA is reduced by any contributions that you
make to your Traditional IRA. Distributions from a Roth IRA, if they meet
certain requirements, may be federally tax free. If your AGI is $100,000 or
less, you can convert your Traditional IRAs into a Roth IRA. Conversions of
earnings and deductible contributions are taxable in the year of the
distribution. The early distribution penalty does not apply to amounts converted
to a Roth IRA even if you are under age 59 1/2.

EDUCATION IRA: Taxpayers may contribute up to $500 per year into an Education
IRA for the benefit of a child under age 18. Total contributions to any one
child cannot exceed $500 per year. The contributor must have adjusted income
under $110,000 (single) or $160,000 (joint) to contribute to an Education IRA.
Allowed contributions begin to phase out at $95,000 (single) or $150,000(joint).
Withdrawals from the Education IRA to pay qualified higher education expenses
are federally tax free. Any withdrawal in excess of higher education expenses
for the year are potentially subject to tax and an additional 10% penalty.

DIRECT ROLLOVER IRA: To avoid the mandatory 20% federal withholding tax on
distributions, you must transfer the qualified retirement or IRC section 403(b)
plan distribution directly into an IRA. The distribution must be eligible for
rollover. The amount of your Direct Rollover IRA contribution will not be
included in your taxable income for the year.

SIMPLIFIED EMPLOYEE PENSION PLAN (SEP-IRA): A SEP-IRA plan allows an employer to
make deductible contributions to separate IRA accounts established for each
eligible employee.

SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN (SAR SEP-IRA): A SAR SEP-IRA
plan is a type of SEP-IRA plan in which an employer may allow employees to defer
part of their salaries and contribute to an IRA account. These deferrals help
lower the employees' taxable income. Please note that you may no longer open new
SAR SEP-IRA plans (since December 31, 1996). However, employers with SAR SEP-IRA
plans that were established prior to January 1, 1997 may still open accounts for
new employees.

SIMPLIFIED INCENTIVE MATCH PLAN FOR EMPLOYEES (SIMPLE-IRA): A SIMPLE-IRA plan is
a retirement savings plan that allows employees to contribute a percentage of
their compensation, up to $6,000, on a pre-tax basis, to a SIMPLE-IRA account.
The employer is required to make annual contributions to eligible employees'
accounts. All contributions grow tax-deferred.

DEFINED CONTRIBUTION PLAN: A defined contribution plan allows self-employed
individuals, partners, or a corporation to provide retirement benefits for
themselves and their employees. Plan types include: profit-sharing plans, money
purchase pension plans, and paired plans (a combination of a profit-sharing plan
and a money purchase plan).

401(K) PLAN: A 401(k) plan is a type of profit-sharing plan that allows
employees to have a part of their salary contributed on a pre-tax basis to a
retirement plan which will earn tax-deferred income. A 401(k) plan is funded by
employee contributions, employer contributions, or a combination of both.

403(B)(7) PLAN: A 403(b)(7) plan is a tax-sheltered custodial account designed
to qualify under section 403(b)(7) of the IRC and is available for use by
employees of certain educational, non-profit, hospital, and charitable
organizations.
The employer or individual, as the case may be, should consul this
or her tax advisor or attorney as to the applicability of the Defined
Contribution Plan, the 401(k) Plan, the 403(b)(7) Plan, the SIMPLE, the SEP or
the IRA (including Traditional, Roth and Education IRAs) to his or her
particular circumstances. Additionally, since these retirement programs involve
commitments covering future years, the investment objectives of the Fund, as
described in the Prospectus and in this Statement of Additional Information,
should be carefully considered.

PROMOTIONAL ITEMS

50
<PAGE> 50
From time to time, Strong and/or Distributor may give de minimis
gift or other immaterial consideration to investors who open new accounts or add
to existing accounts with the Strong Funds. In addition, from time to time,
Strong and/or Distributor, alone or with other entities or persons, may sponsor,
participate in conducting, or be involved with sweepstakes, give-aways,
contests, incentive promotions, or other similar programs ("Give-Aways"). This
is done in order to, among other things, increase the number of uses of and
visits to Strong's Internet web site. As part of the Give-Aways, persons may
receive cash or other awards, including, without limitation, gifts, merchandise,
gift certificates, travel, meals, and lodging. Under the Strong's and
Distributor's standard rules for Give-Aways, Strong's and the Distributor's
employees, subsidiaries, advertising and promotion agencies, and members of
their families, are not eligible to participate in the Give-Aways.

TAX STATUS

The Fund has qualified, and intends to remain qualified, as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended. In order to remain qualified, the Fund must, among other
things, (i) derive in each taxable year at least 90% of its gross income from
dividends, interest, gains from the sale or other disposition of stock or
securities or foreign currencies or other income derived with respect to its
business of investing in such stock, securities or currencies, and (ii)
diversify its holdings so that, at the end of each quarter of its taxable year,
(a) at least 50% of the value of its assets is represented by cash, cash items,
U.S. Government securities, and other securities limited, in respect of any one
issuer, to a value not greater than 5% of the value of the Fund's total assets
and 10% of the outstanding voting securities of such issuer and (b) not more
than 25% of the value of its assets is invested in the securities of any one
issuer (other than the U.S. Government).

As a regulated investment company, the Fund is generally not subject
to U.S. federal income tax on its income and gains distributed to shareholders,
provided the Fund distributes to its shareholders at least 90% of its net
investment income (i.e., net income and gains, exclusive of net capital gains)
each year.

