<PAGE> 1
Registration No. 33-6418
1940 Act File No. 811-4946
As filed with the Securities and Exchange Commission on March 31, 1997
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
===============
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. _____ [ ]
Post-Effective Amendment No. 12 [x]
-----
and/or
REGISTRATION STATEMENT UNDER THE [ ]
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 14 [x]
-----
(Check Appropriate box or boxes)
===============
THOMPSON PLUMB FUNDS, INC.
(Exact name of registrant as specified in charter)
8201 EXCELSIOR DRIVE, SUITE 200
MADISON, WISCONSIN 53717
(Address of Principal Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (608) 831-1300
THOMAS G. PLUMB
8201 EXCELSIOR DRIVE, SUITE 200
MADISON, WISCONSIN 53717
(name and Address of Agent for Service)
Copy to:
CONRAD G. GOODKIND, ESQ.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, WI 53202
It is proposed that this filing will 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
Registrant has registered an indefinite number of shares of Common Stock,
par value $0.01, under the Securities Act of 1933 pursuant to Rule 24f-2 under
the Investment Company Act of 1940. On January 23, 1997, the Registrant filed
a Rule 24f-2 Notice for the fiscal year ended November 30, 1996.
==================
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THOMPSON PLUMB FUNDS, INC.
_____________________________
CROSS REFERENCE SHEET
_____________________________
FORM N-1A
PART A
ITEM NUMBERS PROSPECTUS CAPTION
- ------------ ------------------
1. ............... Outside Front Cover Page
2. ............... Expense Information
3. ............... Financial Highlights; Other Information -
Performance Information
4. ............... Outside Front Cover Page; General Information
5. ............... General Information; Management of the Funds
5A. ............... Not applicable. See Annual Report to
Shareholders
6. ............... Dividends, Distributions and Taxes;
Description of Shares; Other Information -
Shareholder Statements, Reports and Inquiries
7. ............... Purchase and Redemption of Shares;
Determination of Net Asset Value; Other
Information-Retirement Plans
8. ............... Purchase and Redemption of Shares;
Determination of Net Asset Value
9. ............... Not applicable.
<PAGE> 3
FORM N-1A
PART A STATEMENT OF ADDITIONAL
ITEM NUMBERS INFORMATION CAPTION
- ------------ -----------------------
10. ............... Cover Page
11. ............... Cover Page
12. ............... Cover Page
13. ............... Description of Certain Investments and
Transactions; Investment Restrictions
14. ............... Management
15. ............... Management; Other Information
16. ............... Management; Advisory and Administrative
Services
17. ............... Portfolio Transactions and Brokerage
18. ............... Determination of Net Asset Value and
Pricing Considerations; Taxes
19. ............... Determination of Net Asset Value and
Pricing Considerations
20. ............... Taxes
21. ............... Not Applicable
22. ............... Fund Performance
23. ............... Financial Statements
-3-
<PAGE> 4
Thompson Plumb Funds, Inc.
Prospectus
MARCH 31, 1997
THOMPSON PLUMB FUNDS, INC.
8201 Excelsior Drive, Suite 200
Madison, Wisconsin 53717
Telephone: (608) 831-1300
THOMPSON PLUMB FUNDS, INC. offers a series of separate mutual funds, each
with its own investment objective:
THOMPSON PLUMB BALANCED FUND
This Fund (the "Balanced Fund") seeks to realize a combination of income
and capital appreciation, which will result in the highest total return while
assuming reasonable risk. The Balanced Fund invests in a diversified portfolio
of common stocks and fixed income securities.
THOMPSON PLUMB BOND FUND
This Fund (the "Bond Fund") seeks a high level of current income while at
the same time preserving investment capital. The Bond Fund invests primarily
in a diversified portfolio of investment-grade debt securities.
THOMPSON PLUMB GROWTH FUND
This Fund (the "Growth Fund") seeks a high level of long-term growth
primarily through capital appreciation, while at the same time assuming
reasonable risk. The Growth Fund invests primarily in a diversified portfolio
of common stocks and securities convertible into common stocks. Although
current income is not a primary objective of the Growth Fund, the Fund
anticipates that capital growth will be accompanied by growth through dividend
income.
The Funds are managed by Thompson, Plumb & Associates, Inc. (the
"Advisor"). See "Management of the Funds." They are offered directly to
investors, without a sales charge. See "Purchase and Redemption of Shares."
This Prospectus sets forth concisely the information about each of the
Funds that a prospective investor should know before investing. Investors
should read and retain this Prospectus for future reference. Additional
information about the Funds has been filed with the Securities and Exchange
Commission in the form of a Statement of Additional Information, dated March
31, 1997. Copies of the Statement of Additional Information, which is
incorporated herein by reference in its entirety, will be provided without
charge upon written request to the attention of the Corporate Secretary of the
Advisor at 8201 Excelsior Drive, Suite 200, Madison, Wisconsin 53717, or by
calling the Advisor's offices at 608-831-1300.
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.
<PAGE> 5
Prospectus
TABLE OF CONTENTS
Page No.
