013096-1 Registration No. 33-1182
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 No. 11 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 12 [X]
(Check appropriate box or boxes.)
BRANDYWINE FUND, INC.
(Exact name of Registrant as Specified in Charter)
3908 Kennett Pike
Greenville, Delaware 19807
(Address of Principal Executive Offices) (Zip Code)
(302) 656-3017
(Registrant's Telephone Number, including Area Code)
Copy to:
Foster S. Friess W. David Knox, II
350 Broadway Foley & Lardner
P. O. Box 576 777 East Wisconsin Avenue
Jackson, Wyoming 83001 Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)
Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933 pursuant to Rule 24f-2 of the Investment
Company Act of 1940, and filed its required Rule 24f-2 Notice for the
Registrant's fiscal year ended September 30, 1995 on November 14, 1995.
Approximate Date of Proposed Public Offering: As soon as practicable
after the Registration Statement becomes effective.
It is proposed that this filing become effective (check appropriate box):
[X] immediately upon filing pursuant to paragraph (b)
[_] on (date) pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] on (date) pursuant to paragraph (a)(2), of Rule 485
If appropriate, check the following box:
[_] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
The Exhibit Index is located at page __ of the sequential numbering
system.
Page 1 of __ Pages
<PAGE>
BRANDYWINE FUND, INC.
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the Prospectus and
the Statement of Additional Information of the responses to the Items of
Parts A and B of Form N-1A.)
Caption or Subheading in Prospectus
Item No. on Form N-1A or Statement of Additional Information
PART A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Expense Information
3. Condensed Financial Financial Highlights; Performance
Information Information
4. General Description Introduction; Investment Objective
of Registrant and Policies
5. Management of the Management of the Fund; Capital
Fund Structure
5A. Management's Discussion Performance Information; Management's
of Fund Performance Discussion of Fund Performance
6. Capital Stock and Dividends, Distributions and Taxes;
Other Securities Capital Structure; Stockholder Reports
7. Purchase of Securities Determination of Net Asset Value;
Being Offered Purchase of Shares; Dividend
Reinvestment
8. Redemption or Repurchase Redemption of Shares
9. Legal Proceedings *
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and *
History
13. Investment Objectives Investment Restrictions
and Policies
14. Management of the Directors and Officers of the Fund
Registrant
15. Control Persons and Principal Stockholders
Principal Holders
of Securities
16. Investment Advisory Included in Prospectus under "Management
and Other Services of the Fund"; Investment Adviser; Service
Agreement; Custodian; Independent
Accountants
17. Brokerage Allocation Allocation of Portfolio Brokerage
18. Capital Stock and Included in Prospectus under
Other Securities "Capital Structure"
19. Purchase, Redemption Included in Prospectus under
and Pricing of "Determination of Net Asset Value";
Securities Being "Dividend Reinvestment";
Offered Determination of Net Asset Value and
Performance; Systematic Withdrawal Plan
20. Tax Status Taxes
21. Underwriters *
22. Calculations of Per- Determination of Net Asset Value and
formance Data Performance
23. Financial Statements Financial Statements
_______________________
*Answer negative or inapplicable
P R O S P E C T U S
BRANDYWINE FUND, INC.
A NO-LOAD MUTUAL FUND
SEEKING LONG-TERM
CAPITAL APPRECIATION
BOARD OF DIRECTORS
JOHN E. BURRIS
Chairman, Burris Foods, Inc.
Milford, Delaware
FOSTER S. FRIESS
President, Friess Associates, Inc.
Jackson, Wyoming
STIG RAMEL
President, Nobel Foundation
1972 to 1992
Chairman, ''Fond '92-'94''
Solna, Sweden
INVESTMENT ADVISER
FRIESS ASSOCIATES, INC.
350 Broadway
P.O. Box 576
Jackson, Wyoming 83001
MANAGED BY
FRIESS ASSOCIATES, INC.
350 Broadway
P.O. Box 576
Jackson, Wyoming 83001
P R O S P E C T U S JANUARY 31, 1996
BRANDYWINE FUND, INC.
Brandywine Fund, Inc. (the ''Fund'') is an open-end, diversified management
investment company - a mutual fund. Its primary investment objective is to
produce long-term capital appreciation principally through investing in common
stocks. Current income is a secondary consideration.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus sets forth concisely the information about the Fund that
prospective investors should know before investing. Investors are advised to
read this Prospectus and retain it for future reference. This Prospectus does
not set forth all of the information included in the Registration Statement and
Exhibits thereto which the Fund has filed with the Securities and Exchange
Commission. A Statement of Additional Information, dated January 31, 1996, which
is a part of such Registration Statement is incorporated by reference in this
Prospectus. Copies of the Statement of Additional Information will be provided
promptly without charge to each person to whom a Prospectus is delivered upon
written or telephone request. Written requests should be made by writing to
Brandywine Fund, Inc., P.O. Box 4166, Greenville, Delaware 19807, Attn:
Corporate Secretary, Internet: [email protected], and telephone requests should
be made by calling (800) 656-3017.
BRANDYWINE FUND, INC.
3908 Kennett Pike
Greenville, Delaware 19807
Internet: [email protected]
(800) 656-3017
TABLE OF CONTENTS
Page No.
Expense Information ............................... 1
Financial Highlights .............................. 2
Introduction ...................................... 2
Investment Objective and Policies ................. 3
Management of the Fund ............................ 4
Determination of Net Asset Value .................. 5
Purchase of Shares ................................ 5
Redemption of Shares .............................. 7
Exchange Privilege................................. 8
Dividend Reinvestment ............................. 9
Dividends, Distributions and Taxes ................ 9
Capital Structure ................................. 10
Stockholder Reports ............................... 10
Performance Information ........................... 11
Management's Discussion of Fund Performance ....... 12
Share Purchase Application ........................ 13
EXPENSE INFORMATION
STOCKHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases or Reinvested Dividends .. None
Deferred Sales Load .............................................. None
Redemption Fee ...................................................None*<F1>
Exchange Fee ..................................................... None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management Fees .................................................. 1.00%
12b-1 Fees ....................................................... None
Other Expenses ................................................... 0.07%
------
Total Fund Operating Expenses .................................... 1.07%
------
------
*<F1>A fee of $7.50 is charged for each wire redemption.
Example: 1 Year 3 Years 5 Years 10 Years
-------------------------------
An investor would pay the following expenses on a $1,000
investment, assuming (l) 5% annual return and (2) redemption
at the end of each time period: $11 $34 $59 $130
The purpose of the preceding table is to assist investors in understanding
the various costs that an investor in the Fund will bear, directly or
indirectly. They should not be considered to be a representation of past or
future expenses. Actual expenses may be greater or lesser than those shown. The
Annual Fund Operating Expenses are based on actual expenses incurred for the
year ended September 30, 1995. The example assumes a 5% annual rate of return
pursuant to requirements of the Securities and Exchange Commission. This
hypothetical rate of return is not intended to be representative of past or
future performance of the Fund.
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
The following information has been audited by Price Waterhouse LLP,
independent accountants, whose unqualified report thereon is incorporated by
reference into the Statement of Additional Information. The Financial Highlights
should be read in conjunction with the financial statements and notes thereto
also incorporated by reference in the Statement of Additional Information.
<TABLE>
YEARS ENDED SEPTEMBER 30,
----------------------------------------------------------------
<CAPTION>
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986+<F2>
----- ----- ----- ----- ----- ----- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning
of period $24.77 $28.04 $19.36 $20.52 $15.79 $17.87 $12.89 $17.00 $11.01 $10.00
Income from investment operations:
Net investment income (loss) (0.10) 0.03 (0.02) 0.04 0.27 0.11 0.03 0.06 (0.02) 0.03
Net realized and unrealized
(losses) gains on investments**<F4>10.70 (0.43) 9.25 1.04 5.74 (1.48) 4.99 (3.29) 6.04 0.98
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations 10.60 (0.40) 9.23 1.08 6.01 (1.37) 5.02 (3.23) 6.02 1.01
Less Distributions:
Dividends from net
investment income - - (0.01) (0.13) (0.28) (0.03) (0.04) - (0.03) -
Distributions from net
realized gains (1.45) (2.87) (0.54) (2.11) (1.00) (0.68) - (0.88) - -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total from distributions (1.45) (2.87) (0.55) (2.24) (1.28) (0.71) (0.04) (0.88) (0.03) -
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $33.92 $24.77 $28.04 $19.36 $20.52 $15.79 $17.87 $12.89 $17.00 $11.01
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Investment Return 45.5% (1.4%) 48.6% 5.9% 41.4% (7.9%) 39.0%(17.6%) 54.8% 13.7%*<F3>
Ratios/Supplemental Data:
Net assets, end of period
(in 000's $) 4,137,484 2,240,554 1,413,253 695,128 527,808 271,856 169,745 122,863 127,777 57,984
Ratio of expenses to
average net assets 1.07% 1.09% 1.08% 1.10% 1.09% 1.12% 1.13% 1.16% 1.18% 1.39%*<F3>
Ratio of net investment
income (loss) to average
net assets (0.4%) 0.1% (0.1%) 0.2% 1.5% 0.9% 0.2% 0.3% (0.2%) 0.7%*<F3>
Portfolio turnover rate 193.7% 190.2% 150.4% 188.9% 187.9% 157.7% 91.0% 107.4% 146.8% 58.4%*<F3>
+<F2>For the period from December 12, 1985 (commencement of operations) to
September 30, 1986.
*<F3>Annualized.
**<F4>On a per share basis, this amount may not agree with the net realized and
unrealized gains (losses) experienced on the portfolio securities for the
period because of the timing of sales and repurchases of the Fund's shares in
relation to fluctuating market values of the Portfolio.
</TABLE>
INTRODUCTION
The Fund was incorporated under the laws of Maryland on October 9, 1985. The
Fund is an open-end, diversified management investment company registered under
the Investment Company Act of 1940. As an open-end investment company it obtains
its assets by continuously selling shares of its Common Stock, $.01 par value
(`Common Stock''), to the public. Proceeds from such sales are invested by the
Fund in securities of other companies. The resources of many investors are thus
combined and each individual investor has an interest in every one of the
securities owned, thereby providing diversification in a variety of industries.
The Fund's investment adviser furnishes experienced management to select and
watch over the Fund's investments. As an open-end investment company, the Fund
will redeem any of its outstanding shares on demand of the owner at the next
determined net asset value.