If the Fund purchases shares in a foreign corporation treated as a
"passive foreign investment company" ("PFIC") for U.S. federal income tax
purposes, however, the Fund may be subject to U.S. federal income tax, and an
additional charge in the nature of interest, on a portion of distributions from
such foreign corporation and on gain from the disposition of such
shares(collectively referred to as "excess distributions"), even if such excess
distributions are paid by the Fund as a dividend to its shareholders. In certain
limited circumstances, the Fund may be eligible to make a qualified electing
fund election with respect to certain PFICs in which it owns shares. Such an
election would enable the Fund to avoid the taxes on excess distributions by
including in income each year the Fund's pro rata share of the PFIC's income and
gains for that year (whether or not the Fund's share of such income and gains
are distributed to the Fund). Alternatively the Fund may be eligible to elect
under certain circumstances to treat its stock in certain PFICs as having been
sold on the last business day of each taxable year of the Fund for the stock's
fair market value, in which case the Fund would (subject to certain
exceptions)generally avoid the taxes on excess distributions. These elections,
therefore, may cause the Fund to recognize income in a particular year in excess
of the distributions it receives in that year from the PFIC.

If the Fund engages in certain hedged transactions, the transaction
may be treated as a deemed sale of the appreciated property which may accelerate
the gain on the hedged transaction.

In general, distributions of net capital gain, when designated as
such by the Fund, are taxable to you as long-term capital gains, regardless of
how long you have held your Fund shares.

A non-deductible 4% excise tax will be imposed on the Fund to the
extent the Fund does not distribute during each calendar year (i) 98% of its
ordinary income for such calendar year, (ii) 98% of

51
<PAGE> 51
its capital gain net income for the one-year period ending on October 31 of such
calendar year and (iii) certain other amounts not distributed in previous years.
The Fund intends to distribute its income and gains in a manner so as to avoid
the imposition of this 4% excise tax.

Distributions declared by the Fund in October, November or December
of a year, payable to shareholders as of a record date in such a month, and paid
during the following January, will be treated for U.S. federal income tax
purposes as paid by the Fund and received by shareholders as of December 31 of
the calendar year declared.

If the net asset value of shares is reduced below a shareholder's
cost by a distribution, such distribution would be taxable as described in the
Prospectus, even though the distribution might be viewed in economic terms as a
return of capital. For U.S. federal income tax purposes, the shareholder's
original cost continues as his tax basis and on redemption his gain or loss is
the difference between such basis and the redemption price.

Income tax withholding at a rate of 20% is applicable to any
distribution from a qualified retirement plan, such as the Defined Contribution
Plan or 403(b)(7) Plan, where the distribution is eligible for tax-free rollover
treatment but is not transferred directly to a specified retirement vehicle such
as another qualified plan or an IRA. All qualified retirement plans and plans
subject to Section 403(b) of the Internal Revenue Code must provide participants
and certain other distributees with an election to have an eligible rollover
distribution transferred directly to certain specified retirement vehicles. If a
shareholder receives a distribution which is subject to the 20% withholding
requirement and wishes to roll the distribution into another retirement vehicle
such as an IRA within 60 days without subjecting any part of the distribution to
income tax (and a possible additional 10% penalty tax if the shareholder has not
attained age 59 1/2), the shareholder will have to contribute to the IRA or
other retirement vehicle the amount of the distribution (after withholding) plus
an amount equal to the amount withheld. If the full amount of the distribution
(including the amount withheld) is not contributed to another qualified
retirement vehicle within 60 days, the portion of the distribution which is not
contributed will be subject to income tax, plus a possible additional 10%
penalty if the shareholder has not attained age 59 1/2. The amount withheld will
be applied to reduce the shareholder's Federal income tax liability and may be
refunded by the Internal Revenue Service to the shareholder upon filing a
Federal income tax return if the total amount withheld from the shareholder
exceeds such tax liability.

The rules broadly define distributions which qualify for rollover
treatment. Shareholders who expect to receive distributions which may qualify
for rollover treatment and therefore may be subject to 20% withholding should
consult their own tax advisers for a complete discussion of the impact of these
rules on such distributions.

The foregoing is only a general summary of certain provisions of the
Internal Revenue Code and current Treasury regulations applicable to the Fund
and its shareholders. The Internal Revenue Code and such regulations are subject
to change by legislative or administrative action.

The tax consequences to a foreign shareholder of investing in the
Fund may be different from those described herein. Foreign shareholders are
advised to consult their own tax advisors with respect to the particular tax
consequences to them of an investment in the Fund.

Distributions to shareholders may also be subject to state and local
taxes. Investors are urged to consult their own tax advisors regarding the
application of federal, state and local tax laws.

CALCULATION OF PERFORMANCE DATA

The Fund may advertise "average annual total return," "total
return," and "cumulative total return." Each of these figures is based upon
historical results and does not represent the future performance of the Fund.
Average annual total return and total return figures measure both the net

52
<PAGE> 52
investment income generated by, and the effect of any realized and unrealized
appreciation or depreciation of, the underlying investments in the Fund assuming
the reinvestment of all dividends and distributions. Total return figures are
not annualized and simply represent the aggregate change of the Fund's
investments over a specified period of time.

The annual total return of the Fund varies and during the ten year
period ended December 31, 1999 ranged from -16.37% in 1999 to 40.9% in 1991. The
average annual total return of the Fund for the one, five and ten year periods
ended December 31, 1999, were -16.37%, 10.78% and 11.53%, respectively, computed
in accordance with the rules for standardized computation of performance as
established by the Securities and Exchange Commission. Such rules for
standardized computation of performance provide for determining percentage
changes, carried out to two decimal places, based on changes in net asset value
as described in the preceding paragraph.

The Fund's performance will vary from time to time and your shares,
when redeemed, may be worth more or less than their original cost. You should
not consider past results as representative of future performance. Factors
affecting the Fund's performance include, among other things, general market
conditions, the composition of the Fund's portfolio, and operating expenses. In
reporting performance, the Fund makes no adjustment for taxes payable by
shareholders on reinvested income dividends and capital gains distributions.

The Fund may also advertise comparative performance information
obtained from industry or financial publications. The Fund may compare its
performance to that of other mutual funds with similar investment objectives and
to stock or other relevant indices. From time to time, articles about the Fund
regarding its performance or ranking may appear in national publications. Some
of these publications may publish their own rankings or performance reviews of
mutual funds, including the Fund. Reference to or reprints of such articles may
be used in the Fund's promotional literature.