-------
EXPENSE INFORMATION ............................................ 3
FINANCIAL HIGHLIGHTS 4 Thompson Plumb Balanced Fund ............ 4
Thompson Plumb Bond Fund .................................... 5
Thompson Plumb Growth Fund .................................. 6
GENERAL INFORMATION ............................................ 7
INVESTMENT OBJECTIVES AND POLICIES OF THE FUNDS ................ 7
Thompson Plumb Balanced Fund ................................ 7
Thompson Plumb Bond Fund .................................... 8
Thompson Plumb Growth Fund .................................. 9
OTHER INVESTMENT FACTORS REGARDING THE FUNDS ................... 9
Common Stocks ............................................... 9
Fixed Income Securities ..................................... 9
Short-Term Instruments ...................................... 10
Portfolio Turnover .......................................... 10
Investment Restrictions ..................................... 11
Other Factors ............................................... 11
MANAGEMENT OF THE FUNDS ........................................ 11
PURCHASE AND REDEMPTION OF SHARES .............................. 13
General ..................................................... 13
Purchases ................................................... 13
Automatic Investment Plan. 14
Systematic Withdrawal Plan 14
Exchange Privilege .......................................... 14
Automatic Exchange Plan ..................................... 14
Exchange by Telephone ....................................... 15
Availability of Money Market Fund ........................... 15
Redemptions ................................................. 15
DETERMINATION OF NET ASSET VALUE ............................... 17
DIVIDENDS, DISTRIBUTIONS AND TAXES ............................. 17
General ..................................................... 17
Other Information ........................................... 17
DESCRIPTION OF SHARES .......................................... 18
OTHER INFORMATION .............................................. 18
Transfer and Dividend Disbursing Agent and Custodian ........ 18
Shareholder Statements, Reports and Inquiries ............... 18
Retirement Plans ............................................ 18
Performance Information ..................................... 19
Portfolio Transactions and Brokerage ........................ 19
2
<PAGE> 6
EXPENSE INFORMATION
<TABLE>
<CAPTION>
BALANCED BOND GROWTH
FUND FUND FUND
-------- ----- ------
<S> <C> <C> <C>
Shareholder Transaction Expenses:
- ------------------------------------------
Sales Load Imposed on Purchases None None None
Sales Load Imposed on Reinvested Dividends None None None
Redemption Fees(1) None None None
Exchange Fee (between the Funds)(1) None None None
Annual Fund Operating Expenses:
- ------------------------------------------
(As a percentage of average net assets)(2)
Management Fees .85% .65% 1.00%
12b-1 Fees None None None
Other Expenses(3) .60% .48% .58%
TOTAL FUND OPERATING EXPENSES(3) 1.45% 1.13% 1.58%
</TABLE>
(1) The Funds' transfer agent charges a wire fee for the return of redemption
proceeds requested by wire transfer. The fee is currently $12.00. The Funds'
transfer agent charges a fee for telephone exchanges. That fee is currently
$5.00. The Funds' Advisor may absorb the fee for broker-dealer accounts.
(2) Annual fund operating expenses for the Funds are based on amounts incurred
during the fiscal year ended November 30, 1996.
(3) The Advisor currently intends to voluntarily reimburse the Bond and Growth
Funds for all expenses they incur on an annual basis in excess of 1.15% and
1.80%, respectively, of average daily net assets. Voluntary reimbursement may
be modified or discontinued by the Advisor at any time.
Example: A $1,000 investment would result in the incurrence of the
following Fund expenses, assuming a 5% annual return and redemption at the
end of each time period.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Balanced Fund $15 $46 $79 $174
Bond Fund $12 $36 $62 $137
Growth Fund $16 $50 $86 $188
</TABLE>
The purpose of this expense information is to assist the investor in
understanding the various costs and expenses that the investor will bear
directly or indirectly in any of the Funds. For more detailed information
concerning these expenses, see "Management of the Funds." The above examples
should not be considered a representation of past or future expenses. Actual
expenses may be greater or less than those shown.
3
<PAGE> 7
FINANCIAL HIGHLIGHTS
The following financial information for the Funds for the periods
indicated has been examined by Price Waterhouse LLP, independent accountants,
as indicated in their report incorporated by reference into the Statement of
Additional Information from the annual report to shareholders for the fiscal
year ended November 30, 1996. This information should be read in conjunction
with the financial statements and related notes appearing in the annual report.
The annual report contains additional performance information and may be
obtained upon request and without charge by writing or calling the Advisor.
<TABLE>
<CAPTION>
Year Ended November 30,
------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 (d)
------ ------ ------ ------ ------- ------ ------ ----- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balanced Fund
Per Share Data:
Net Asset Value, Beginning of Period $14.23 $13.55 $14.17 $14.57 $13.50 $11.69 $11.87 $10.06 $ 8.45 $10.00
Income from Investment Operations
Net investment income 0.19 0.24 0.27 0.28 0.30 0.27 0.27 0.30 0.19 0.09
Net realized and unrealized gains
(losses) on investments 3.21 2.26 0.04 0.15 1.16 1.83 (0.14) 1.72 1.51 (1.64)
----- ------ ------ ------ ------- ------ ------ ----- ----- ------
Total from Investment Operations 3.40 2.50 0.31 0.43 1.46 2.10 0.13 2.02 1.70 (1.55)
Less Distributions
Dividends from net investment income (0.23) (0.28) (0.27) (0.28) (0.28) (0.29) (0.31) (0.21) (0.09) -
Distributions from capital gains (0.86) (1.54) (0.66) (0.55) (0.11) - - - - -
----- ------ ------ ------ ------- ------ ------ ----- ----- ------
Total Distributions (1.09) (1.82) (0.93) (0.83) (0.39) (0.29) (0.31) (0.21) (0.09) -
Net Asset Value, End of Period $16.54 $14.23 $13.55 $14.17 $14.57 $13.50 $11.69 $11.87 $10.06 $ 8.45
----- ------ ------ ------ ------- ------ ------ ----- ----- ------
Total Return 25.80% 21.02% 2.15% 3.02% 10.91% 18.35% 1.18% 20.46% 20.28% (15.50%)(a)
Ratios/Supplemental Data:
Net assets, end of period (millions) $20.8 $ 18.1 $ 17.2 $ 21.5 $ 20.9 $ 18.1 $ 11.4 $ 9.0 $ 6.4 $ 4.4
Ratio of expenses to average net assets 1.45% 1.49% 1.42% 1.40% 1.48% 1.64% 1.84% 2.00% 2.00%(c) 2.00%(b)(c)
Ratio of net income to average net assets 1.32% 1.71% 1.84% 1.89% 2.14% 2.46% 2.49% 2.95% 2.15%(c) 1.93%(b)(c)
Portfolio turnover rate 134.82% 111.16% 110.01% 91.77% 52.75% 48.46% 56.86% 55.69% 80.96% 114.06%
Average commission rate paid $0.0745 - - - - - - - - -
</TABLE>
(a) Calculated on a non-annualized basis.
(b) Calculated on an annualized basis.
(c) Computed after giving effect to Advisor's expense reimbursement as follows:
<TABLE>
<CAPTION>
1988 1987 (d)
---- --------
<S> <C> <C>
Advisor's expense reimbursement $13,977 $4,994
Ratio of expenses to average net assets without reimbursement 2.2% 2.2%(b)
Ratio of net income to average net assets without reimbursement 1.9% 1.7%(b)
</TABLE>
(d) For the period March 16, 1987 (commencement of operations) through
November 30, 1987.