INVESTMENT OBJECTIVE AND POLICIES
The primary investment objective of the Fund is to produce long-term capital
appreciation principally through investing in common stocks. Current income is a
secondary consideration. The Fund's investment adviser anticipates that most of
the time the major portion of the Fund's portfolio will be invested in common
stocks. The Fund's investment adviser will purchase common stocks of well-
financed issuers which have proven records of profitability and strong earnings
momentum. Such companies are likely to be lesser known companies moving from a
lower to a higher market share position within their industry groups rather than
the largest and best known companies in such groups. The Fund's investment
adviser may, however, purchase common stocks of well known, highly researched,
large companies if it believes such common stocks offer particular opportunity
for long-term capital growth. Not more than 5% of the Fund's net assets may be
invested in securities of unseasoned companies, defined as companies having a
record of less than three years of continuous operation, including the operation
of any predecessor business of a company which came into existence as a result
of a merger, consolidation, reorganization or purchase of substantially all of
the assets of such predecessor business. The investment risks associated with
these securities may be considerably greater than those associated with common
stocks of more established companies.
In selecting investments the Fund's investment adviser will consider various
financial characteristics of the issuer, including historical sales and net
income, debt/equity and price/earnings ratios and book value. The Fund's
investment adviser may also review research reports of broker-dealers and trade
publications and, in appropriate situations, may meet with management. Greater
weight will be given to internal factors, such as product or service
development, than to external factors, such as interest rate changes, commodity
price fluctuations, general stock market trends and foreign currency exchange
values. Since the Fund's primary investment objective is to produce long-term
capital appreciation, and current income is a secondary consideration in the
selection of investments, a particular issuer's dividend history is not a
primary consideration.
Investors should be aware that since the major portion of the Fund's
portfolio will normally be invested in common stocks, the Fund's net asset value
may be subject to greater fluctuation than a portfolio containing a substantial
amount of fixed income securities. There can be no assurance that the primary
objective of the Fund will be realized or that any income will be earned. Nor
can there be any assurance that the Fund's portfolio will not decline in value.
Except for temporary defensive purposes, the Fund intends to have at all
times at least 70% of its investments in securities which the Fund's investment
adviser believes offer opportunity for growth of capital. No minimum or maximum
percentage of the Fund's assets is required to be invested in common stocks or
any other type of security. When the Fund's investment adviser believes that
securities other than common stocks offer opportunity for long-term capital
appreciation, the Fund may invest in publicly distributed debt securities,
preferred stocks, particularly those which are convertible into or carry rights
to acquire common stocks, and warrants. Investments in publicly distributed debt
securities and nonconvertible preferred stocks offer an opportunity for growth
of capital during periods of declining interest rates, when the market value of
such securities in general increases.
Except for temporary defensive purposes, cash and money market instruments
will be retained by the Fund only in amounts deemed adequate for current needs
and to permit the Fund to take advantage of investment opportunities. The money
market instruments in which the Fund may invest include conservative fixed-
income securities, such as United States Treasury Bills, certificates of deposit
of U.S. banks (provided that the bank has capital, surplus and undivided
profits, as of the date of its most recently published annual financial
statements, with a value in excess of $100,000,000 at the date of investment),
commercial paper rated A-l or better by Standard & Poor's Corporation,
commercial paper master notes and repurchase agreements. Commercial paper master
notes are unsecured promissory notes issued by corporations to finance short-
term credit needs. They permit a series of short-term borrowings under a single
note. Borrowings under commercial paper master notes are payable in whole or in
part at any time, may be prepaid in whole or in part at any time, and bear
interest at rates which are fixed to known lending rates and automatically
adjusted when such known lending rates change. There is no secondary market for
commercial paper master notes. The Fund's investment adviser will monitor the
creditworthiness of the issuer of the commercial paper master notes while any
borrowings are outstanding. Repurchase agreements are agreements under which the
seller of a security agrees at the time of sale to repurchase the security at an
agreed time and price. The Fund will not enter into repurchase agreements with
entities other than banks or invest over 5% of its assets in repurchase
agreements with maturities of more than seven days.
The Fund does not intend to place emphasis on short-term trading profits. The
Fund's investment adviser expects that the Fund's annual portfolio turnover rate
generally will not exceed 200%. See ''Management's Discussion of Fund
Performance.''The annual portfolio turnover rate indicates changes in the
Fund's portfolio and is calculated by dividing the lesser of purchases or sales
of portfolio securities (excluding securities having maturities at acquisition
of one year or less), for the fiscal year, by the monthly average of the value
of the portfolio securities (excluding securities having maturities at
acquisition of one year or less) owned by the Fund during the fiscal year. The
annual portfolio turnover rate may vary widely from year to year depending upon
market conditions and prospects. High turnover in any year will result in the
payment by the Fund from capital of above average amounts of brokerage
commissions and other transaction costs.
The Fund will limit to 15% of its assets investments in securities of foreign
issuers or in American Depository Receipts of such issuers. Such investments may
involve risks which are in addition to the usual risks inherent in domestic
investments. In many countries, there is less publicly available information
about issuers than is available in the reports and ratings published about
companies in the United States. Additionally, foreign companies may not be
subject to uniform accounting, auditing and financial reporting standards.
Dividends and interest on foreign securities may be subject to foreign
withholding taxes, which would reduce the Fund's income without providing a tax
credit for the Fund's stockholders. Although the Fund intends to invest in
securities of foreign issuers domiciled in nations which the Fund's investment
adviser considers as having stable and friendly governments, there is the
possibility of expropriation, confiscatory taxation, currency blockage or
political or social instability which could affect investments in those nations.
Under certain circumstances the Fund may (a) invest in warrants, (b)
temporarily borrow money from banks for emergency or extraordinary borrowings,
(c) pledge its assets to secure borrowings, and (d) purchase securities of other
investment companies. A more complete discussion of the circumstances in which
the Fund may engage in these activities is included in the Fund's Statement of
Additional Information. Except for the investment policies listed in this
paragraph, the investment objective and the other policies described under this
caption are not fundamental policies and may be changed without stockholder
approval. Such changes may result in the Fund having investment objectives
different from the objectives which the stockholder considered appropriate at
the time of investment in the Fund. Stockholders will receive at least 30 days'
prior written notice of any changes in the policies of the Fund which are not
fundamental.
MANAGEMENT OF THE FUND
As a Maryland corporation, the business and affairs of the Fund are managed
under the direction of its Board of Directors. Under an investment advisory
agreement (the ''Agreement'') with the Fund, Friess Associates, Inc. (the
''Adviser''), 350 Broadway, P.O. Box 576, Jackson, Wyoming 83001, furnishes
continuous investment advisory services and management to the Fund. In addition
to the Fund, the Adviser is the investment adviser to Brandywine Blue Fund,
Inc., another mutual fund, and to individual and institutional clients with
substantial investment portfolios. The Adviser was organized in 1974 and is
wholly owned by Foster S. Friess and Lynnette E. Friess, who are directors and
the sole officers of the Adviser.
The Adviser supervises and manages the investment portfolio of the Fund and,
subject to such policies as the Board of Directors of the Fund may determine,
directs the purchase or sale of investment securities in the day to day
management of the Fund. All investment decisions for the Fund are made by
investment teams comprising three or more analysts, and no single person is
primarily responsible for making investment recommendations to such teams. Under
the Agreement, the Adviser, at its own expense and without reimbursement from
the Fund, will furnish office space, and all necessary office facilities,
equipment, and executive personnel for making the investment decisions necessary
for managing the Fund and maintaining its organization, and will pay the
salaries and fees of all officers and directors of the Fund (except the fees
paid to disinterested directors). For the foregoing, the Adviser will receive a
monthly fee of 1/12 of 1% (1% per annum) on the daily net assets of the Fund.
The rate of the advisory fee is higher than that paid by most mutual funds. The
advisory fees paid in the fiscal year ended September 30, 1995 were equal to
1.0% of the Fund's average net assets.
The Fund and Fiduciary Management, Inc., Milwaukee, Wisconsin have entered
into a Service Agreement pursuant to which certain accounting and record keeping
services will be performed for the Fund by Fiduciary Management, Inc. These
services include (a) preparing and maintaining financial statements, books of
accounts and related documents, (b) determining the Fund's net asset value, (c)
preparing excise tax returns and (d) preparing reports and filings with the
Securities and Exchange Commission. For such services, the Fund currently pays
Fiduciary Management, Inc. an annual fee of $310,000.
DETERMINATION OF NET ASSET VALUE
The per share net asset value of the Fund is determined by dividing the total
value of its net assets (meaning its assets less its liabilities excluding
capital and surplus) by the total number of its shares outstanding at that time.
The net asset value is determined as of the close of regular trading (currently
4:00 p.m. Eastern time) on the New York Stock Exchange on each day the New York
Stock Exchange is open for trading. This determination is applicable to all
transactions in shares of the Fund prior to that time and after the previous
time as of which net asset value was determined. Accordingly, purchase orders
accepted or shares tendered for redemption prior to the close of regular trading
on a day the New York Stock Exchange is open for trading will be valued as of
the close of trading, and purchase orders accepted or shares tendered for
redemption after that time will be valued as of the close of the next trading
day.
Securities traded on any national stock exchange or quoted on the Nasdaq
National Market System will be valued on the basis of the last sale price on the
date of valuation or, in the absence of any sale on that date, the most recent
bid price. Other securities will be valued at the most recent bid price, if
market quotations are readily available. Any securities for which there are no
readily available market quotations and other assets will be valued at their
fair value as determined in good faith by the Board of Directors. Odd lot
differentials and brokerage commissions will be excluded in calculating values.
PURCHASE OF SHARES
Shares of Common Stock may be purchased directly from the Fund. A share
purchase application form is included at the back of this Prospectus. The price
per share is the next determined per share net asset value after receipt of an
application by Firstar Trust Company. Additional purchase applications may be
obtained from the Fund. Purchase applications should be mailed directly to:
Brandywine Fund, Inc., c/o Firstar Trust Company, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701. To purchase shares by overnight or express mail, please
use the following street address: Brandywine Fund, Inc., c/o Firstar Trust
Company, Mutual Fund Services, 615 East Michigan Street, Milwaukee, Wisconsin
53202. All applications must be accompanied by payment in the form of a check
drawn on a U.S. bank payable to Brandywine Fund, Inc., or by direct wire
transfer. No cash will be accepted. Firstar Trust Company will charge a $15 fee
against a stockholder's account for any payment check returned to the custodian.