COMPARISONS

U.S. TREASURY BILLS, NOTES, OR BONDS. Investors may want to compare
the performance of the Fund to that of U.S. Treasury bills, notes, or bonds,
which are issued by the U.S. Government. Treasury obligations are issued in
selected denominations. Rates of Treasury obligations are fixed at the time of
issuance and payment of principal and interest is backed by the full faith and
credit of the Treasury. The market value of such instruments will generally
fluctuate inversely with interest rates prior to maturity and will equal par
value at maturity. Generally, the values of obligations with shorter maturities
will fluctuate less than those with longer maturities.

CERTIFICATES OF DEPOSIT. Investors may want to compare the Fund's
performance to that of certificates of deposit offered by banks and other
depositary institutions. Certificates of deposit may offer fixed or variable
interest rates and principal is guaranteed and may be insured. Withdrawal of the
deposits prior to maturity normally will be subject to a penalty. Rates offered
by banks and other depositary institutions are subject to change at any time
specified by the issuing institution.

MONEY MARKET FUNDS. Investors may also want to compare performance
of the Fund to that of money market funds. Money market fund yields will
fluctuate and shares are not insured, but share values usually remain stable.

LIPPER ANALYTICAL SERVICES, INC. ("LIPPER") AND OTHER INDEPENDENT
RANKING ORGANIZATIONS. From time to time, in marketing and other fund
literature, the Fund's performance may be compared to the performance of other
mutual funds in general or to the performance of particular types of mutual
funds with similar investment goals, as tracked by independent organizations.
Among these organizations, Lipper, a widely used independent research firm which
ranks mutual funds by overall performance, investment objectives, and assets,
may be cited. Lipper performance figures are based on changes in net asset
value, with all income and capital gains dividends reinvested. Such calculations
do not

53
<PAGE> 53
include the effect of any sales charges imposed by other funds. The Fund will be
compared to Lipper's appropriate fund category, that is, by fund objective and
portfolio holdings. The Fund's performance may also be compared to the average
performance of its Lipper category.

MORNINGSTAR, INC. The Fund's performance may also be compared to the
performance of other mutual funds by Morningstar, Inc., which rates funds on the
basis of historical risk and total return. Morningstar's ratings range from five
stars (highest) to one star (lowest) and represent Morningstar's assessment of
the historical risk level and total return of a fund as a weighted average for
3, 5, and 10 year periods. Ratings are not absolute and do not represent future
results.

INDEPENDENT SOURCES. Evaluations of fund performance made by
independent sources may also be used in advertisements concerning the Fund,
including reprints of, or selections from, editorials or articles about the
Fund, especially those with similar objectives. Sources for fund performance and
articles about the Fund may include publications such as Money, Forbes,
Kiplinger's, Smart Money, Financial World, Business Week, U.S. News and World
Report, The Wall Street Journal, Barron's, and a variety of investment
newsletters.

INDICES. The Fund may compare its performance to a wide variety of
indices. There are differences and similarities between the investments that a
Fund may purchase and the investments measured by the indices.

HISTORICAL ASSET CLASS RETURNS. From time to time, marketing
materials may portray the historical returns of various asset classes. Such
presentations will typically compare the average annual rates of return of
inflation, U.S. Treasury bills, bonds, common stocks, and small stocks. There
are important differences between each of these investments that should be
considered in viewing any such comparison. The market value of stocks will
fluctuate with market conditions, and small-stock prices generally will
fluctuate more than large-stock prices. Stocks are generally more volatile than
bonds. In return for this volatility, stocks have generally performed better
than bonds or cash over time. Bond prices generally will fluctuate inversely
with interest rates and other market conditions, and the prices of bonds with
longer maturities generally will fluctuate more than those of shorter-maturity
bonds. Interest rates for bonds may be fixed at the time of issuance, and
payment of principal and interest may be guaranteed by the issuer and, in the
case of U.S. Treasury obligations, backed by the full faith and credit of the
U.S. Treasury.

STRONG FUNDS. The Strong Funds offer a comprehensive range of
conservative to aggressive investment options. The Strong Funds and their
investment objectives are listed below.

FUND NAME INVESTMENT OBJECTIVE

<S> <C>
Strong Investors Money Fund Current income, a stable share price, and
daily liquidity.
- -------------------------------------------------------------------------------
Strong Money Market Fund Current income, a stable share price, and
daily liquidity.
- -------------------------------------------------------------------------------
Strong Heritage Money Fund Current income, a stable share price, and
daily liquidity.
- -------------------------------------------------------------------------------
Strong Municipal Money Federally tax-exempt current income, a stable
Market Fund share-price, and daily liquidity.
- -------------------------------------------------------------------------------
Strong Municipal Advantage Federally tax-exempt current income with a
Fund very low degree of share-price fluctuation.
- -------------------------------------------------------------------------------
Strong Advantage Fund Current income with a very low degree of
share-price fluctuation.
- -------------------------------------------------------------------------------
Strong Short-Term Total return by investing for a high level of
Municipal Bond Fund federally tax-exempt current income with a low
degree of share-price fluctuation.
- -------------------------------------------------------------------------------
Strong Short-Term Bond Fund Total return by investing for a high level of
current income with a low degree of
share-price fluctuation.
- -------------------------------------------------------------------------------
Strong Short-Term Global Total return by investing for a high level of
Bond Fund income with a low degree of share-price
fluctuation.
- -------------------------------------------------------------------------------
Strong Short-Term High Total return by investing for a high level of
Yield Municipal Fund federally tax-exempt current income with a
moderate degree of share-price fluctuation.
- -------------------------------------------------------------------------------
</TABLE>