4
<PAGE> 8
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------
1996 1995 1994 1993 1992(d)
---- ---- ---- ---- -------
BOND FUND
<S> <C> <C> <C> <C> <C>
Per Share Data:
Net Asset Value, Beginning of Period $ 10.67 $ 9.88 $ 10.78 $ 10.33 $ 10.00
Income from Investment Operations
Net investment income 0.52 0.57 0.48 0.45 0.20
Net realized and unrealized gains (losses) on investments (0.07) 0.78 (0.78) 0.44 0.28
------- ------- ------- ------- -------
Total from Investment Operations 0.45 1.35 (0.30) 0.89 0.48
Less Distributions
Dividends from net investment income (0.53) (0.56) (0.47) (0.42) (0.15)
------- ------- ------- ------- -------
Distributions from capital gains - - (0.13) (0.02) -
Total Distributions (0.53) (0.56) (0.60) (0.44) (0.15)
Net Asset Value, End of Period $ 10.59 $10.67 $ 9.88 $ 10.78 $ 10.33
------- ------- ------- ------- -------
Total Return 4.51% 14.06% (2.96%) 8.74% 4.80%(a)
Ratios/Supplemental Data:
Net assets, end of period (millions) $ 22.2 $ 14.9 $ 10.2 $ 6.2 $ 3.9
Ratio of expenses to average net assets 1.13% 1.13%(c) 1.00%(c) 1.00%(c) 1.15%(b)(c)
Ratio of net income to average net assets 5.48% 5.70%(c) 4.83%(c) 4.44%(c) 4.36%(b)(c)
Portfolio turnover rate 104.43% 111.95% 165.74% 111.18% 227.03%
</TABLE>
(a) Calculated on a non-annualized basis.
(b) Calculated on an annualized basis.
(c) Computed after giving effect to Advisor's expense reimbursement as follows:
<TABLE>
<CAPTION>
1995 1994 1993 1992 (d)
---- ---- ---- -------
<S> <C> <C> <C> <C>
Advisor's expense reimbursement $25,775 $46,412 $39,759 $20,582
Ratio of expenses to average net assets without reimbursement 1.34% 1.48% 1.76% 2.36%(b)
Ratio of net income to average net assets without reimbursement 5.49% 4.34% 3.68% 3.13%(b)
</TABLE>
(d) For the period February 10, 1992 (commencement of operations) through
November 30, 1992.
5
<PAGE> 9
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
Year Ended November 30,
-------------------------------------
1996 1995 1994 1993 1992 (d)
---- ---- ---- ---- -------
GROWTH FUND
<S> <C> <C> <C> <C> <C>
Per Share Data:
Net Asset Value, Beginning of Period $24.74 $20.43 $20.47 $20.37 $20.00
Income from Investment Operations
Net investment loss (0.06) (0.05) (0.20) (0.12) (0.05)
Net realized and unrealized gains on investments 8.66 6.22 0.16 0.22 0.42
------ ------ ------ ------ ------
Total from Investment Operations 8.60 6.17 (0.04) 0.10 0.37
Less Distributions
Dividends from net investment income - - - - -
------ ------ ------ ------ ------
Distributions from capital gains (0.55) (1.86) - - -
Total Distributions (0.55) (1.86) - - -
Net Asset Value, End of Period $32.79 $24.74 $20.43 $20.47 $20.37
------ ------ ------ ------ ------
Total Return 35.52% 32.87% (0.19%) 0.49% 1.85%(a)
Ratios/Supplemental Data:
Net assets, end of period (millions) $ 24.1 $ 12.6 $ 4.7 $ 7.1 $ 7.4
Ratio of expenses to average net assets 1.58% 2.00% 2.00%(c) 1.93% 2.00%(b)(c)
Ratio of net income to average net assets (0.27%) (0.31%) (0.49%)(c) (0.54%) (0.40%)(b)(c)
Portfolio turnover rate 101.91% 86.68% 116.69% 98.93% 43.23%
Average commission rate paid $0.0858 - - - -
</TABLE>
(a) Calculated on a non-annualized basis.
(b) Calculated on an annualized basis.
(c) Computed after giving effect to Advisor's expense reimbursement as follows:
<TABLE>
<CAPTION>
1994 1992(d)
---- -------
<S> <C> <C>
Advisor's expense reimbursement $16,467 $2,638
Ratio of expenses to average net assets without reimbursement 2.31% 2.05%(b)
Ratio of net income to average net assets without reimbursement (0.80%) (0.46%)(b)
</TABLE>
(d) For the period February 10, 1992 (commencement of operations) through
November 30, 1992.
6
<PAGE> 10
GENERAL INFORMATION
Thompson Plumb Funds, Inc. is a Wisconsin corporation incorporated in 1986
and registered as an open-end, diversified management investment company under
the Investment Company Act of 1940 (the "1940 Act"). This prospectus relates
to the following three separate Funds:
THOMPSON PLUMB BALANCED FUND
THOMPSON PLUMB BOND FUND
THOMPSON PLUMB GROWTH FUND
Each Fund obtains its assets by continuously offering and selling its
shares to the public. Proceeds from such sales are invested by the Fund in
securities of different companies or governmental entities. Each Fund provides
its investors with diversification by investing in the securities of many
different companies in a variety of industries or governmental entities, and
furnishes its investors with experienced management to select and watch over
the Fund's investments. As open-end mutual funds, each Fund will redeem any of
its outstanding shares on demand of the owner at their net asset value. See
"Purchase and Redemption of Shares." Because the Funds invest in stocks and
bonds, the value of shares in the Funds will rise and fall according to market
conditions and over time may be more or less than the price initially paid by
the investor.
As the Advisor, Thompson, Plumb & Associates, Inc. is responsible for
evaluating and selecting the securities held by the Funds and will use its
professional expertise and experience in an effort to ensure that the Funds'
objectives will be met, although there can be no assurance of their success.
See "Management of the Funds."
Each of the Funds is 100% no-load. This means that investors pay no fees
to purchase, exchange or redeem shares, nor any 12b-1 distribution expenses.
Lower asset based charges benefit investors by increasing each Fund's
investment return.
INVESTMENT OBJECTIVES AND POLICIES
OF THE FUNDS
THOMPSON PLUMB BALANCED FUND
The Balanced Fund seeks to realize a combination of income and capital
appreciation which will result in highest total return, while assuming
reasonable risk. The Balanced Fund invests in a diversified portfolio of
common stocks and fixed income securities.
The Advisor will invest in securities that, in its judgment, will result
in the highest total return consistent with preservation of principal, and will
vary the mix of common stocks and bonds from time to time in accordance with
its assessment of economic conditions and investment opportunities. It is
anticipated that a major portion of the Balanced Fund's assets will be invested
at all times in common stocks. As of November 30, 1996, approximately 73% of
the total market value of the Balanced Fund's securities portfolio consisted of
common stocks. The Advisor invests in common stocks that it believes are
undervalued relative to the company's future growth prospects. The Advisor
believes characteristics that typify corporations with such future growth
prospects include quality balance sheets, strong management, high return on
assets and potential for earnings growth.