THE STOCKHOLDER WILL ALSO BE RESPONSIBLE FOR ANY LOSSES SUFFERED BY THE FUND AS
A RESULT.
Funds can be wired to: Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
(WIRED FUNDS MUST BE Milwaukee, Wisconsin 53202
RECEIVED PRIOR TO ABA #075000022
4:00 P.M. EASTERN credit: Firstar Trust Company
TIME TO BE ELIGIBLE Account #112952137
FOR SAME DAY PRICING.) further credit: Brandywine Fund, Inc.
''name of stockholder and account number (if known)''
The establishment of a new account or any additional purchases for an
existing account by wire transfer should be preceded by a phone call to Firstar
Trust Company, (800) 656-3017 or (414) 765-4124, to provide information for the
account. A properly signed share purchase application marked ''Follow up'' must
be sent for all new accounts opened by wire transfer. Applications are subject
to acceptance by the Fund and are not binding until so accepted. The Fund does
not accept telephone orders for purchase of shares and reserves the right to
reject applications in whole or part. Shares of the Fund may also be purchased
through a registered broker-dealer who may charge the investor a fee either at
the time of purchase or redemption. The fee, if charged, is retained by the
broker-dealer and not remitted to the Fund or Adviser.
THE BOARD OF DIRECTORS OF THE FUND HAS ESTABLISHED $25,000 AS THE MINIMUM
INITIAL PURCHASE AND $1,000 AS THE MINIMUM FOR ANY SUBSEQUENT PURCHASE (except
through dividend reinvestment), which minimum amounts are subject to change at
any time. Stockholders will receive written notification at least 30 days in
advance of any changes in such minimum amounts. Shares of the Fund may be
purchased without regard to the foregoing minimum initial investment by
employees, officers and directors of the Fund or the Adviser or firms providing
contractual services to the Fund, and by members of their ''immediate families''
(i.e., spouses, siblings, parents, children, grandchildren and grandparents) and
by retirement plans and trusts for their benefit. The officers of the Fund in
their discretion may waive the minimum initial investment for charitable
organizations, employee benefit plans whose investment in the aggregate exceed
the Fund's minimum initial investment, and others with whom the Fund or Adviser
has an established business relationship. Stock certificates for shares
purchased are not issued unless requested in writing, and directed to Brandywine
Fund, Inc., c/o Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-
0701.
Employee benefit, profit-sharing, or retirement plans (such as 401(k) plans)
may purchase shares of Common Stock through financial institutions or other
service providers (''Processing Intermediaries''), which may become stockholders
of record of the shares and which may use procedures and impose restrictions in
addition to or different from those applicable to stockholders who invest
directly in the Fund. Processing Intermediaries may charge fees or assess other
charges for the services they provide to their customers. Any such fee or charge
is retained by the Processing Intermediary and is not remitted to the Fund or
its Adviser. Program materials provided by the Processing Intermediary should be
read in conjunction with this Prospectus before investing in this manner. Shares
of Common Stock may be purchased through Processing Intermediaries without
regard to the Fund's minimum purchase amounts.
REDEMPTION OF SHARES
A stockholder may require the Fund to redeem his shares in whole or in part
at any time during normal business hours. Redemption requests must be made in
writing and directed to: Brandywine Fund, Inc., c/o Firstar Trust Company, 615
East Michigan Street, Milwaukee, Wisconsin 53202. If a redemption request is
inadvertently sent to the Fund, it will be forwarded to Firstar Trust Company,
but the effective date of redemption will be delayed until the request is
received by Firstar Trust Company. Requests for redemption by telegram and
requests which are subject to any special conditions or which specify an
effective date other than as provided herein cannot be honored.
A request for redemption must be signed by the stockholder or stockholders
exactly as the shares are registered, including the signature of each joint
owner, and must specify either the number of shares or the dollar amount of
shares that are to be redeemed. If the proceeds of redemption are requested to
be sent to an address or a person other than as the shares to be redeemed are
registered, each signature on the redemption request must be guaranteed by a
commercial bank or trust company in the United States, a member firm of the New
York Stock Exchange or other eligible guarantor institution. If certificates
have been issued for any of the shares to be redeemed, the certificates,
properly endorsed or accompanied by a properly executed stock power, must
accompany the request for redemption. Additional documentation may be required
for redemptions by corporations, executors, administrators, trustees, guardians,
or others who hold shares in a fiduciary or representative capacity or who are
not natural persons. In case of any questions concerning the nature of such
documentation, the Fund's transfer agent, Firstar Trust Company, should be
contacted in advance at (800) 656-3017 or (414) 765-4124. Redemptions will not
be effective or complete until all of the foregoing conditions, including
receipt of all required documentation by Firstar Trust Company in its capacity
as transfer agent, have been satisfied.
The redemption price is the net asset value next determined after receipt by
Firstar Trust Company, in its capacity as transfer agent, of the written request
in proper form with all required documentation. The amount received may be more
or less than the cost of the shares redeemed. A check in payment for shares
redeemed will be mailed to the holder no later than the seventh day after
receipt of the redemption request in proper form with all required
documentation, except that when a purchase has been made by check, the Fund can
hold payment on redemption until it is reasonably satisfied the check has
cleared. (This may normally take up to 3 days for local personal or corporate
checks and up to 7 days for other personal or corporate checks.) Wire transfers
may be arranged on request. The transfer agent currently charges a $7.50 fee for
each payment made by wire of redemption proceeds, which will be deducted from
the stockholder's account.
If a stockholder instructs Firstar Trust Company in writing, redemption
requests may be made by telephone by calling ONLY FIRSTAR TRUST COMPANY, NOT THE
FUND OR ITS ADVISER, at (800) 656-3017 or (414) 765-4124, provided the
redemption proceeds are to be mailed or wired to the stockholder's address or
bank of record as shown on the records of the transfer agent. Proceeds redeemed
by telephone will be mailed or wired to an address or account other than that
shown on the records of the transfer agent only if such has been prearranged by
a written request sent via mail or facsimile copy to Firstar Trust Company. Such
a request must be signed by the stockholder with signatures guaranteed as
described above. Additional documentation may be requested from those who hold
shares in a fiduciary or representative capacity or who are not natural persons.
A stockholder may change his address by calling Firstar Trust Company at (800)
656-3017 or (414) 765-4124. Any written redemption requests received within 30
days after an address change made by telephone must be accompanied by a
signature guarantee and no telephone redemptions will be allowed within 30 days
of such a change. The Fund reserves the right to refuse a telephone redemption
request if it is believed advisable to do so. Redemption by telephone is not
available for IRA accounts or if share certificates have been issued for the
account. PROCEDURES FOR TELEPHONE REDEMPTIONS MAY BE MODIFIED OR TERMINATED AT
ANY TIME BY THE FUND OR FIRSTAR TRUST COMPANY. Neither the Fund nor Firstar
Trust Company will be liable for following instructions for telephone redemption
transactions that they reasonably believe to be genuine, provided reasonable
procedures are used to confirm the genuineness of the telephone instructions,
but may be liable for unauthorized transactions if they fail to follow such
procedures. These procedures include requiring some form of personal
identification prior to acting upon the telephone instructions and recording all
telephone calls. During periods of substantial economic or market change,
telephone redemptions may be difficult to implement. In the event a stockholder
cannot contact Firstar Trust Company by telephone, he or she should make a
redemption request in writing in the manner set forth above.
The Fund reserves the right to redeem the shares held in any account if at
the time of any exchange or redemption of shares in the account, the value of
the remaining shares in the account falls below $5,000. The stockholder will be
notified that the value of his account is less than the minimum and allowed at
least 60 days to make an additional investment. The receipt of proceeds of the
redemption of shares held in an IRA will constitute a taxable distribution of
benefits from the IRA unless a qualifying rollover contribution is made.
The right to redeem shares of the Fund will be suspended for any period
during which the New York Stock Exchange is closed because of financial
conditions or any other extraordinary reason and may be suspended for any period
during which (a) trading on the New York Stock Exchange is restricted pursuant
to rules and regulations of the Securities and Exchange Commission, (b) the
Securities and Exchange Commission has by order permitted such suspension, or
(c) an emergency, as defined by rules and regulations of the Securities and
Exchange Commission, exists as a result of which it is not reasonably
practicable for the Fund to dispose of its securities or fairly to determine the
value of its net assets.
To accommodate the current cash needs of investors the Fund offers a
Systematic Withdrawal Plan pursuant to which a stockholder who owns Fund shares
worth at least $25,000 at current net asset value may provide that a fixed sum
will be distributed to him at regular intervals. In electing to participate in
the Systematic Withdrawal Plan investors should realize that within any given
period the appreciation of their investment in the Fund may not be as great as
the amount withdrawn. A stockholder may vary the amount or frequency of
withdrawal payments or temporarily discontinue them by notifying Firstar Trust
Company in writing or by telephone at (800) 656-3017 or (414) 765-4124. A more
complete discussion of the Systematic Withdrawal Plan is included in the Fund's
Statement of Additional Information.
EXCHANGE PRIVILEGE
A request to exchange shares of Common Stock for shares of Brandywine Blue
Fund, another mutual fund managed by the Adviser, may be made by submitting the
request in writing to Brandywine Fund, Inc., c/o Firstar Trust Company, 615 East
Michigan Street, Milwaukee, Wisconsin 53202, along with a completed share
purchase application for Brandywine Blue Fund. Prior to exercising the Exchange
Privilege, a stockholder should obtain and carefully read the prospectus for
Brandywine Blue Fund. The stockholder must give the account name, account number
and the amount or number of shares of Common Stock to be exchanged. The
registration of the account from which the exchange is being made and the
account to which the exchange is being made must be identical. Signatures
required are the same as explained under ''REDEMPTION OF SHARES.''
In establishing a new account in Brandywine Blue Fund through this privilege,
the shares exchanged must have a value at least equal to the minimum investment
(currently $100,000) required by such fund.