54
<PAGE> 54
<TABLE>
<CAPTION>

FUND NAME INVESTMENT OBJECTIVE

<S> <C>
Strong Short-Term High Total return by investing for a high level of
Yield Bond Fund current income with a moderate degree of
share-price fluctuation.
- -------------------------------------------------------------------------------
Strong Government Total return by investing for a high level of
Securities Fund current income with a moderate degree of
share-price fluctuation.
- -------------------------------------------------------------------------------
Strong Municipal Bond Fund Total return by investing for a high level of
federally tax-exempt current income with a
moderate degree of share-price fluctuation.
- -------------------------------------------------------------------------------
Strong Corporate Bond Fund Total return by investing for a high level of
current income with a moderate degree of
share-price fluctuation.
- -------------------------------------------------------------------------------
Strong High-Yield Total return by investing for a high level of
Municipal Bond Fund federally tax-exempt current income.
- -------------------------------------------------------------------------------
Strong Conservative Total return by investing primarily for income
Portfolio and secondarily for capital growth.
- -------------------------------------------------------------------------------
Strong High-Yield Bond Fund Total return by investing for a high level of
current income and capital growth.
- -------------------------------------------------------------------------------
Strong Global High-Yield Total return by investing for a high level of
Bond Fund current income and capital growth.
- -------------------------------------------------------------------------------
Strong International Bond High total return by investing for both income
Fund and capital appreciation.
- -------------------------------------------------------------------------------
Strong Asset Allocation High total return consistent with reasonable
Fund risk over the long term.
- -------------------------------------------------------------------------------
Strong Equity Income Fund Total return by investing for both income and
capital growth.
- -------------------------------------------------------------------------------
Strong American Utilities Total return by investing for both income and
Fund capital growth.
- -------------------------------------------------------------------------------
Strong Blue Chip 100 Fund Total return by investing for both income and
capital growth.
- -------------------------------------------------------------------------------
Strong Limited Resources Total return by investing for both capital
Fund growth and income.
- -------------------------------------------------------------------------------
Strong Moderate Portfolio Total return by investing primarily for
capital growth and secondarily for income.
- -------------------------------------------------------------------------------
Strong Total Return Fund High total return by investing for capital
growth and income.
- -------------------------------------------------------------------------------
Strong Growth and Income High total return by investing for capital
Fund growth and income.
- -------------------------------------------------------------------------------
Strong Index 500 Fund To approximate as closely as practicable
(before fees and expenses) the capitalization-
weighted total rate of return of that
portion of the U.S. market for publicly traded
common stocks composed of the larger
capitalized companies.
- -------------------------------------------------------------------------------
Strong Schafer Balanced Total return by investing for both income and
Fund capital growth.
- -------------------------------------------------------------------------------
Strong Schafer Value Fund Long-term capital appreciation principally
through investment in common stocks and other
equity securities. Current income is a
secondary objective.
- -------------------------------------------------------------------------------
Strong Aggressive Portfolio Capital growth.
- -------------------------------------------------------------------------------
Strong Dow 30 Value Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Value Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Opportunity Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Mid Cap Disciplined Capital growth.
Fund
- -------------------------------------------------------------------------------
Strong Mid Cap Growth Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Common Stock Fund* Capital growth.
- -------------------------------------------------------------------------------
Strong Strategic Growth Capital growth.
Fund
- -------------------------------------------------------------------------------
Strong Small Cap Value Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Growth Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Discovery Fund Capital growth.
- -------------------------------------------------------------------------------
Strong U.S. Emerging Capital growth.
Growth Fund
- -------------------------------------------------------------------------------
Strong Technology Index Capital growth.
Plus Fund
- -------------------------------------------------------------------------------
Strong Enterprise Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Technology 100 Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Internet Fund Capital growth.
- -------------------------------------------------------------------------------
</TABLE>

55
<PAGE> 55
<TABLE>
<CAPTION>

FUND NAME INVESTMENT OBJECTIVE

<S> <C>
- -------------------------------------------------------------------------------
Strong Growth 20 Fund Capital growth.
- -------------------------------------------------------------------------------
Strong International Stock Capital growth.
Fund
- -------------------------------------------------------------------------------
Strong Overseas Fund Capital growth.
- -------------------------------------------------------------------------------
Strong Foreign Capital growth.
MajorMarkets(SM) Fund
- -------------------------------------------------------------------------------
Strong Asia Pacific Fund Capital growth.

</TABLE>

* The Fund is closed to new investors, except the Fund may continue to offer
its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

Strong also serves as investment advisor to several management
investment companies, some of which fund variable annuity separate accounts of
certain insurance companies.

The Fund may from time to time be compared to other Strong Funds
based on a risk/reward spectrum. In general, the amount of risk associated with
any investment product is commensurate with that product's potential level of
reward. The Strong Funds risk/reward continuum or any Fund's position on the
continuum may be described or diagrammed in marketing materials. The Strong
Funds risk/reward continuum positions the risk and reward potential of each
Strong Fund relative to the other Strong Funds, but is not intended to position
any Strong Fund relative to other mutual funds or investment products. Marketing
materials may also discuss the relationship between risk and reward as it
relates to an individual investor's portfolio.

TYING TIME FRAMES TO YOUR GOALS. There are many issues to consider
as you make your investment decisions, including analyzing your risk tolerance,
investing experience, and asset allocations. You should start to organize your
investments by learning to link your many financial goals to specific time
frames. Then you can begin to identify the appropriate types of investments to
help meet your goals. As a general rule of thumb, the longer your time horizon,
the more price fluctuation you will be able to tolerate in pursuit of higher
returns. For that reason, many people with longer-term goals select stocks or
long-term bonds, and many people with nearer-term goals match those up with for
instance, short-term bonds. Strong developed the following suggested holding
periods to help our investors set realistic expectations for both the risk and
reward potential of our funds. (See table below.) Of course, time is just one
element to consider when making your investment decision.