The Balanced Fund will also invest a significant portion of its assets in
fixed income securities, including corporate notes, bonds and debentures,
short-term money market instruments, debt securities issued or guaranteed by
the United States Government or by its agencies or instrumentalities,
convertible debt securities and preferred stock that is convertible into common
stocks. Ordinarily at least 25% of the total assets of the Balanced Fund will
be invested in such fixed income senior securities. For purposes of this
calculation, only that portion of the market value of the Balanced Fund's
convertible fixed income securities which is attributable to their fixed income
characteristics will be used in determining whether the Fund has maintained
this 25% minimum. Should the Advisor determine, based on its assessment of
prevailing market conditions, that fixed income securities provide the most
effective means for achieving the Balanced Fund's investment objective, it may
elect to temporarily invest all of the Fund's assets in such fixed income
securities. In determining whether the Balanced Fund should shift its emphasis
from common stocks to fixed income securities, the Advisor will assess
anticipated future changes in interest rates and the outlook for common stocks
generally.
The debt securities in which the Balanced Fund invests are generally the
same as those in which the Bond Fund invests. For a more detailed description
of
7
<PAGE> 11
the various kinds and characteristics of such debt securities, see "Thompson
Plumb Bond Fund" below. For a description of quality limitations and other
policies of the Balanced Fund with respect to investing in debt securities, see
"Other Investment Factors Regarding the Funds - Fixed Income Securities."
Under market conditions that, in the judgment of the Advisor, expose the
Balanced Fund to a decline in net asset value, the Balanced Fund may
temporarily invest in short-term money market instruments for defensive
purposes. Such conditions may include declines, or anticipated declines, in
stock prices which are generally accompanied with marked increases in interest
rates (thereby causing longer term fixed income securities to decline
substantially in value). There is no limit on the portion of the assets of the
Balanced Fund which may be invested in short-term money market instruments for
such defensive purposes. The Balanced Fund may also purchase such short-term
money market instruments for investment of idle cash balances. For a
description of such short-term instruments and quality limitations and other
policies of the Balanced Fund with respect to investing in such instruments,
see "Other Investment Factors Regarding the Funds - Short-Term Instruments."
THOMPSON PLUMB BOND FUND
The Bond Fund seeks a high level of current income, while at the same time
preserving investment capital. The Bond Fund invests primarily in a
diversified portfolio of investment-grade debt securities. Such securities
include the following types:
(1) Debt securities of domestic issuers, and of foreign issuers payable in
United States dollars, rated at the time of purchase within the four
highest grades by either Standard & Poor's Ratings Services ("S&P") or
Moody's Investors Service, Inc. ("Moody's") (a description of these
ratings is contained in the Statement of Additional Information);
(2) Securities issued or guaranteed by the United States Government or its
agencies or instrumentalities, including mortgage-related securities
issued or guaranteed by the United States Government, its agencies or
instrumentalities, such as GNMA certificates;
(3) Mortgage-related securities issued or guaranteed by private issuers and
guarantors equivalent to the quality standards of item (1);
(4) Commercial paper rated within the two highest categories for commercial
paper or short-term debt securities by either S&P or Moody's at the time
of purchase;
(5) Obligations of banks and thrifts whose deposits are insured by the FDIC;
and
(6) Short-term corporate obligations, including variable rate demand notes if
the issuer has commercial paper or short-term debt securities rated within
the two highest categories by either S&P or Moody's at the time of
purchase. For a description of variable rate demand notes and an
explanation of how they differ from commercial paper, see "Other
Investment Factors Regarding the Funds - Short-Term Instruments."
Under normal circumstances, at least 65% of the Bond Fund's total assets
will be invested in the bonds described in (1) and (2) above. Although there
are no restrictions on the maturity of securities in which the Bond Fund may
invest, it is anticipated that during normal market conditions, the dollar
weighted average portfolio maturity of the Fund will not exceed 10 years. In
calculating average maturity, the stated final maturity date of a security is
used, unless it is probable that the issuer will shorten the maturity, in which
case the date on which it is probable that the issuer will call, refund or
redeem the security is used. The Bond Fund will not purchase securities with a
view to rapid turnover.
Securities issued by the U.S. Government, its agencies or
instrumentalities, may vary in terms of the degree of support afforded by the
Government. Some of such securities may be supported by the full faith and
credit of the U.S. Treasury, such as U.S. Treasury bills, notes and bonds and
GNMA certificates. Some agency securities are supported by the agency's right
to borrow from the U.S. Treasury under certain circumstances, such as those
issued by the Federal Farm Credit Bank. Still others are supported by the
credit of the agency that issued them, such as those issued by the Student Loan
Marketing Association. It is anticipated that the Bond Fund's investments in
8
<PAGE> 12
Government securities will primarily consist of those supported by the full
faith and credit of the United States Treasury.
The value of the Bond Fund's securities is subject to the effects of
changes in prevailing interest rates. See "Other Investment Factors Regarding
the Funds - Fixed Income Securities."
THOMPSON PLUMB GROWTH FUND
The Growth Fund seeks a high level of long-term growth primarily through
capital appreciation, while at the same time assuming reasonable risk. The
Growth Fund invests primarily in a diversified portfolio of common stocks and
securities convertible into common stocks. Although current income is not a
primary objective of the Growth Fund, the Fund anticipates that capital growth
will be accompanied by growth through dividend income. The term "reasonable
risk" refers to the Advisor's judgment that investments in certain common
stocks would not present a greater than normal risk of loss in light of current
and reasonably anticipated future general market and economic conditions,
trends in dividend yields and interest rates, and fiscal and monetary policies.
Any assets not invested in common stocks and securities convertible into
common stocks will be invested in income producing short-term instruments as a
reserve for future purchases of securities. The Advisor will seek to identify
investment opportunities in equity securities of companies which it believes
have above average potential for earnings and dividend growth. Generally, the
Advisor's analysis will consider a company's financial history and condition,
strength of management and position within its industry.
The Growth Fund may also invest in convertible preferred and convertible
fixed income securities. The Advisor intends generally to limit the Growth
Fund's purchase of these securities to those which are rated in one of the top
four rating categories by S&P or Moody's. A description of the ratings used by
the rating services noted above is contained in the Statement of Additional
Information.