The exchange privilege is available only in states where the exchange may be
legally made. Exchange requests may be subject to other limitations, including
those relating to frequency, that may be established from time to time to ensure
that the exchanges do not disadvantage the Fund, Brandywine Blue Fund or their
respective stockholders. Stockholders will be notified at least 60 days in
advance of any changes in such limitations and may obtain the terms of any such
limitations by writing to Brandywine Fund, Inc., c/o Firstar Trust Company, P.O.
Box 701, Milwaukee, Wisconsin 53201-0701. No exchange fee is currently imposed
by the Fund on exchanges; however, the Fund reserves the right to impose a
service charge in the future.
An exchange involves a redemption of all or a portion of a stockholder's
shares of Common Stock and the investment of the redemption proceeds in shares
of Brandywine Blue Fund and is subject to any applicable adjustments in
connection with such redemption and investment. The redemption will be made at
the per share net asset value of the shares to be redeemed next determined after
the exchange request is received as described above. The shares to be acquired
will be purchased (subject to any applicable adjustment) at the per share net
asset value of those shares next determined coincident with or after the time of
redemption.
For federal income tax purposes, an exchange of shares is a taxable event in
which a capital gain or loss may be realized by an investor. Before making an
exchange request, an investor should consult a tax or other financial adviser to
determine the tax consequences of a particular exchange.
DIVIDEND REINVESTMENT
Stockholders may elect to have all income dividends and capital gains
distributions reinvested or paid in cash, or to have income dividends reinvested
and capital gains distributions paid in cash or capital gains distributions
reinvested and income dividends paid in cash. See the share purchase application
form included at the back of this Prospectus for further information. If a
stockholder does not specify an election, all income dividends and capital gains
distributions will automatically be reinvested in full and fractional shares of
the Fund calculated to the nearest 1,000th of a share. Shares are purchased at
the net asset value in effect on the business day after the dividend record date
and are credited to the stockholder's account on the dividend payment date. Cash
dividends are mailed to stockholders within 5 business days of the dividend
record date. As in the case of normal purchases, stock certificates are not
issued unless requested. Stockholders will be advised of the number of shares
purchased and the price following each reinvestment. An election to reinvest or
receive dividends and distributions in cash will apply to all shares of the Fund
registered in the same name, including those previously purchased.
A stockholder may change an election at any time by notifying the Fund in
writing or, subject to certain limited exceptions, by calling Firstar Trust
Company at (800) 656-3017 or (414) 765-4124. If such a notice is received
between a dividend declaration date and payment date, it will become effective
on the day following the payment date. The Fund may modify or terminate its
dividend reinvestment program at any time on thirty days' written notice to
participants.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund will endeavor to qualify annually for and elect tax treatment
applicable to a regulated investment company under Subchapter M of the Internal
Revenue Code (the ''Code''). Pursuant to the requirements of the Code, the Fund
intends to distribute annually, to its stockholders, substantially all of its
net investment income and net realized capital gains, if any, less any available
capital loss carry-over, to avoid paying income tax on its net investment income
and net realized capital gains or being subject to a federal excise tax on
undistributed net investment income and net realized capital gains. The primary
distribution will normally be made near the end of October, following the close
of the Fund's fiscal year, with a secondary distribution, if required, at the
end of December. For federal income tax purposes, distributions by the Fund,
whether invested in additional shares of Common Stock or received in cash, will
be taxable to the Fund's stockholders except those stockholders that are not
subject to tax on their income. Stockholders will be notified annually as to the
federal tax status of dividends and distributions. Currently, short-term capital
gains are treated as dividend income for federal income tax purposes and are
generally subject to U.S. withholding for non-resident alien stockholders. They
will be reported as such on the year-end Form 1099. For federal income tax
purposes, a stockholder's original cost for his shares, including shares
purchased pursuant to reinvested dividends, continues as his basis, and on
redemption his gain or loss is the difference between such basis and the
redemption price. Distributions and redemptions may also be taxed under state
and local tax laws which may differ from the Code.
CAPITAL STRUCTURE
The Fund's authorized capital consists of 200,000,000 shares of Common Stock.
Stockholders are entitled: (i) to one vote per full share of Common Stock; (ii)
to such distributions as may be declared by the Fund's Board of Directors out of
funds legally available; and (iii) upon liquidation, to participate ratably in
the assets available for distribution. There are no conversion or sinking fund
provisions applicable to the shares, and the holders have no preemptive rights
and may not cumulate their votes in the election of directors. Consequently the
holders of more than 50% of the shares of Common Stock voting for the election
of directors can elect the entire Board of Directors and in such event the
holders of the remaining shares voting for the election of directors will not be
able to elect any person or persons to the Board of Directors. The Maryland
General Corporation Law permits registered investment companies, such as the
Fund, to operate without an annual meeting of stockholders under specified
circumstances if an annual meeting is not required by the Investment Company Act
of 1940. The Fund has adopted the appropriate provisions in its By-Laws and does
not anticipate holding an annual meeting in any year in which the election of
directors is not required to be acted on by stockholders under the Investment
Company Act of 1940. The Fund also has adopted provisions in its By-Laws for the
removal of directors by the stockholders.
The shares are redeemable and are transferable. All shares issued and sold by
the Fund will be fully paid and nonassessable. Fractional shares of Common Stock
entitle the holder to the same rights as whole shares of Common Stock. Firstar
Trust Company, 615 East Michigan Street, Milwaukee, Wisconsin 53202 acts as the
Fund's transfer agent and dividend disbursing agent.
The Fund will not issue certificates evidencing shares of Common Stock
purchased unless so requested in writing. Where certificates are not issued, the
stockholder's account will be credited with the number of shares purchased,
relieving stockholders of responsibility for safekeeping of certificates and the
need to deliver them upon redemption. Written confirmations are issued for all
purchases of Common Stock. Any stockholder may deliver certificates to Firstar
Trust Company and direct that his account be credited with the shares. A
stockholder may direct Firstar Trust Company at any time to issue a certificate
for his shares of Common Stock without charge.
STOCKHOLDER REPORTS
Stockholders will be provided at least semi-annually with a report showing
the Fund's portfolio and other information and annually after the close of the
Fund's fiscal year, which ends September 30, with an annual report containing
audited financial statements. Stockholders who have questions about the Fund
should write to: Brandywine Fund, Inc., P.O. Box 4166, Greenville, Delaware
19807, Attention: Corporate Secretary, or E-mail: [email protected]. Questions
about the Fund or individual accounts may be directed toll free to Firstar Trust
Company at (800) 656-3017 or (414) 765-4124.
PERFORMANCE INFORMATION
The Fund's average annual compounded rate of return is the rate of return
which, if applied to an initial investment in the Fund at the beginning of a
stated period and compounded annually over the period, would result in the
redeemable value of the investment in the Fund at the end of the stated period.
The calculation assumes reinvestment of all dividends and distributions and
reflects the effect of all recurring fees but ignores individual income tax
consequences to stockholders.
COMPARISON OF CHANGE IN VALUE OF $25,000 INVESTMENT IN
BRANDYWINE FUND AND S&P 500 INDEX
AVERAGE ANNUAL TOTAL RETURN
1-YEAR +45.5%
5-YEAR +26.1%
SINCE INCEPTION 12/30/85*<F5> +19.6%
date Brandywine Fund S&P 500 Index
12/30/85 $25,000 $25,000
9/30/86 $27,525 $28,050
9/30/87 $42,609 $40,224
9/30/88 $35,110 $35,156
9/30/89 $48,802 $46,651
9/30/90 $44,947 $42,313
9/30/91 $63,555 $55,599
9/30/92 $67,305 $61,770
9/30/93 $100,015 $69,801
9/30/94 $98,615 $72,313
9/30/95 $143,484 $93,863
*<F5>inception date
Past performance is not predictive of future performance.
The results below show the value of an assumed initial investment of $25,000
made on December 31, 1985 through December 31, 1995, assuming reinvestment of
all dividends and distributions.
VALUE OF VALUE OF
$25,000 CUMULATIVE $25,000 CUMULATIVE
DECEMBER 31 INVESTMENT % CHANGE DECEMBER 31 INVESTMENT % CHANGE
- ----------- ---------- ---------- ----------- ---------- ----------
1985 $25,000 - 1991 $70,091 +180.4%
1986 29,098 +16.4% 1992 81,081 +224.3
1987 29,866 +19.5 1993 99,389 +297.6
1988 35,142 +40.6 1994 99,406 +297.6
1989 46,724 +86.9 1995 134,940 +439.8
1990 46,985 +87.9
The foregoing performance results are historical and should not be considered
indicative of the future performance of the Fund. An investment in the Fund will
fluctuate in value and at redemption its value may be more or less than the
initial investment. The Fund may compare its performance to other mutual funds
with similar investment objectives and to the industry as a whole, as reported
by Lipper Analytical Services, Inc., Money, Forbes, Business Week and Barron's
magazines and Investor's Business Daily and The Wall Street Journal newspapers.
The Fund may also compare its performance to the Dow Jones Industrial Average,
Nasdaq Industrials Index, Value Line Index, the Standard &Poor's 500 Stock Index
and others. Such comparisons may be made in advertisements, stockholder reports
or other communications to stockholders.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The principal factor affecting the Fund's performance for the fiscal year
ended September 30, 1995 was the selection and purchase by the Adviser of stocks
of companies with earnings growth substantially in excess of the overall market,
in accordance with the investment philosophy described under ''Investment
Objective and Policies.''
The increase of 45.5% in share value reflected particularly a resurgence of
technology stock holdings. The broader based S&P 500 Index rose 29.7% for the
year, while the more growth-oriented Mutual Fund Index of Investor's Business
Daily increased 31.1% in the period. For the five-year period ended September
30, 1995, the Fund's average annual total return was 26.1% as compared to 17.2%
for the S&P 500 Index and 17.9% for the Mutual Fund Index. The Mutual Fund Index
consists of 20 growth-oriented mutual funds selected primarily on the basis of
their size, reputation and historical performance.
The Fund focused particularly on companies with new products, services, or
markets, which were growing rapidly in an improving economic environment or
which were taking market share from the competition.
Sales of stocks to provide for replacing existing holdings with better ones
in line with the Adviser's strategy of ''forced displacement'', resulted in a
continuing high turnover of 194% in the portfolio for the twelve-month period.
BRANDYWINE FUND, INC.
SHARE PURCHASE APPLICATION This is a Follow-Up application to
MINIMUM INVESTMENT $25,000 INITIAL, an investment by wire transfer.