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<PAGE> 56

STRONG FUNDS SUGGESTED MINIMUM HOLDING PERIODS

UNDER 1 YEAR 1 TO 2 YEARS 4 TO 7 YEARS 5 OR MORE YEARS
------------ ------------ ------------ ---------------

<S> <C> <C> <C>
Money Market Fund Advantage Fund Government Asset Allocation
Heritage Money Municipal Advantage Securities Fund Fund
Fund Fund Municipal Bond Fund American
Municipal Money Corporate Bond Fund Utilities Fund
Market Fund 2 TO 4 YEARS International Bond Index 500 Fund
Investors Money ------------ Fund Total Return Fund
Fund Short-Term Bond Fund High-Yield Opportunity Fund
Short-Term Municipal Bond Fund Growth Fund
Municipal Bond Fund High-Yield Bond Fund Common Stock Fund*
Short-Term Global Global High-Yield Discovery Fund
Bond Fund Bond Fund International
Short-Term High Conservative Stock Fund
Yield Bond Fund Portfolio Asia Pacific Fund
Short-Term High Value Fund
Yield Municipal Fund Growth and Income
Fund
Equity Income Fund
Mid Cap Growth Fund
Schafer Value Fund
Growth 20 Fund
Blue Chip 100 Fund
Small Cap Value Fund
Dow 30 Value Fund
Schafer Balanced Fund
Limited Resources Fund
Overseas Fund
Foreign
MajorMarkets(SM) Fund
Strategic Growth Fund
Enterprise Fund
Mid Cap Disciplined Fund
U.S. Emerging
Growth Fund
Aggressive Portfolio
Moderate Portfolio
Technology 100 Fund
Technology Index
Plus Fund
Internet Fund

</TABLE>

* This Fund is closed to new investors, except the Fund may continue to offer
its shares through certain 401(k) plans and similar company-sponsored
retirement plans.

PRODUCT LIFE CYCLES. Discussions of product life cycles and their
potential impact on the Fund's investments may be used in advertisements and
sales materials. The basic idea is that most products go through a life cycle
that generally consists of an early adoption phase, a rapid growth phase, and a
maturity phase. The early adoption phase generally includes the time period
during which the product is first being developed and marketed. The rapid growth
phase usually occurs when the general public becomes aware of the new product
and sales are rising. The maturity phase generally includes the time period when
the public has been aware of the product for a period of time and sales have
leveled off or declined.

By identifying and investing in companies that produce or service
products that are in the early adoption phase of their life cycle, it may be
possible for the Fund to benefit if the product moves into a prolonged period of
rapid growth that enhances the company's stock price. However, you should keep
in mind that investing in a product in its early adoption phase does not provide
any guarantee of profit. A product may experience a prolonged rapid growth and
maturity phase without any corresponding increase

57
<PAGE> 57
in the company's stock price. In addition, different products have life cycles
that may be longer or shorter than those depicted and these variations may
influence whether the product has a positive effect on the company's stock
price. For example, a product may not positively impact a company's stock price
if it experiences an extremely short rapid growth or maturity phase because the
product becomes obsolete soon after it is introduced to the general public.
Other products may never move past the early adoption phase and have no impact
on the company's stock price.

ADDITIONAL FUND INFORMATION

PORTFOLIO CHARACTERISTICS. In order to present a more complete
picture of a Fund's portfolio, marketing materials may include various actual or
estimated portfolio characteristics, including but not limited to median market
capitalizations, earnings per share, alphas, betas price/earnings ratios,
returns on equity, dividend yields, capitalization ranges, growth rates,
price/book ratios, top holdings, sector breakdowns, asset allocations, quality
breakdowns and breakdowns by geographic region.

MEASURES OF VOLATILITY AND RELATIVE PERFORMANCE. Occasionally,
statistics may be used to specify Fund volatility or risk. The general premise
is that greater volatility connotes greater risk undertaken in achieving
performance. Measures of volatility or risk are generally used to compare the
Fund's net asset value or performance relative to a market Index. One measure of
volatility is beta. Beta is the volatility of a fund relative to the total
market as represented by the Standard & Poor's 500 Index. A beta of more than
1.00 indicates volatility greater than the market and a beta of less than 1.00
indicates volatility less than the market. Another measure of volatility or risk
is standard deviation. Standard deviation is a statistical tool that measures
the degree to which a fund's performance has varied from its average performance
during a particular time period.

Standard deviation is calculated using the following formula:

Standard deviation = the square root of [SIGMA] (xi - xa)2
--------------------------------
n-1

where: [SIGMA] = "the sum of",

x = each individual return during the time period,
i
x = the average return over the time period, and
a
n = the number of individual returns during the time
period.

Statistics may also be used to discuss the Fund's relative
performance. One such measure is alpha. Alpha measures the actual return of a
fund compared to the expected return of a fund given its risk (as measured by
beta). The expected return is based on how the market as a whole performed, and
how the particular fund has historically performed against the market.
Specifically, alpha is the actual return less the expected return. The expected
return is computed by multiplying the advance or decline in a market
representation by the fund's beta. A positive alpha quantifies the value that
the fund manager has added and a negative alpha quantifies the value that the
fund manager has lost.

Other measures of volatility and relative performance may be used as
appropriate.

58
<PAGE> 58
However, all such measures will fluctuate and do not represent future results.

GENERAL INFORMATION

BUSINESS PHILOSOPHY

Strong is an independent, Midwestern-based investment advisor, owned
by professionals active in its management. Recognizing that investors are the
focus of its business, Strong strives for excellence both in investment
management and in the service provided to investors. This commitment affects
many aspects of the business, including professional staffing, product
development, investment management, and service delivery.

The increasing complexity of the capital markets requires
specialized skills and processes for each asset class and style. Therefore,
Strong believes that active management should produce greater returns than a
passively managed index. Strong has brought together a group of top-flight
investment professionals with diverse product expertise, and each concentrates
on their investment specialty. Strong believes that people are the firm's most
important asset. For this reason, continuity of professionals is critical to the
firm's long-term success.