The Growth Fund may also, from time to time, invest in short-term, fixed
income securities. Under ordinary circumstances, it is not anticipated that
more than 10% of the Growth Fund's total assets will be invested in such
short-term, fixed income securities. However, if deemed desirable for
defensive purposes, the Growth Fund may invest up to 25% of its assets in such
securities. For a discussion of special considerations with respect to
investing in short-term instruments, see "Other Investment Factors Regarding
the Funds - Short-Term Instruments."
OTHER INVESTMENT FACTORS REGARDING
THE FUNDS
COMMON STOCKS
Both the Balanced Fund and Growth Fund invest in common stocks and
securities convertible into common stocks. A portion of those investments may
be in companies that have market capitalizations of under $200 million and
which may be traded only in the over-the-counter market. The Advisor believes
that such smaller companies often may be undervalued in the marketplace and
therefore carry a greater potential for capital appreciation. The market for
common stocks tends to be cyclical, with periods when stock prices generally
rise and periods when stock prices generally decline. The market values of
stocks of smaller companies may be subject to greater fluctuation than the
market in general and may have less market liquidity than equity securities of
larger companies. The Advisor does not intend to purchase smaller company
securities for the Balanced or Growth Funds if, at the time of purchase, the
aggregate investment in all such securities would exceed one-third of the total
market value of the respective Fund's portfolio. the Advisor believes that its
policies of issuer and industry diversification, together with its strategic
investment in money market instruments and other fixed income securities, can
limit the volatility of investments in these smaller companies. Investors in
the Balanced and Growth Funds should consider their holdings in those Funds to
be long-term investments.
FIXED INCOME SECURITIES
The total return realized on the Bond Fund and the fixed income portion of
the securities portfolio of the Balanced Fund will consist of the change in the
net asset value per share of those Funds attributable to the fixed income
securities, together with the per share income generated by those securities.
The net asset value of the fixed income securities held by those Funds will be
affected primarily by changes in interest rates, average maturities and the
investment and credit quality of the fixed income securities.
A bond's yield reflects the fixed annual interest as a
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<PAGE> 13
percent of its current price. This price (the bond's market value) must
increase or decrease in order to adjust the bond's yield to current interest
rate levels. Therefore, bond prices generally move in the opposite direction
of interest rates. As a result, interest rate fluctuations will affect the net
asset values of the Balanced and Bond Funds, but will not affect the income
received by those Funds from their existing portfolio of fixed income
securities. However, changes in prevailing interest rates will affect the
yield on shares subsequently issued by those Funds. such fluctuations also
affect the income received on any variable rate demand notes or other variable
rate securities held in the Funds' portfolios. Because yields on fixed income
securities available for purchase by these Funds will vary over time, no
specific yield on the fixed income portion of the portfolios of those Funds can
be assured. Total returns on fixed income securities tend to fluctuate in a
wider range than the fluctuation in interest rates since gain or loss in the
market value of those securities is combined with interest derived from those
securities to calculate total return.
Movements in interest rates typically have a greater effect on the prices
of longer term bonds than on those with shorter maturities. The Advisor will
actively manage the portfolio maturity of the Balanced and Bond Funds,
consistent with their respective investment objectives, according to the
Advisor's assessment of the interest rate outlook. During periods of rising
interest rates, the Advisor will likely attempt to shorten the average maturity
of the portfolio to cushion the effect of falling bond prices on the Funds'
share prices. When interest rates are falling and bond prices are increasing,
on the other hand, the Advisor will likely seek to lengthen the average
maturity.
In order to protect against loss, each Fund has adopted policies with
respect to the quality of fixed income securities in which it may invest.
Those policies rely in part on ratings assigned to such securities, or to other
debt securities of the issuer, by S&P or Moody's, two of the most widely known
national securities rating services. A description of the rating systems used
by S&P and Moody's is included in the Statement of Additional Information under
"Description of Ratings of Certain Fixed Income Securities." The minimal
rating standards adopted by each Fund with respect to specific fixed income
securities are described above under the discussion of the particular Fund's
investment objectives and policies. See "Investment Objectives and Policies of
the Funds." Securities rated in the fourth highest rating category may have
speculative characteristics and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case with securities rated in a higher
category. In the event a debt security held in a Fund's portfolio is
downgraded to a rating below the lowest category permitted by the Fund's
policy, the Advisor will consider this fact together with other relevant
factors in determining whether to continue to hold the security. However,
downgrading alone will not require the sale of the security.
SHORT-TERM INSTRUMENTS
Short-term instruments in which the Funds may invest include United States
Treasury Bills, short-term instruments issued by agencies or instrumentalities
of the United States, commercial paper, variable rate demand notes, bank
certificates of deposit, and units of money market mutual funds. A variable
rate demand note differs from ordinary commercial paper in that it is issued
pursuant to a written agreement between the issuer and the holder, its amount
may from time to time be increased by the holder (subject to an agreed
maximum), or decreased by the holder or the issuer, and the rate of interest
payable on the security varies with an agreed formula. Transfer of such notes
is usually restricted by the issuer, and there is no secondary trading market
for such notes. The Funds will purchase such variable rate demand notes only
if, at the time of purchase, the issuer has commercial paper or short-term debt
securities rated within the two highest categories by either S&P or Moody's.
To the extent the Funds invest in units of money market mutual funds,
administrative fees and other operating expenses incurred by those funds would
be duplicative of those incurred by the Funds, and would reduce the return
received by the Funds on assets so invested. Minimum rating standards adopted
by each of the Funds with respect to investing in other short-term instruments
are described under "Investment Objectives and Policies of the Funds."
PORTFOLIO TURNOVER
Generally, the Funds do not intend to purchase securities for short-term
trading, however, when circumstances warrant, securities may be sold without
regard to the length of time held. A high turnover rate
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<PAGE> 14
may increase transaction costs and may affect taxes paid by shareholders to the
extent gains are distributed. The portfolio turnover rates for the fiscal
years ended November 30, 1996 and 1995 were 134.82% and 111.16%, respectively,
for the Balanced Fund, 104.43% and 111.95%, respectively, for the Bond Fund,
and 101.91% and 86.68%, respectively, for the Growth Fund.
INVESTMENT RESTRICTIONS
Except as discussed below, the investment objectives, policies and
programs of the Funds discussed in this Prospectus may be changed by the Board
of Directors without shareholder approval. Although the Directors have no
present plans to change the investment objective of any of the Funds, if the
investment objective of any Fund were to be changed it may be different from
that which was deemed appropriate by the shareholder at the time of the
investment.