$1,000 SUBSEQUENT
Mail To: Overnight Delivery to:
Brandywine Fund, Inc. Brandywine Fund, Inc.
c/o Firstar Trust Company c/o Firstar Trust Company
P.O. Box 701 615 East Michigan St., Third Floor
Milwaukee, Wisconsin 53201-0701 Milwaukee, Wisconsin 53202
Enclosed is my check or money order for $ (minimum $25,000)
------------------
made payable to Brandywine Fund, Inc.
REGISTRATION OF SHARES
PLEASE PRINT CLEARLY (complete one section only)
Individual:
-----------------------------------------------------------------
First Name Middle Initial Last Name
Joint Owner:
----------------------------------------------------------------
(cannot be a First Name Middle Initial Last Name
minor)
Gift to Minor:
---------------------------------------------------------------
Custodian's Name (only one permitted)
---------------------------------------------------------------
Minor's Name (only one permitted) Birthdate
Trust, Estate or Guardianship: as Trustee(s) for
-----------------------------
(including Corporate Pension Plans) Name of Trustee(s)
- -----------------------------------------------------------------------------
Name of Trust
under agreement dated
-------------------------------------------
Date of Trust Agreement
Corporate, Partnership or other entity:
-------------------------------------
(A corporate resolution form is required)Name of Corporation or other entity
Mailing Address:
- ----------------------------------------------------------------------
Name Mr. Ms. Mr. & Mrs.
- ----------------------------------------------------------------------
Street Address
- ----------------------------------------------------------------------
City State Zip
- ----------------------------------------------------------------------
Home Phone Business Phone
Send duplicate confirmation to:
- ----------------------------------------------------------------------
Name
- ----------------------------------------------------------------------
Address
- ----------------------------------------------------------------------
TELEPHONE REDEMPTION OPTION - (800) 656-3017 OR (414) 765-4124
I (we) authorize Brandywine Fund, Inc., to act upon my (our) telephone
instructions to redeem shares from this account:
By wire. The proceeds of any redemption may be wired to your bank. A wire fee
will be charged.
--------------------------------------------------------------------------
Name on Bank Account Account Number
--------------------------------------------------------------------------
Bank Name and Address
Please attach a voided, unsigned check or savings deposit slip for the bank
account referenced above.
By mail. The proceeds of any redemption may be mailed only to the name and
address in which your account is registered.
SYSTEMATIC WITHDRAWALS
I would like to withdraw from Brandywine Fund, Inc., $ (no minimum)
----------
I would like to have payments made to me on or about the day of
-----
each month or only those months checked below:
Jan. Feb. Mar. Apr. May June
July Aug. Sept. Oct. Nov. Dec.
DISTRIBUTION OPTIONS
Please check one:
Reinvest all income dividends and capital gains distributions
Pay all income dividends and capital gains distributions in cash
Reinvest all capital gains distributions (including short-term capital gains)
and pay all income dividends in cash
Reinvest all income dividends and pay all capital gains distributions
(including short-term capital gains) in cash
- ----------------------------------------- Yes No
------ ------
Owner's Social Security Number or T.I.N. I am a U.S. Citizen
If you do not have a Social Security or Tax I.D. Number, you should indicate
that an application to obtain a number is pending by writing ''Applied For.''
The Fund is required to withhold taxes if a number is not delivered to the Fund
within 7 days.
I certify under penalty of perjury that:
1) The Social Security or other Tax I.D. Number stated above is correct.
2) I am not subject to backup withholding because:*<F6>
a. The IRS has not informed me that I am subject to backup withholding.
b. The IRS has notified me that I am no longer subject to backup withholding.
- -----------------------------------------------------------------------------
Signature of Owner, Trustee or Custodian
- -----------------------------------------------------------------------------
Print or Type Name
Date:
--------------------------------
- ----------------------------------------------------------------------
Signature of Joint Owner (if any)
- ----------------------------------------------------------------------
Print or Type Name
Date:
--------------------------------
*<F6>If this statement is not true and you are subject to backup withholding,
strike out Section 2.
CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING AGENT
FIRSTAR TRUST COMPANY
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
BRANDYWINE FUND, INC.
3908 Kennett Pike
Greenville, Delaware 19807
Internet: [email protected]
(800)656-3017
STATEMENT OF ADDITIONAL INFORMATION January 31, 1996
BRANDYWINE FUND, INC.
3908 Kennett Pike
Greenville, Delaware 19807
This Statement of Additional Information is not a prospectus and
should be read in conjunction with the prospectus of Brandywine Fund, Inc.
dated January 31, 1996. Requests for copies of the prospectus should be
made in writing to Brandywine Fund, Inc., P.O. Box 4166, Greenville,
Delaware, 19807, Attention: Corporate Secretary, Internet: bfunds @
friess.com, or by calling (800) 656-3017.
BRANDYWINE FUND, INC.
Table of Contents
Page No.
Investment Restrictions ........................... 1
Directors and Officers of the Fund ................ 3
Principal Stockholders ............................ 6
Investment Adviser ................................ 6
Service Agreement ................................. 8
Determination of Net Asset Value and Performance... 8
Purchase of Shares................................. 9
Systematic Withdrawal Plan ........................ 9
Allocation of Portfolio Brokerage ................. 10
Custodian ......................................... 12
Taxes ............................................. 12
Stockholder Meetings .............................. 13
Independent Accountants ........................... 14
Financial Statements .............................. 14
No person has been authorized to give any information or to make
any representations other than those contained in this Statement of
Additional Information and the Prospectus dated January 31, 1996 and, if
given or made, such information or representations may not be relied upon
as having been authorized by Brandywine Fund, Inc.
This Statement of Additional Information does not constitute an
offer to sell securities.
INVESTMENT RESTRICTIONS
As set forth in the prospectus dated January 31, 1996 of
Brandywine Fund, Inc. (the "Fund") under the caption "Investment Objective
and Policies", the primary investment objective of the Fund is to produce
long-term capital appreciation principally through investing in common
stocks. Current income is a secondary consideration. Consistent with its
investment objective, the Fund has adopted the following investment
restrictions which are matters of fundamental policy and cannot be changed
without approval of the holders of the lesser of: (i) 67% of the Fund's
shares present or represented at a stockholder's 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.
1. The Fund will not purchase securities on margin,
participate in a joint-trading account, sell securities short, or write or
invest in put or call options. The Fund's investments in warrants, valued
at the lower of cost or market, will not exceed 5% of the value of the
Fund's net assets and of such 5% not more than 2% of the Fund's net assets
at the time of purchase may be invested in warrants that are not listed on
the New York or American Stock Exchanges.
2. The Fund will not borrow money or issue senior securities,
except for temporary bank borrowings or for emergency or extraordinary
purposes (but not for the purpose of purchase of investments) and then
only in an amount not in excess of 5% of the value of its net assets and
will not pledge any of its assets except to secure borrowings and then
only to an extent not greater than 10% of the value of the Fund's net
assets. The Fund will not purchase securities while it has any
outstanding borrowings.
3. The Fund will not lend money (except by purchasing publicly
distributed debt securities or entering into repurchase agreements
provided that repurchase agreements maturing in more than seven days plus
all other illiquid securities will not exceed 10% of the Fund's total
assets) and will not lend its portfolio securities.
4. The Fund will not purchase securities of other investment
companies except (a) as part of a plan of merger, consolidation or
reorganization approved by the stockholders of the Fund or (b) securities
of registered closed-end investment companies on the open market where no
commission or profit results, other than the usual and customary broker's
commission and where as a result of such purchase the Fund would hold less
than 3% of any class of securities, including voting securities, of any
registered closed-end investment company and less than 5% of the Fund's
assets, taken at current value, would be invested in securities of
registered closed-end investment companies.
5. The Fund will not make investments for the purpose of
exercising control or management of any company.
6. The Fund will limit its purchases of securities of any
issuer (other than the United States or an instrumentality of the United
States) in such a manner that it will satisfy at all times the
requirements of Section 5(b)(1) of the Investment Company Act of 1940
(i.e., that at least 75% of the value of its total assets is represented
by cash and cash items (including receivables), U.S. Government
Securities, securities of other investment companies, and other securities
for the purpose of the foregoing limited in respect of any one issuer to
an amount not greater than 5% of the value of the total assets of the Fund
and to not more than 10% of the outstanding voting securities of such
issuer.)
7. The Fund will not concentrate 25% or more of the value of
its total assets, determined at the time an investment is made, exclusive
of government securities, in securities issued by companies engaged in the
same industry.
8. The Fund will not 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 adviser.
9. The Fund will not 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 adviser
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.
10. The Fund will not act as an underwriter or distributor of
securities other than shares of the Fund and will not purchase any
securities which are restricted from sale to the public without
registration under the Securities Act of 1933, as amended.
11. The Fund will not purchase any interest in any oil, gas or
any other mineral exploration or development program.
12. The Fund will not purchase or sell real estate (including
limited partnership interests of limited partnerships investing in real
estate, but not including readily marketable investments in real estate
investment trusts or readily marketable securities of companies investing
in real estate) or real estate mortgage loans.
13. The Fund will not purchase or sell commodities or
commodities contracts.
DIRECTORS AND OFFICERS OF THE FUND
The name, address, principal occupations during the past five
years and other information with respect to each of the directors and
officers of the Fund are as follows:
FOSTER S. FRIESS*
350 Broadway
P. O. Box 576
Jackson, Wyoming
(PRESIDENT, TREASURER AND A
DIRECTOR OF THE FUND)
Mr. Friess, age 55, has served as President, Treasurer and a
director of both the Fund and the Brandywine Blue Fund, Inc. since their
inceptions in 1985 and November, 1990, respectively. He is also President
and Chairman of the Board of Friess Associates, Inc., an investment
advisory firm which he co-founded in 1974 with his wife, Lynnette E.
Friess. Friess Associates, Inc. has been the investment adviser of the
Fund since its inception. Mr. Friess has been a Chartered Financial
Analyst since 1970. He is currently Chairman of the Life Enrichment
Foundation, Wilmington, Delaware. He is also a member of the Advisory
Council of the Royal Swedish Academy of Sciences.