INVESTMENT ENVIRONMENT

Discussions of economic, social, and political conditions and their
impact on the Fund may be used in advertisements and sales materials. Such
factors that may impact the Fund include, but are not limited to, changes in
interest rates, political developments, the competitive environment, consumer
behavior, industry trends, technological advances, macroeconomic trends, and the
supply and demand of various financial instruments. In addition, marketing
materials may cite the portfolio management's views or interpretations of such
factors.

EIGHT BASIC PRINCIPLES FOR SUCCESSFUL MUTUAL FUND INVESTING

These common sense rules are followed by many successful investors.
They make sense for beginners, too. If you have a question on these principles,
or would like to discuss them, please contact Strong at 800-368-3863.

1. HAVE A PLAN - even a simple plan can help you take control of your
financial future. Review your plan once a year, or if your circumstances
change.

2. START INVESTING AS SOON AS POSSIBLE. Make time a valuable ally. Let it put
the power of compounding to work for you, while helping to reduce your
potential investment risk.

3. DIVERSIFY YOUR PORTFOLIO. By investing in different asset classes -
stocks, bonds, and cash - you help protect against poor performance in one
type of investment while building investments most likely to help you
achieve your important goals.

4. INVEST REGULARLY. Investing is a process, not a one-time event. By
investing regularly over the long term, you reduce the impact of
short-term market gyrations, and you attend to your long-term plan before
you are tempted to spend those assets on short-term needs.

5. MAINTAIN A LONG-TERM PERSPECTIVE. For most individuals, the best
discipline is staying invested as market conditions change. Reactive,
emotional investment decisions are all too often a source of regret - and
principal loss.

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<PAGE> 59
6. CONSIDER STOCKS TO HELP ACHIEVE MAJOR LONG TERM GOALS. Over time, stocks
have provided the more powerful returns needed to help the value of your
investments stay well ahead of inflation.

7. KEEP A COMFORTABLE AMOUNT OF CASH IN YOUR PORTFOLIO. To meet current
needs, including emergencies, use a money market fund or a bank account -
not your long-term investment assets.

8. KNOW WHAT YOU'RE BUYING. Make sure you understand the potential risks and
rewards associated with each of your investments. Ask questions... request
information. . . make up your own mind. And choose a fund company that
helps you make informed investment decisions.

STRONG RETIREMENT PLAN SERVICES

Strong Retirement Plan Services offers a full menu of high quality,
affordable retirement plan options, including traditional money purchase pension
and profit sharing plans, 401(k) plans, simplified employee pension plans,
salary reduction plans, Keoghs, and 403(b) plans. Strong's retirement plan
specialists are available to help companies determine which type of retirement
plan may be appropriate for their particular situation.

MARKETS: The retirement plan services offered by Strong focus on
four distinct markets, based on the belief that a retirement plan should fit the
customer's needs, not the other way around.

1. SMALL COMPANY PLANS. Small company plans are designed for companies with
1-50 plan participants. The objective is to incorporate the features and
benefits typically reserved for large companies, such as sophisticated
recordkeeping systems, outstanding service and investment expertise, into
a small company plan without administrative hassles or undue expense.
Small company plan sponsors receive a comprehensive plan administration
manual as well as toll-free telephone support.

2. LARGE COMPANY PLANS. Large company plans are designed for companies with
between 51 and 1,000 plan participants. Each large company plan is
assigned a team of professionals consisting of an account manager, who is
typically an attorney, CPA, or holds a graduate degree in business,
acquisition specialist (if applicable), an accounting manager, a
legal/technical manager and an education/communications educator.

3. WOMEN-OWNED BUSINESSES.

4. NON-PROFIT AND EDUCATIONAL ORGANIZATIONS (THE 403(B) MARKET).

TURNKEY APPROACH. The retirement plans offered by Strong are
designed to be streamlined and simple to administer. To this end, Strong has
invested heavily in the equipment, systems and people necessary to adopt or
convert a plan and to keep it running smoothly. Strong provides all aspects of
the plan, including plan design, administration, recordkeeping and investment
management. To streamline plan design, Strong provides customizable IRS-approved
prototype documents. Strong services also include annual government reporting
and testing as well as daily valuation of each participant's account. This
structure is intended to eliminate the confusion and complication often
associated with dealing with multiple vendors. It is also designed to save plan
sponsors time and expense.

The Fund strives to provide one-stop retirement savings programs
that combine the advantages of proven investment management, flexible plan
design and a wide range of investment options. The open architecture design of
the plans allow for the use of the Strong family of mutual funds as well as a
stable asset value option. Large company plans may supplement these options with
their company stock (if publicly traded) or funds from other well-known mutual
fund families.

60
<PAGE> 60
EDUCATION. Participant education and communication is key to the
success of any retirement program, and therefore is one of the most important
services that Strong provides. Strong's goal is twofold: to make sure that plan
participants fully understand their options and to educate them about the
lifelong investment process. To this end, Strong provides attractive, readable
print materials that are supplemented with audio and video tapes, and retirement
education programs.

SERVICE. Strong's goal is to provide a world class level of service.
One aspect of that service is an experienced, knowledgeable team that provides
ongoing support for plan sponsors, both at adoption or conversion and throughout
the life of a plan. Strong is committed to delivering accurate and timely
information, evidenced by straightforward, complete and understandable reports,
participant account statements and plan summaries.

Strong has designed both "high-tech" and "high-touch" systems,
providing an automated telephone system as well as personal contact.
Participants can access daily account information, conduct transactions or leave
questions answered in the way that is most comfortable for them.

STRONG FINANCIAL ADVISORS GROUP

The Strong Financial Advisors Group is dedicated to helping
financial advisors better serve their clients. Financial advisors receive
regular updates on the Fund, access to its portfolio manager through special
conference calls, consolidated mailings of duplicate confirmation statements,
access to Strong's network of regional representatives and other specialized
services. For more information on the Strong Financial Advisors Group, call
800-368-1683.

SHAREHOLDER REPORTS

An annual report will be issued to shareholders after the close of
each fiscal year, which ends September 30. This report will include financial
statements for the Fund audited by the Fund's independent accountants,
PricewaterhouseCoopers LLP. A semi-annual report will also be issued to the
Fund's shareholders.