The Funds are subject to additional investment restrictions which may not
be changed without the vote of a majority of the outstanding shares of the
affected Fund. Among other things, these restrictions prohibit the Funds from
concentrating investments in a single industry or purchasing securities of an
issuer if, as a result, more than 5% of the Fund's total assets would be
invested in that issuer, except that up to 25% of a Fund's assets may be
invested without regard to this limitation and provided that this limitation
does not apply to securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. No Fund may purchase the securities of issuers
conducting their principal business activity in the same industry if,
immediately following such purchase, the value of the Fund's investments in
such industry would exceed 25% of the value of its total assets, provided that
there is no limitation with respect to or arising out of investments in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
Each Fund may borrow money, but only: (a) as a temporary measure, and
then only in amounts not exceeding 5% of the value of the Fund's total assets;
or (b) from banks, provided that, immediately after any such borrowing, the
total of all borrowings of the Fund does not exceed one-third of the Fund's
total assets. The Funds may not employ this borrowing authority for investment
leverage purposes, but may use it only for extraordinary or emergency purposes
and to facilitate management of the Funds' portfolios by enabling them to meet
redemption requests when the liquidation of portfolio securities is deemed to
be disadvantageous or impossible. While each Fund may borrow an aggregate
amount in excess of 5% of its total assets, no Fund may make any purchases of
portfolio securities at a time when the aggregate of its borrowings exceeds
that amount. If, due to market fluctuations or other reasons, the net assets
of a Fund fall below 300% of its borrowings, the Fund will promptly reduce its
borrowings in accordance with the requirements and procedures set forth in the
1940 Act. This may require the Fund to sell a portion of its portfolio
securities at a time when it may be disadvantageous to do so. Interest
incurred on borrowings will be an expense of the Fund. Each Fund may also
mortgage or pledge its assets to secure permitted borrowings.
In addition to the foregoing powers and restrictions, the Funds have
adopted other restrictions in order to comply with the securities laws of
various states. For a more complete description of the investment restrictions
summarized above and other investment restrictions to which the Funds are
subject, see "Investment Restrictions" in the Statement of Additional
Information.
OTHER FACTORS
Additional information regarding repurchase agreements, when-issued
transactions and lending of portfolio securities is contained in the Statement
of Additional Information.
MANAGEMENT OF THE FUNDS
The business and affairs of the Funds are managed by the Board of
Directors of Thompson Plumb Funds, Inc. Thompson, Plumb & Associates, Inc.,
8201 Excelsior Drive, Suite 200, Madison, Wisconsin, acts as the investment
advisor to, and administrator of, each of the Funds. Since commencing
operations in 1984, the Advisor has been the investment advisor to individuals
and institutional clients with substantial investment portfolios, with
approximately $478 million in assets under management as of December 31, 1996.
John W. Thompson and Thomas G. Plumb, who have considerable investment
management experience, each own 50% of the outstanding shares of the Advisor.
For biographical information on these individuals, see "Management" in the
Statement of Additional Information. The Advisor does not currently serve as
an investment advisor to any investment companies other than Thompson Plumb
Funds, Inc.
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<PAGE> 15
Pursuant to an Investment Advisory Agreement between the Advisor and the
Funds, the Advisor manages the investment and reinvestment of the Funds'
assets, provides the Funds with personnel, facilities and administrative
services, and supervises the Funds' daily business affairs, all subject to the
supervision of the Board of Directors. The Advisor formulates and implements a
continuous investment program for each Fund consistent with its investment
objective, policies and restrictions.
The Advisor provides office space and executive and other personnel to the
Funds. In addition to the investment advisory fees, each Fund incurs the
following expenses: legal, auditing and accounting expenses, directors' fees
and expenses, insurance premiums, brokers' commissions, taxes and governmental
fees, expenses of issuing and redeeming shares, organizational expenses,
expenses of registering or qualifying shares for sale, postage and printing for
reports and notices to shareholders, fees and disbursements of the custodian,
transfer agent, certain expenses with respect to membership fees of industry
associations and any extraordinary expenses, such as litigation expenses.
As compensation for the services rendered to the Fund and the assumption
by the Advisor of certain related expenses, each Fund pays to the Advisor an
investment advisory fee computed daily and payable monthly at an annual rate as
follows: (i) for the Balanced Fund, 0.85 of 1% of the first $50 million of
average daily net assets and 0.80 of 1% of average daily net assets in excess
of $50 million; (ii) for the Bond Fund, 0.65 of 1% of the first $50 million of
average daily net assets and 0.60 of 1% of average daily net assets in excess
of $50 million; and (iii) for the Growth Fund, 1.00% of the first $50 million
of average daily net assets and 0.90 of 1% of average daily net assets in
excess of $50 million. For the fiscal year ended November 30, 1996, the
Balanced, Bond and Growth Funds paid the Advisor investment advisory fees at
the annual rate of 0.85%, 0.65%, and 1.00%, respectively, of average daily net
assets. The investment advisory fees paid by the Balanced Fund and the Growth
Fund are higher than those paid by most other investment companies. The
expenses assumed by the Advisor exclude the cost(s) (including taxes and
brokerage commissions, if any) of securities purchased for the Funds and the
cost of preparation of tax returns, the preparation and submission of reports
to shareholders, the periodic updating of this Prospectus and the Statement of
Additional Information and the preparation of reports filed with the Securities
and Exchange Commission and other regulatory authorities.
The Advisor also provides accounting services to the Funds pursuant to its
Accounting Services Agreement with Thompson Plumb Funds, Inc. Pursuant to the
Accounting Services Agreement, the Advisor provides each Fund with accounting
and bookkeeping services and performs per share net asset value calculations.
For these services and the Advisor's assumption of certain related expenses,
each Fund pays the Advisor a fee computed daily and payable monthly at the
annual rate of 0.20 of 1% of net assets up to $30 million and 0.125 of 1% of
net assets in excess of $30 million, with a minimum fee of $30,000 per year.
For the fiscal year ended November 30, 1996, this fee for the Balanced Fund,
Bond Fund and Growth Fund amounted to $38,456, $35,457 and $34,990,
respectively. In calculating the net asset value per share, the Advisor may
use an independent pricing service to determine the value of some or all of a
Fund's portfolio securities, and, if such a service is used, the cost of such
service is borne by the Fund. See "Determination of Net Asset Value."