STIG RAMEL
RESEDAVAGEN 8
171732, Solna
Sweden
(DIRECTOR)
Mr. Ramel, age 68, served as President of the Nobel Foundation
from 1972 to 1992 and was thereafter appointed by the Swedish Government
as Chairman of Fond 92-94, a nonprofit organization with the
responsibility of financing scientific research institutions. He is a
member of the Royal Academy of Sciences and Director of the Board of
Gustavus Adolphus College in Minnesota. Mr. Ramel is also Chairman or a
board member of 15 foreign companies and organizations. He has served as
a director of the Fund since its inception in 1985 and as a director of
Brandywine Blue Fund, Inc. since its inception in 1990.
JOHN E. BURRIS
5th and McColley Street
Milford, Delaware
(DIRECTOR)
Mr. Burris, age 75, is Chairman of Burris Foods, Inc. He is a
trustee of the University of Delaware and a member of the Board of
Directors of Wilmington Trust Company. He is also a member of the board
of directors of Milford Memorial Hospital and of the Private Industry
Council for the State of Delaware. Mr. Burris has served as a director of
the Fund since its inception in 1985 and as a director of Brandywine Blue
Fund, Inc. since its inception in 1990.
WILLIAM F. D'ALONZO
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT)
Mr. D'Alonzo, age 41, has been an analyst for Friess Associates,
Inc. since 1981. He has served as a Vice President of the Fund since
April, 1990, and as a Vice President of Brandywine Blue Fund, Inc. since
November, 1990.
CLARKE ADAMS, JR.
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT)
Mr. Adams, age 50, has been an analyst for Friess Associates,
Inc. since 1983. He has served as a Vice President of the Fund since
April, 1990, and as a Vice President of Brandywine Blue Fund, Inc. since
November, 1990.
CARL S. GATES
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT)
Mr. Gates, age 63, has been employed by Friess Associates, Inc.
in various capacities since 1988. He has served as a Vice President of
both the Fund and Brandywine Blue Fund, Inc. since April, 1994.
PAUL R. ROBINSON
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT AND ASSISTANT SECRETARY)
Mr. Robinson, age 72, has been a consultant for Friess
Associates, Inc. since June, 1985. He has served as a Vice President of
the Fund since April, 1990, as Assistant Secretary of the Fund since
April, 1987, and as a Vice President and Assistant Secretary of the
Brandywine Blue Fund, Inc. since November, 1990.
LYNDA J. CAMPBELL
3908 Kennett Pike
Greenville, Delaware
(SECRETARY)
Ms. Campbell, age 50, is an employee of Friess Associates, Inc.
and has been employed in various capacities with such firm since December,
1985. She has served as Secretary of the Fund since December, 1989 and as
Secretary of Brandywine Blue Fund, Inc. since November, 1990.
___________________
* Mr. Friess is the only director who is an "interested person" of the
Fund as that term is defined in the Investment Company Act of 1940.
During the fiscal year ended September 30, 1995, the Fund paid
$16,667 in director's fees to the Fund's disinterested directors. The
Fund's standard method of compensating directors is to pay each
disinterested director an annual fee of $10,000. The Fund may also
reimburse its directors for travel expenses incurred to attend meetings of
the Board of Directors.
The table below sets forth the compensation paid by the Fund to
each of the directors of the Fund during the fiscal year ended September
30, 1995:
COMPENSATION TABLE
Pension or
Retirement Estimated Total
Benefits Annual Compensation
Aggregate Accrued As Benefits from Fund
Compensation Part of Fund Upon Paid to
Name of Person From Fund Expenses Retirement Directors
Foster S. Friess $0 $0 $0 $0
Stig Ramel $ 6,667 $0 $0 $ 6,667
John E. Burris $10,000 $0 $0 $10,000
PRINCIPAL STOCKHOLDERS
At December 31, 1995, all officers and directors of the Fund as
a group beneficially owned less than 1% of the outstanding shares of
Common Stock. At such date, Charles Schwab & Co., Inc., 101 Montgomery
Street, San Francisco, California 94104, owned of record 17,836,250 shares
of Common Stock, or 11.9% of the then outstanding shares. All of the
shares owned by Charles Schwab & Co., Inc. where owned of record only.
Other than the foregoing, the Fund was not aware of any person who, as of
December 31, 1995, owned of record or beneficially 5% or more of the
shares of the Fund.
INVESTMENT ADVISER
As set forth in the Prospectus under the caption "Management of
the Fund" the investment adviser to the Fund is Friess Associates, Inc.
(the "Adviser"). Pursuant to an investment advisory agreement between the
Fund and the Adviser (the "Agreement") the Adviser furnishes continuous
investment advisory services and management to the Fund. During the
fiscal years ended September 30, 1995, September 30, 1994 and September
30, 1993, the Fund paid the Adviser fees of $28,671,459, $18,109,780 and
$9,863,740, respectively.
The Fund will pay all of its expenses not assumed by the Adviser
including, but not limited to, the costs of preparing and printing its
registration statements required under the Securities Act of 1933 and the
Investment Company Act of 1940 and any amendments thereto, the expenses of
registering its shares with the Securities and Exchange Commission and in
the various states, the printing and distribution cost of prospectuses
mailed to existing stockholders, the cost of stock certificates, director
and officer liability insurance, reports to stockholders, reports to
government authorities and proxy statements, interest charges, brokerage
commissions, and expenses incurred in connection with portfolio
transactions. During the fiscal years ended September 30, 1995, September
30, 1994 and September 30, 1993, such expenses included $28,100, $30,400
and $24,115, respectively, in administrative services performed by the
Adviser. The Fund will also pay the fees of directors who are not
interested persons of the Fund, salaries of administrative and clerical
personnel, association membership dues, auditing and accounting services,
fees and expenses of any custodian or trustees having custody of Fund
assets, expenses of calculating the net asset value and repurchasing and
redeeming shares, and charges and expenses of dividend disbursing agents,
registrars, and stock transfer agents, including the cost of keeping all
necessary stockholder records and accounts and handling any problems
related thereto.
The Adviser has undertaken to reimburse the Fund to the extent
that the aggregate annual operating expenses, including the investment
advisory fee but excluding interest, taxes, brokerage commissions and
extraordinary items, exceed that percentage of the average net asset value
of the Fund for such year, as determined by valuations made as of the
close of each business day of the year, which is the most restrictive
percentage provided by the state laws of the various states in which the
Common Stock is qualified for sale. As of the date of this Statement of
Additional Information the percentage applicable to the Fund is 2-1/2% on
the first $30,000,000 of its average net assets, 2% on the next
$70,000,000 of its average net assets and 1-1/2% of its average net assets
in excess of $100,000,000. The Fund monitors its expense ratio on at least
a monthly basis. If the accrued amount of the expenses of the Fund exceeds
the expense limitation, the Fund creates an account receivable from the
Adviser for the amount of such excess. In such a situation the monthly
payment of the Adviser's fee will be reduced by the amount of such excess,
subject to adjustment month by month during the balance of the Fund's
fiscal year if accrued expenses thereafter fall below this limit. No
reimbursement was required during the fiscal years ended September 30,
1995, September 30, 1994 and September 30, 1993.
The Agreement will remain in effect as long as its continuance
is specifically approved at least annually, by (i) the Board of Directors
of the Fund, or by the vote of a majority (as defined in the Investment
Company Act of 1940) of the outstanding shares of the Fund, and (ii) by
the vote of a majority of the directors of the Fund who are not parties to
the Agreement or interested persons of the Adviser, cast in person at a
meeting called for the purpose of voting on such approval. The Agreement
provides that it may be terminated at any time without the payment of any
penalty, by the Board of Directors of the Fund or by vote of a majority of
the Fund's stockholders, on sixty days written notice to the Adviser, and
by the Adviser on the same notice to the Fund and that it shall be
automatically terminated if it is assigned.
The Agreement provides that the Adviser shall not be liable to
the Fund or its stockholders for anything other than willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or
duties. The Agreement also provides that the Adviser and its officers,
directors and employees may engage in other businesses, devote time and
attention to any other business whether of a similar or dissimilar nature,
and render investment advisory services to others.
SERVICE AGREEMENT
As described in the Fund's prospectus under the caption
"Management of the Fund," the Fund and Fiduciary Management, Inc.,
Milwaukee, Wisconsin have entered into a Service Agreement pursuant to
which certain accounting and record keeping services will be performed for
the Fund by Fiduciary Management, Inc. For its services the Fund
currently pays Fiduciary Management, Inc. an annual fee of $310,000. The
total fees paid pursuant to the Service Agreement for the fiscal years
ending September 30, 1995, September 30, 1994 and September 30, 1993 were
$210,000, $190,000 and $95,000, respectively. The Service Agreement may
be terminated at any time by either the Fund or Fiduciary Management, Inc.
upon 90 days' written notice. The Service Agreement provides that
Fiduciary Management, Inc. shall not be liable to the Fund, the Adviser or
any stockholders of the Fund for anything other than willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or
duties. Fiduciary Management, Inc. performs similar services for other
investment companies.
DETERMINATION OF NET ASSET VALUE AND PERFORMANCE
As set forth in the Prospectus under the caption "Determination
of Net Asset Value" the net asset value of the Fund will be determined as
of the close of trading on each day the New York Stock Exchange is open
for trading. The New York Stock Exchange is open for trading Monday
through Friday except New Year's Day, Washington's Birthday, 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 New York Stock Exchange will not be open for trading on the
preceding Friday and when any such holiday falls on a Sunday, the New York
Stock Exchange will not be open for trading on the succeeding Monday,
unless unusual business conditions exist, such as the ending of a monthly
or the yearly accounting period.
Any total rate of return quotation for the Fund will be for a
period of three or more months and will assume the reinvestment of all
dividends and capital gains distributions which were made by the Fund
during that period. Any period total rate of return quotation of the Fund
will be calculated by dividing the net change in value of a hypothetical
shareholder account established by an initial payment of $1,000 at the
beginning of the period by 1,000. The net change in the value of a
shareholder account is determined by subtracting $1,000 from the product
obtained by multiplying the net asset value per share at the end of the
period by the sum obtained by adding (A) the number of shares purchased at
the beginning of the period plus (B) the number of shares purchased during
the period with reinvested dividends and distributions. Any average
annual compounded total rate of return quotation of the Fund will be
calculated by dividing the redeemable value at the end of the period
(i.e., the product referred to in the preceding sentence) by $1,000. A
root equal to the period, measured in years, in question is then
determined and 1 is subtracted from such root to determine the average
annual compounded total rate of return.