CUSTODIAN

Firstar Bank Milwaukee, N.A., 615 East Michigan Street, Milwaukee,
Wisconsin, acts as custodian of the cash and securities of the Fund. The
custodian holds all cash and, directly or through a book entry system or an
agent, securities of the Fund, delivers and receives payment for securities sold
by the Fund, collects income from investments of the Fund and performs other
duties, all as directed by officers of the Fund. The custodian does not exercise
any supervisory function over the management of, or the purchase and sale of
securities by, the Fund.

TRANSFER AGENT

Strong acts as the Fund's dividend-paying agent, transfer agent and
shareholder servicing agent. Strong's address is 100 Heritage Reserve, Menomonee
Falls, Wisconsin 53051.

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP has been selected as the independent
accountants of the Fund. As such, they are responsible for auditing the
financial statements of the Fund. The financial statements of the Fund for its
fiscal year ended September 30, 1999 included in the 1999 Annual Report,
incorporated herein by reference, have been audited by PricewaterhouseCoopers
LLP. The financial statements referred to above are incorporated by reference
herein in reliance on the report of PricewaterhouseCoopers LLP given on the
authority of that firm as experts in accounting and auditing.

61
<PAGE> 61
FINANCIAL STATEMENTS

The Fund's financial statements appearing in its Annual Report to
Shareholders dated September 30, 1999, together with the report of
PricewaterhouseCoopers LLP thereon, are incorporated by reference in this
Statement of Additional Information.

ADDITIONAL INFORMATION

The Fund's Prospectus and this Statement of Additional Information
omit certain information contained in the Registration Statement which the Fund
has filed electronically with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, and reference is hereby made to
the Registration Statement for further information with respect to the Fund and
the securities offered hereby. This Registration Statement is available for
inspection by the public at the public reference facilities maintained by the
Commission in Washington, D.C.

62
<PAGE> 62
PART C

OTHER INFORMATION

Item 23. Exhibits. Financial Statements and Exhibits

<S> <C>
(a) (1) Articles of Incorporation****
(a) (2) Certificate of Correction of Articles of Incorporation****
(a) (3) Change of Resident Agent and Address and Principal office****
(a) (4) Articles of Amendment****

(a) (5) Articles Supplementary regarding increase in the number of
authorized shares*****

(b) (1) By-Laws of the Registrant, as amended as of February 1,
1996****

(b) (2) Amendment to By-Laws adopted on December 3, 1997******

(b) (3) Amendment to By-Laws adopted on August 12, 1998*******

(d) Investment Advisory Agreement between the Registrant and
Strong Schafer Capital Management, L.L.C.*******

(e) Distribution Agreement between the Registrant and Strong Funds
Distributors, Inc.****

(f) Not Applicable

(g) Custodian Agreement between the Registrant and First Wisconsin
Trust Company (now Firstar Trust Company)**; and the Schedule
of Remuneration***

(h) (1) Shareholder Servicing and Transfer Agent Agreement between the
Registrant and Strong Capital Management, Inc. ("Strong") and
Shareholder Servicing Fee Schedule****

(h) (2) Fund Accounting Servicing Agreement between the Registrant and
Strong and Fund Valuation and Accounting Annual Fee
Schedule****
(i) Not Applicable

(j) Consent of Independent Accountants
</TABLE>

C-1
<PAGE> 63
<TABLE>

<S> <C>

(k) Financial Statements.

Included in Part A of this Registration Statement:

Financial Highlights

Included in Part B of this Registration Statement:

Report of Independent Accountants*

Statement of Assets and Liabilities as of September 30, 1999*
Schedule of Investments as of September 30, 1999*
Statement of Operations for the Year Ended September 30, 1999*
Statement of Changes in Net Assets for the Years Ended
September 30, 1999 and 1998*

Statements, schedules and historical information other than
those listed above have been omitted since they are either not
applicable or are not required.

(l) Not Applicable
(m) Not Applicable
(n) Not Applicable
(o) Not Applicable
(p) Not Applicable (requirement to file Code of Ethics takes
effect for filings made on or after March 1, 2000)
</TABLE>

-----------------------------------

* Incorporated by reference from the Annual Report to
Shareholders for the year ended September 30, 1999.

** Previously filed in Post-Effective Amendment No. 5 on
January 31, 1990 and hereby incorporated by reference.

*** Previously filed in Post-Effective Amendment No. 10 on
February 1, 1995 and hereby incorporated by reference.

**** Previously filed in Post-Effective Amendment No. 11 on
February 1, 1996 and hereby incorporated by reference.

***** Previously filed in Post-Effective Amendment No. 13 on
February 1,

C-2
<PAGE> 64
1997 and hereby incorporated by reference.

****** Previously filed in Post-Effective Amendment No. 14 on
February 1, 1998 and hereby incorporated by reference.

******* Previously filed in Post-Effective Amendment No. 15 on
August 17, 1998 and hereby incorporated by reference.

******** Previously filed in Post-Effective Amendment No. 16 on
December 3, 1998 and hereby incorporated by reference.

Item 24. Persons Controlled by or under Common Control with
Registrant.

None.

Item 25. Indemnification.

Article XII of the Registrant's By-Laws provides for indemnification
of the Registrant's directors and officers under certain circumstances as
authorized by Section 2-478 of the General Corporation Law of the State of
Maryland. Such By-Laws are incorporated by reference herein.

The Registrant has obtained errors and omissions insurance which
(subject to certain limits and deductibles) insures the Registrant and its
officers and directors against loss arising from certain claims if made against
them for actions taken as such.

Item 26. Business and Other Connections of Investment Adviser.