The Advisor intends to voluntarily reimburse the Bond and Growth Funds for
all expenses they incur on an annual basis in excess of 1.15% and 1.80%,
respectively, of average daily net assets, if necessary. Voluntary
reimbursement may be modified or discontinued by the Advisor at any time.
Thomas G. Plumb serves as portfolio manager for the Balanced Fund. He was
a co-manager of the Funds' portfolios from commencement of each Fund's
operations through mid-August 1993, when he became sole portfolio manager of
the Balanced Fund. Mr. Plumb is President, Treasurer and a Director of the
Funds and has been Vice President of the Advisor since he co-founded it in June
1984.
John W. Thompson serves as portfolio manager for the Bond and Growth
Funds. He was a co-manager of the Funds' portfolios from commencement of each
Fund's operations through mid-August 1993, when he became sole portfolio
manager of the Bond and Growth Funds. Mr. Thompson is the Chairman, Secretary
and a Director of the Funds and has been President of the Advisor since he
co-founded it in June 1984 and Treasurer of the Advisor since October 1993.
Messrs. Plumb and Thompson are both Chartered Financial Analysts.
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<PAGE> 16
PURCHASE AND REDEMPTION OF SHARES
GENERAL
Applications for the purchase of shares should be submitted on the
accompanying Account Application form, should identify the appropriate Fund(s),
and should be directed to Thompson Plumb Funds, Inc., c/o Firstar Trust
Company, Mutual Funds Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701.
If the application is transmitted by an overnight delivery service or express
mail, it should be addressed to Thompson Plumb Funds, Inc., c/o Firstar Trust
Company, Mutual Funds Services, 615 East Michigan Street, Milwaukee, Wisconsin
53202. The Funds and Firstar do not consider the U.S. Postal Service or other
independent delivery services to be their agents. Therefore, deposit in the
mail or with such services, or receipt at Firstar's post office box does not
constitute receipt by Firstar or the Funds. All purchases of shares, including
reinvestments of dividends and distributions, and all redemptions of shares
will be made in full and fractional shares rounded to the nearest thousandth
(the third decimal place).
PURCHASES
The Funds offer and sell their shares without a sales charge at the net
asset value per share next determined after the purchase order has been
received by Firstar Trust Company ("Firstar"), which serves as the transfer and
dividend disbursing agent and custodian for the Funds. See "Determination of
Net Asset Value." The Board of Directors has established $1,000 as the
minimum initial purchase in any Fund, other than for an IRA, and $100 as the
minimum for any subsequent purchase, except through dividend reinvestment or
purchases through the Funds' Automatic Investment Plan or Automatic Exchange
Plan described below.
All applications to purchase shares are subject to acceptance or rejection
by authorized officers of the Funds and are not binding until accepted.
Applications may be made by mail, overnight delivery, or wire transfer. If by
mail or overnight delivery, the application must be accompanied by a check or
money order drawn on a U.S. bank, money market fund, credit union or savings
association. Checks are accepted subject to collection at full face value in
U.S. funds. The transfer agent will charge a $20 fee against a shareholder's
account for any check written by a shareholder that is returned to the
custodian for insufficient funds.
Fund shares may also be purchased through a broker-dealer, institution or
other service provider (a "service provider") which may charge a commission or
other transaction fee. Investors should read the program materials provided by
the service provider, including information relating to fees, in conjunction
with this Prospectus. Certain features of a Fund may not be available or may
be modified in connection with the program of services provided. When shares
are purchased in this way, the service provider, rather than its customer, may
be the shareholder of record of the Fund shares, and the service provider may
be responsible for delivering fund reports and other communications to its
customers. Certain service providers may receive compensation from the Funds
or the Advisor for shareholder recordkeeping and similar services.
Investors wishing to make an initial purchase by wire transfer must take
the following three steps: (1) telephone Firstar at 1-800-499-0079 or
414-765-4124 and provide his or her account registration, address, social
security or tax identification number, the amount being wired, the name of the
wiring bank and the name and telephone number of the person to be contacted at
his or her bank in connection with the purchase; and (2) instruct his or her
bank (which must be a member of, or have a correspondent relationship with, a
member of the Federal Reserve System) to wire federal funds as follows:
FIRSTAR NATIONAL BANK
ABA NO. 0750-00022
FOR CREDIT TO FIRSTAR TRUST COMPANY
MFS ACCOUNT NO. 112-952-137
FOR FURTHER CREDIT TO (NAME OF SPECIFIC FUND)
ACCOUNT REGISTRATION (NAME(S) OF INVESTOR)
and (3) complete and mail the accompanying Account Application form to Thompson
Plumb Funds, Inc., c/o Firstar Trust Company, Mutual Fund Services, P.O. Box
701, Milwaukee, Wisconsin 53201-0701. Shareholders who wish to purchase
additional shares by wire may do so by following steps 1 and 2 of these wire
transfer instructions and, in addition, by providing his or her existing fund
account number. Wire order funds must be received in the office of Firstar
prior to 3 P.M. Central Time, in order to purchase shares on that day. Funds
received after 3 P.M. Central Time will purchase shares on the following day.
Shareholders are responsible for charges imposed by their bank for effecting
wire transfers.
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Certificates representing shares of the Funds will not be issued unless
the shareholder specifically so requests in writing. Where certificates are
not requested, Firstar will credit the shareholder's account in the appropriate
Fund with the number of shares purchased. Written confirmations are issued for
all purchases, except that transactions pursuant to Fund plans for automatic
reinvestment of dividends, monthly automatic investment or systematic
withdrawal may be confirmed quarterly. The Funds reserve the right to reject
any purchase orders.
AUTOMATIC INVESTMENT PLAN
Shareholders who wish to make regular additional investments (monthly,
bimonthly, quarterly or yearly) in amounts of $50 or more to an existing Fund
account may do so through the Funds' Automatic Investment Plan. Under this
Plan, your designated bank or other financial institution debits a
preauthorized amount to your checking or NOW account on a business day of your
choosing and applies the amount to the purchase of Fund shares. The Funds can
accommodate up to four investments per month as long as there are seven days
between investments. The Funds do not charge a fee for participating in this
Plan. To use this service, you must authorize the transfer of funds by
completing the Automatic Investment Plan Application, which may be obtained
from either the Advisor or Firstar. The Funds reserve the right to suspend,
modify or terminate the Automatic Investment Plan without notice. Shareholders
who wish to make a change to their Automatic Investment Plan may call Firstar
at 1-800-499-0079.