The foregoing computation may also be expressed by the following
formula:
n
P(1+T) = ERV
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the stated periods at
the end of the stated periods.
PURCHASE OF SHARES
The Fund has adopted procedures pursuant to Rule 17a-7
under the Investment Company Act of 1940 pursuant to which the Fund may
effect a purchase and sale transaction with an affiliated person of the
Fund (or an affiliated person of such an affiliated person) in which the
Fund issues its shares in exchange for securities of a character which is
a permitted investment for the Fund. For purposes of determining the
number of shares of the Fund to be issued, the securities to be exchanged
will be valued in accordance with the requirements of Rule 17a-7. No such
transactions will be made with respect to any person in which an
affiliated person of the Fund has a beneficial interest.
SYSTEMATIC WITHDRAWAL PLAN
A stockholder who owns Fund shares worth at least $25,000
at the current net asset value may, by completing an application which may
be obtained from Firstar Trust Company, create a Systematic Withdrawal
Plan from which a fixed sum will be paid to the stockholder at regular
intervals. To establish the Systematic Withdrawal Plan, the stockholder
deposits Fund shares with the Fund and appoints it as agent to effect
redemptions of Fund shares held in the account for the purpose of making
monthly or quarterly withdrawal payments of a fixed amount to the
stockholder out of the account. Fund shares deposited by the stockholder
in the account need not be endorsed or accompanied by a stock power if
registered in the same name as the account; otherwise, a properly executed
endorsement or stock power, obtained from any bank, broker-dealer or the
Fund is required. The stockholder's signature should be guaranteed by a
bank, member firm of a national stock exchange, or other eligible
guarantor institution.
There is no minimum withdrawal payment. These payments
will be made from the proceeds of periodic redemption of shares in the
account at net asset value. Redemptions will be made on the nineteenth
day of each month or, if that day is a holiday, on the next preceding
business day. Establishment of a Systematic Withdrawal Plan constitutes
an election by the stockholder to reinvest in additional Fund shares, at
net asset value, all income dividends and capital gains distributions
payable by the Fund on shares held in such account, and shares so acquired
will be added to such account. The stockholder may deposit additional
Fund shares in his account at any time.
Withdrawal payments cannot be considered as yield or income
on the stockholder's investment, since portions of each payment will
normally consist of a return of capital. Depending on the size or the
frequency of the disbursements requested, and the fluctuation in the value
of the Fund's portfolio, redemptions for the purpose of making such
disbursements may reduce or even exhaust the stockholder's account.
The stockholder may vary the amount or frequency of
withdrawal payments, temporarily discontinue them, or change the
designated payee or payee's address, by notifying Firstar Trust Company in
writing. The stockholder also may vary the amount or frequency of
withdrawal payments or temporarily discontinue them by notifying Firstar
Trust Company by telephone at (800) 656-3017 or (414) 765-4124.
ALLOCATION OF PORTFOLIO BROKERAGE
Decisions to buy and sell securities for the Fund are made
by the Adviser subject to review by the Fund's Board of Directors. In
placing purchase and sale orders for portfolio securities for the Fund, it
is the policy of the Adviser 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
favorable price involves a number of largely judgmental considerations.
Among these are the Adviser's evaluation of the broker's efficiency in
executing and clearing transactions, block trading capability (including
the broker's willingness to position securities) 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. Over-the-counter securities are
generally purchased and sold directly with principal market makers who
retain the difference in their cost in the security and its selling price.
In some instances, the Adviser feels that better prices are available from
non-principal market makers who are paid commissions directly. While some
brokers with whom the Fund effects portfolio transactions may recommend
the purchase of the Fund's shares, the Fund may not allocate portfolio
brokerage on the basis of recommendations to purchase shares of the Fund.
In allocating brokerage business for the Fund, the Adviser
also takes 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, market timing and technical information, and
the availability of the brokerage firm's analysts for consultation. While
the Adviser believes these services have substantial value, they are
considered supplemental to the Adviser's own efforts in the performance of
its duties under the Agreement. Other clients of the Adviser may
indirectly benefit from the availability of these services to the Adviser,
and the Fund may indirectly benefit from services available to the Adviser
as a result of transactions for other clients. The Agreement provides
that the Adviser may cause the Fund to pay a broker which provides
brokerage and research services to the Adviser a commission for effecting
a securities transaction in excess of the amount another broker would have
charged for effecting the transaction, if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the
value of brokerage and research services provided by the executing broker
viewed in terms of either the particular transaction or the Adviser's
overall responsibilities with respect to the Fund and the other accounts
as to which he exercises investment discretion. Brokerage commissions
paid by the Fund during the fiscal years ended September 30, 1995,
September 30, 1994 and September 30, 1993, totaled $12,220,916 on total
transactions of $11,956,863,544, $6,098,048 on total transactions of
$5,715,968,346 and $3,933,965 on total transactions of $2,971,906,752,
respectively. All of the brokers to whom commissions were paid provided
research services to the Adviser.
CUSTODIAN
Firstar Trust Company, 615 East Michigan Street, Milwaukee,
Wisconsin 53202, acts as custodian for the Fund. As such, Firstar Trust
Company holds all securities and cash of the Fund, delivers and receives
payment for securities sold, receives and pays for securities purchased,
collects income from investments and performs other duties, all as
directed by officers of the Fund. Firstar Trust Company does not exercise
any supervisory function over the management of the Fund, the purchase and
sale of securities or the payment of distributions to stockholders.
Firstar Trust Company also acts as the Fund's transfer agent and dividend
disbursing agent.
TAXES
As set forth in the Prospectus under the caption
"Dividends, Distributions and Taxes" the Fund will endeavor to qualify
annually for and elect tax treatment applicable to a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
Dividends from the Fund's net investment income and
distributions from the Fund's net realized short-term capital gains are
taxable to stockholders as ordinary income, whether received in cash or in
additional shares of Common Stock. The 70% dividends-received deduction
for corporations will apply to such dividends and distributions, subject
to proportionate reductions if the aggregate dividends received by the
Fund from domestic corporations in any year are less than 100% of the
Fund's gross income.
Any dividend or capital gains distribution paid shortly
after a purchase of shares of Common Stock will have the effect of
reducing the per share net asset value of such shares by the amount of the
dividend or distribution. Furthermore, if the net asset value of the
shares of Common Stock immediately after a dividend or distribution is
less than the cost of such shares to the stockholder, the dividend or
distribution will be taxable to the stockholder even though it results in
a return of capital to him.
The Fund may be required to withhold Federal income tax at
a rate of 31% ("backup withholding") from dividend payments and redemption
proceeds if a stockholder fails to furnish the Fund with his social
security or other tax identification number and certify under penalty of
perjury that such number is correct and that he is not subject to backup
withholding due to the under-reporting of income. The certification form
is included as part of the share purchase application and should be
completed when the account is opened.
STOCKHOLDER MEETINGS
The Maryland General Corporation Law permits registered
investment companies, such as the Fund, to operate without an annual
meeting of stockholders under specified circumstances if an annual meeting
is not required by the Investment Company Act of 1940. The Fund has
adopted the appropriate provisions in its By-Laws and may, at its
discretion, not hold an annual meeting in any year in which the election
of directors is not required to be acted on by stockholders under the
Investment Company Act of 1940.
The Fund's By-Laws also contain procedures for the removal
of directors by its stockholders. At any meeting of stockholders, duly
called and at which a quorum is present, the stockholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be
cast thereon, remove any director or directors from office and may elect a
successor or successors to fill any resulting vacancies for the unexpired
terms of removed directors.
Upon the written request of the holders of shares entitled
to not less than ten percent (10%) of all the votes entitled to be cast at
such meeting, the Secretary of the Fund shall promptly call a special
meeting of stockholders for the purpose of voting upon the question of
removal of any director. Whenever ten or more stockholders of record who
have been such for at least six months preceding the date of application,
and who hold in the aggregate either shares having a net asset value of at
least $25,000 or at least one percent (1%) of the total outstanding
shares, whichever is less, shall apply to the Fund's Secretary in writing,
stating that they wish to communicate with other stockholders with a view
to obtaining signatures to a request for a meeting as described above and
accompanied by a form of communication and request which they wish to
transmit, the Secretary shall within five business days after such
application either: (1) afford to such applicants access to a list of the
names and addresses of all stockholders as recorded on the books of the
Fund; or (2) inform such applicants as to the approximate number of
stockholders of record and the approximate cost of mailing to them the
proposed communication and form of request.
If the Secretary elects to follow the course specified in
clause (2) of the last sentence of the preceding paragraph, the Secretary,
upon the written request of such applicants, accompanied by a tender of
the material to be mailed and of the reasonable expenses of mailing,
shall, with reasonable promptness, mail such material to all stockholders
of record at their addresses as recorded on the books unless within five
business days after such tender the Secretary shall mail to such
applicants and file with the Securities and Exchange Commission, together
with a copy of the material to be mailed, a written statement signed by at
least a majority of the Board of Directors to the effect that in their
opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the
basis of such opinion.
After opportunity for hearing upon the objections specified
in the written statement so filed, the Securities and Exchange Commission
may, and if demanded by the Board of Directors or by such applicants
shall, enter an order either sustaining one or more of such objections or
refusing to sustain any of them. If the Securities and Exchange
Commission shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of
such objections, the Securities and Exchange Commission shall find, after
notice and opportunity for hearing, that all objections so sustained have
been met, and shall enter an order so declaring, the Secretary shall mail
copies of such material to all stockholders with reasonable promptness
after the entry of such order and the renewal of such tender.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 100 East Wisconsin Avenue, Suite
1500, Milwaukee, Wisconsin 53202, currently serves as the independent
accountants for the Fund and has so served since the fiscal year ended
September 30, 1989.
FINANCIAL STATEMENTS
The following financial statements are incorporated by reference to the
Annual Report, dated September 30, 1995, of Brandywine Fund, Inc. (File
No. 811-4447), as filed with the Securities and Exchange Commission on
October 26, 1995:
Statement of Net Assets as of September 30, 1995
Statement of Operations for the Year Ended
September 30, 1995
Statements of Changes in Net Assets for the Years
Ended September 30, 1995 and 1994
Financial Highlights for the Years Ended September 30,
1995, 1994, 1993, 1992, 1991, 1990, 1989, 1988 and 1987
and for the period from December 12, 1985 (Commencement
of Operations) to September 30, 1986
Notes to Financial Statements
Report of Independent Accountants
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a.) Financial Statements (Financial Highlights included in Part A
and all incorporated by reference to the Annual Report, dated
September 30, 1995 (File No. 811-4447), of Brandywine Fund,
Inc. (as filed with the Securities and Exchange Commission on
October 26, 1995))
Brandywine Fund, Inc.