Although Strong Schafer Capital Management, L.L.C. has not served as
investment adviser to any registered investment company or other accounts prior
to October 16, 1998, Schafer Capital Management, Inc., currently the sole
managing member of Strong Schafer Capital Management, L.L.C., has acted as
investment adviser to other equity accounts for many years and acts as
investment subadviser to Strong Schafer Balanced Fund, a series of Strong
Schafer Funds, Inc. Strong Capital Management, Inc., the non-managing member of
Strong Schafer Capital Management, L.L.C., also acts as investment adviser to
other equity accounts and to the registered investment companies comprising the
Strong Family of Funds. Each of Schafer Capital Management, Inc. and Strong
Capital Management, Inc. is a registered investment adviser under the Investment
Advisers Act of 1940, as amended.

David K. Schafer, a director and officer of Schafer Capital
Management, Inc., is also Chairman of the Board of Schafer Cullen Capital
Management, Inc., 645 Fifth Avenue, New York, New York 10022.

James P. Cullen, a director and officer of Schafer Capital
Management, Inc., is also President of Schafer Cullen Capital Management, Inc.

Brendan J. Spillane, a director and officer of Schafer Capital
Management, Inc., is also Secretary and Treasurer of Schafer Cullen Capital
Management, Inc.

Schafer Cullen Capital Management, Inc. is a registered investment
adviser under the

C-3
<PAGE> 65
Investment Advisers Act of 1940, as amended.

Richard S. Strong controls Strong Capital Management, Inc. and
Strong Investments, Inc.

The information relating to Strong Capital Management, Inc. and
Strong Investments, Inc. contained under "What is the fund's relationship with
Strong?" in the Prospectus and under "Investment Advisory and Other Services",
"Distributor" and "Brokerage" in the Statement of Additional Information is
hereby incorporated by reference.

Item 27. Principal Underwriters.

(a) Strong Investments, Inc., the distributor for the Registrant's securities,
currently acts as principal underwriter or distributor for the following
other entities: Strong Advantage Fund, Inc.; Strong Asia Pacific Fund,
Inc.; Strong Asset Allocation Fund, Inc.; Strong Common Stock Fund, Inc.;
Strong Conservative Equity Funds, Inc.; Strong Corporate Bond Fund, Inc.;
Strong Discovery Fund, Inc.; Strong Equity Funds, Inc.; Strong Government
Securities Fund, Inc.; Strong Heritage Reserve Series, Inc.; Strong
High-Yield Municipal Bond Fund, Inc.; Strong Income Funds, Inc.; Strong
Income Funds II, Inc.; Strong International Equity Funds, Inc.; Strong
International Income Funds, Inc.; Strong Life Stage Series, Inc., Strong
Money Market Fund, Inc.; Strong Municipal Bond Fund, Inc; Strong Municipal
Funds, Inc.; Strong Opportunity Fund, Inc.; Strong Opportunity Fund II,
Inc.; Strong Schafer Funds, Inc.; Strong Short-Term Bond Fund, Inc.;
Strong Short-Term Global Bond Fund, Inc.; Strong Short-Term Municipal Bond
Fund, Inc.; Strong Total Return Fund, Inc.; and Strong Variable Insurance
Funds, Inc.

(b) The officers of Strong Investments, Inc. and their positions are listed
below. The business address of each person is 100 Heritage Reserve,
Menomonee Falls, Wisconsin 53051.

Position and Offices Positions and Offices
Name with Underwriter with the Fund

<S> <C> <C>
Richard S. Strong Director and Chairman None
of the Board

Stephen J. Shenkenberg Vice President, Chief None
Compliance Officer and
Secretary

Bradley C. Tank President None

Dana J. Russart Vice President None

Lyle J. Fitterer Vice President None

Michael W. Stefano Vice President None

Thomas M. Zoeller Treasurer and Chief Financial None
Officer

Richard T. Weiss Director None

C-4
<PAGE> 66
Item 28. Location of Accounts and Records

Such records are located at:

1. Strong Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051

2. Firstar Bank Milwaukee, N.A.
Mutual Fund Services
P.O. Box 701
Milwaukee, Wisconsin 53201-0701

3. Sidley & Austin
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603

Item 29. Management Services.

There are no management-related service contracts not discussed in
Part A or Part B.

Item 30. Undertakings.

The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report to
shareholders, upon request and without charge.

Insofar as indemnification by the Registrant for liabilities arising
under the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted against the Registrant by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

C-5
<PAGE> 67
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York and State of New York on the 31st day
of January, 2000.

STRONG SCHAFER VALUE FUND, INC.

By: /s/ David K. Schafer
----------------------
David K. Schafer,
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on January 31, 2000 by the
following persons in the capacities indicated.

Name Title
------- -------
Director and President
/s/ David K. Schafer
- -------------------------------
David K. Schafer

Secretary and Treasurer and
/s/ Brendan J. Spillane Principal Financial and
- ------------------------------- Accounting Officer
Brendan J. Spillane

* Director
- -------------------------------
Timothy C. Collins

* Director
- -------------------------------
Mary P. English

* Director
- -------------------------------
Philip P. Young

*By: /s/ David K. Schafer
--------------------------
David K. Schafer
(Attorney-in-fact)

C-6
<PAGE> 68
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

EXHIBITS
FILED WITH
FORM N-1A

REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
AND
REGISTRATION STATEMENT
UNDER THE
INVESTMENT COMPANY ACT OF 1940

STRONG SCHAFER VALUE FUND, INC.
(Exact name of Registrant as specified in Charter)

<PAGE> 69
Exhibit Description of Exhibit
- --------- ---------------------------

(j) Consent of PricewaterhouseCoopers LLP

<PAGE> 1
EXHIBIT (j)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this
Registration Statement Inc. on Form N-1A of our report dated November 5, 1999,
relating to the financial statements and financial highlights which appears in
the September 30, 1999 Annual Report to Shareholders of Strong Schafer Value
Fund, Inc. which is also incorporated by reference to the Registration
Statement. We also consent to the references to us under the headings
"Financial Highlights" and "Independent Accountants" in such Registration
Statement.

PRICEWATERHOUSECOOPERS LLP
Milwaukee, Wisconsin
January 28, 2000