Statement of Net Assets as of September 30, 1995
Statement of Operations for the Year Ended
September 30, 1995
Statements of Changes in Net Assets for the Years
Ended September 30, 1995 and 1994
Financial Highlights for the Years Ended September 30, 1995,
1994, 1993, 1992, 1991, 1990, 1989, 1988 and
1987 and for the period from December 12, 1985
(Commencement of Operations) to September 30, 1986
Notes to Financial Statements
Report of Independent Accountants
(b.) Exhibits
(1) Registrant's Articles of Incorporation; Exhibit 1 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(1.1) Articles Supplementary to Articles of Incorporation;
Exhibit 1.1 to Post-Effective Amendment No. 5 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(1.2) Articles Supplementary to Articles of Incorporation;
Exhibit 1.2 to Post-Effective Amendment No. 6 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(2) Registrant's By-Laws; Exhibit 2 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act of
1933.
(2.1) Amendment to Article I, Section 2 of Registrant's By-Laws;
Exhibit 2.1 to Post-Effective Amendment No. 5 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(3) None
(4) Specimen Stock Certificate; Exhibit 4 to Amendment No. 1 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(5) Investment Advisory Agreement; Exhibit 5 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act of
1933.
(6) None
(7) None
(8) Custodian Agreement with Firstar Trust Company; Exhibit 8
to Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411 under the
Securities Act of 1933.
(9) Service Agreement with Fiduciary Management, Inc.; Exhibit
9 to Amendment No. 5 to Registrant's Registration Statement
on Form N-1A is incorporated by reference pursuant to Rule
411 under the Securities Act of 1933.
(10) Opinion of Foley & Lardner, counsel for Registrant; Exhibit
10 to Post-Effective Amendment No. 5 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act of
1933.
(11) Consent of Price Waterhouse LLP
(12) None
(13) Subscription Agreement; Exhibit 13 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act of
1933.
(14) None
(15) None
(16) Schedule for Computation of Performance Quotations; Exhibit
16 to Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A is incorporated by
reference pursuant to Rule 411 under the Securities Act
of 1933
(17) Financial Data Schedule
(18) None
Item 25. Persons Controlled by or under Common Control with Registrant
Registrant is not controlled by any person. Registrant neither
controls any person nor is under common control with any other person.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of December 31, 1995
Common Stock, $.01 par value, 30,719
Item 27. Indemnification
Pursuant to the authority of the Maryland General Corporation
Law, particularly Section 2-418 thereof, Registrant's Board of Directors
has adopted the following By-Law which is in full force and effect and has
not been modified or cancelled:
Article VII
GENERAL PROVISIONS
Section 7. Indemnification.
A. The corporation shall indemnify all of its corporate
representatives against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
them in connection with the defense of any action, suit or proceeding, or
threat or claim of such action, suit or proceeding, whether civil,
criminal, administrative, or legislative, no matter by whom brought, or in
any appeal in which they or any of them are made parties or a party by
reason of being or having been a corporate representative, if the
corporate representative acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation
and with respect to any criminal proceeding, if he had no reasonable cause
to believe his conduct was unlawful provided that the corporation shall
not indemnify corporate representatives in relation to matters as to which
any such corporate representative shall be adjudged in such action, suit
or proceeding to be liable for gross negligence, willful misfeasance, bad
faith, reckless disregard of the duties and obligations involved in the
conduct of his office, or when indemnification is otherwise not permitted
by the Maryland General Corporation Law.
B. In the absence of an adjudication which expressly absolves the
corporate representative, or in the event of a settlement, each corporate
representative shall be indemnified hereunder only if there has been a
reasonable determination based on a review of the facts that
indemnification of the corporate representative is proper because he has
met the applicable standard of conduct set forth in paragraph A. Such
determination shall be made: (i) by the board of directors, by a majority
vote of a quorum which consists of directors who were not parties to the
action, suit or proceeding, or if such a quorum cannot be obtained, then
by a majority vote of a committee of the board consisting solely of two or
more directors, not, at the time, parties to the action, suit or
proceeding and who were duly designated to act in the matter by the full
board in which the designated directors who are parties to the action,
suit or proceeding may participate; or (ii) by special legal counsel
selected by the board of directors or a committee of the board by vote as
set forth in (i) of this paragraph, or, if the requisite quorum of the
full board cannot be obtained therefor and the committee cannot be
established, by a majority vote of the full board in which directors who
are parties to the action, suit or proceeding may participate.
C. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall create a rebuttable presumption that the person was
guilty of willful misfeasance, bad faith, gross negligence or reckless
disregard to the duties and obligations involved in the conduct of his or
her office, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
D. Expenses, including attorneys' fees, incurred in the preparation
of and/or presentation of the defense of a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final
disposition of such action, suit or proceeding as authorized in the manner
provided in Section 2-418(F) of the Maryland General Corporation Law upon
receipt of: (i) an undertaking by or on behalf of the corporate
representative to repay such amount unless it shall ultimately be
determined that he or she is entitled to be indemnified by the corporation
as authorized in this by-law; and (ii) a written affirmation by the
corporate representative of the corporate representative's good faith
belief that the standard of conduct necessary for indemnification by the
corporation has been met.
E. The indemnification provided by this by-law shall not be deemed
exclusive of any other rights to which those indemnified may be entitled
under these by-laws, any agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his or her official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person subject to the limitations imposed from
time to time by the Investment Company Act of 1940, as amended.
F. This corporation shall have power to purchase and maintain
insurance on behalf of any corporate representative against any liability
asserted against him or her and incurred by him or her in such capacity or
arising out of his or her status as such, whether or not the corporation
would have the power to indemnify him or her against such liability under
this by-law provided that no insurance may be purchased or maintained to
protect any corporate representative against liability for gross
negligence, willful misfeasance, bad faith or reckless disregard of the
duties and obligations involved in the conduct of his or her office.
G. "Corporate Representative" means an individual who is or was a
director, officer, agent or employee of the corporation or who serves or
served another corporation, partnership, joint venture, trust or other
enterprise in one of these capacities at the request of the corporation
and who, by reason of his or her position, is, was, or is threatened to be
made, a party to a proceeding described herein.
Insofar as indemnification for and with respect to liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of Registrant pursuant to the foregoing
provisions or otherwise, 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 Registrant of expenses incurred or paid by a
director, officer or controlling person or Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, 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 of whether such indemnification is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
Incorporated by reference to pages 3 through 5 of the Statement
of Additional Information pursuant to Rule 411 under the Securities Act of
1933. Mr. Herman Friess, a director of the Adviser, is a lawyer having
his own practice with offices in Rice Lake, Wisconsin.
Item 29. Principal Underwriters
Registrant has no principal underwriters.
Item 30. Location of Accounts and Records
The accounts, books and other documents required to be
maintained by Registrant pursuant to Section 31(a) of the Investment
Company Act of 1940 and the rules promulgated thereunder are in the
physical possession of Fiduciary Management, Inc. and Registrant's
Custodian as follows: the documents required to be maintained by
paragraphs (4), (5), (6), (7), (10) and (11) of Rule 31a-1(b) will be
maintained by Fiduciary Management, Inc. at its offices at 225 East Mason
Street, Milwaukee, Wisconsin 53202, and all other records will be
maintained by the Custodian.
Item 31. Management Services
All management-related service contracts entered into by
Registrant are discussed in Parts A and B of this Registration Statement.
Item 32. Undertakings
None.
<PAGE>
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 Amended Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amended Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Jackson and
State of Wyoming on the 30th day of January, 1996.
BRANDYWINE FUND, INC.
(Registrant)
By: /s/ Foster S. Friess
Foster S. Friess,
President
Pursuant to the requirements of the Securities Act of 1933, this
Amended Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Name Title Date
/s/ Foster S. Friess Principal Executive, January 30, 1996
Foster S. Friess Financial and Accounting
Officer and Director
/s/ Stig Ramel Director January 30, 1996
Stig Ramel
/s/ John E. Burris Director January 30, 1996
John E. Burris
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
(1) Registrant's Articles of
Incorporation, as amended*
(1.1) Articles Supplementary to
Articles of Incorporation*
(1.2) Articles Supplementary to
Articles of Incorporation*
(2) Registrant's By-Laws, as
amended*
(2.1) Amendment to Article I,
Section 2 of Registrant's
By-Laws*
(3) None
(4) Specimen Stock Certificate*
(5) Investment Advisory Agreement*
(6) None
(7) None
(8) Custodian Agreement with Firstar
Trust Company*
(9) Service Agreement with
Fiduciary Management, Inc.*
(10) Opinion of Foley & Lardner,
counsel for Registrant*
(11) Consent of Price Waterhouse LLP
(12) None
(13) Subscription Agreement*
(14) None
(15) None
(16) Schedule for Computation of Performance Quotations*
(17) Financial Data Schedule
(18) None
_______________
* Incorporated by reference
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this
Post-Effective Amendment No. 11 to the registration statement on Form N-1A
(the "Registration Statement") of our report dated October 13, 1995,
relating to the financial statements and financial highlights appearing in
the September 30, 1995 Annual Report to Shareholders of Brandywine Fund,
Inc., portions of which are incorporated by reference into the
Registration Statement. We also consent to the reference to us under the
heading "Financial Highlights" in the Prospectus and to the reference to
us under the heading "Independent Accountants" in the Statement of
Additional Information.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
January 31, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT FOR THE FUND DATED SEPTEMBER 30, 1995 AND PARTS A AND B OF THE FUND'S
REGISTRATION STATEMENT ON FORM N-1A AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH ANNUAL REPORT AND REGISTRATION STATEMENT.
</LEGEND>
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> SEP-30-1995
<INVESTMENTS-AT-COST> 3,336,383,667
<INVESTMENTS-AT-VALUE> 4,172,748,187
<RECEIVABLES> 61,235,247
<ASSETS-OTHER> 91,207
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<SHARES-COMMON-STOCK> 121,970,335
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