SYSTEMATIC WITHDRAWAL PLAN
Shareholders may elect to participate in the Funds' Systematic Withdrawal
Plan. By making this election, you can arrange for automatic withdrawals from
your Fund account into a pre-authorized bank account according to the schedule
you select which may be on a monthly basis or in certain designated months.
The Funds do not charge a fee for participating in the Systematic Withdrawal
Plan. The Systematic Withdrawal option may be in any amount you select,
subject to a $50 minimum. To begin distributions, a shareholder must have a
Fund account valued at $10,000 or more. You may elect this option
by completing the Systematic Withdrawal Plan Application which is available
from Firstar or the Advisor. Shareholders who wish to make a change to their
Systematic Withdrawal option may call Firstar or the Advisor. Normally,
shareholders should not make automatic investments in a Fund at the same time
they are receiving systematic withdrawals from that Fund because such
shareholders could realize capital gains on the systematic withdrawals from
that Fund while they are automatically investing in that Fund. The Systematic
Withdrawal Plan may be terminated at any time by written notice.
EXCHANGE PRIVILEGE
Shares of any Fund registered in the name of a shareholder for at least 15
days may be exchanged for shares of any other Fund, provided the shares of both
Funds are qualified for sale in the shareholder's state of residence. Under
the exchange privilege, each Fund offers to exchange its shares for shares of
any other Fund on the basis of relative net asset value per share. In order to
qualify for the exchange privilege without further approval of the Fund, the
shares being exchanged must have a net asset value of at least $1,000, and may
not have a net asset value in excess of $100,000. In addition, if the
shareholder holds a certificate(s) for the shares being exchanged, the
shareholder must surrender such certificate(s) in the same manner as though the
shares were being redeemed. See "Redemptions" below.
An exchange between Funds pursuant to this exchange privilege is treated
as a sale for federal income tax purposes and, depending upon the
circumstances, a short or long-term capital gain or loss may be realized.
This exchange privilege may be modified or terminated at any time upon 60
days' prior written notice. The Funds reserve the right to limit the number of
times an investor may exercise the exchange privilege. To exercise the
exchange privilege, you must either authorize telephone exchanges as described
below or obtain, complete and return an Exchange Application available from
Firstar or the Advisor.
AUTOMATIC EXCHANGE PLAN
The Funds offer an Automatic Exchange Plan pursuant to which a shareholder
may elect to make regular monthly exchanges of shares from one Fund to another
Fund. Shareholders may elect to participate by completing the Automatic
Exchange Plan Application which may be obtained from the Advisor or
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<PAGE> 18
Firstar. Accounts for each Fund must be established with at least $1,000
before automatic exchanges from or to such Funds can be made. Each exchange
will be made in a fixed amount designated by the shareholder, which must be at
least $50. Exchanges will be made on the same day designated by the
shareholder of each month at each Fund's respective net asset value per share.
Exchanges may only be made with respect to Fund accounts with identical
registrations. Like other types of exchanges, automatic exchanges constitute a
sale and purchase of shares for federal income tax purposes and, depending on
the circumstances, a short or long-term capital gain or loss may be realized.
EXCHANGE BY TELEPHONE
If you have elected on your Account Application, you can exchange shares
by phone. By doing so you assume some risks for unauthorized transactions.
The Funds and Firstar have implemented procedures designed to reasonably assure
that the telephone instructions are genuine. These procedures include
recording telephone conversations, requesting verification of information
regarding your account (social security number, account number and/or street
address) and sending a written confirmation of the transaction. If Firstar or
the Funds fail to abide by these procedures, the Funds may be liable to a
shareholder for losses he or she suffers from any resulting unauthorized
transaction(s). However, none of the Funds, the Advisor, Firstar or any of
their employees will be liable for losses suffered by a shareholder which
result from following telephone instructions reasonably believed to be
authentic after verification pursuant to these procedures. A $5.00 transaction
fee will be charged for each telephone exchange. Telephone exchanges may only
be made between identically registered accounts.
AVAILABILITY OF MONEY MARKET FUND
Shareholders may withdraw all or a portion of their investments in any
Fund and reinvest the proceeds the same day in the Portico Money Market Fund.
A shareholder who has moved an investment from any Fund to the Portico Money
Market Fund, may, at any time, move the investment back into any of the Funds.
However, use of this exchange privilege is subject to the minimum purchase and
redemption amounts set forth in the prospectus for the Portico Money Market
Fund, and is available only in states where shares of the Portico Money Market
Fund are qualified for sale. Shareholders may obtain a copy of that prospectus
from Firstar or directly from the Advisor, and are advised to read it carefully
before authorizing any investment in shares of the Portico Money Market Fund.
No charge to shareholders is imposed in connection with the use of this
exchange privilege. However, the Funds are entitled to receive a fee from the
Portico Money Market Fund for certain distribution and support services at the
annual rate of 0.20 of 1% of the average daily net asset value of the shares in
the Portico Money Market Fund that are a result of exchanges of shares of the
Funds.
The withdrawal of an investment from any of the Funds, even if the
proceeds are reinvested in the Portico Money Market Fund, is treated as a sale
for federal income tax purposes and, depending on the circumstances, a short or
long-term capital gain or loss may be realized. Therefore, before using this
exchange service, shareholders may wish to consult their own tax or other
financial consultant to determine the tax consequences of a particular
transaction. This exchange privilege may be modified or terminated at any time
upon 60 days' prior written notice.
REDEMPTIONS
The price at which shares of any Fund may be redeemed is the net asset
value per share next determined after the redemption request is received by
Firstar in proper form. See "Determination of Net Asset Value." A shareholder
may require a Fund to redeem his or her shares in whole or in part. Investors
redeeming any Fund shares through a service provider may be charged a
commission or other transaction fee.
In order to effect a redemption of shares represented by a certificate(s),
the shareholder must mail the certificate(s) to the appropriate Fund at the
appropriate address shown below. The certificate(s) must be properly endorsed
or accompanied by an instrument of transfer.
Shareholders holding shares of any Fund not represented by certificates
may redeem such shares by mailing a signed written request for redemption to
the appropriate Fund at the address shown below. A Redemption Request Form
that may be used for this purpose can be obtained from the Advisor. Any such
written request must be signed exactly as the account is registered. If the
account is owned jointly, both owners must sign.
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<PAGE> 19
Signatures on surrendered stock certificates and Redemption Request Forms
must be guaranteed by a commercial bank, a federally chartered savings and loan
association, trust company, a member firm of a national securities exchange or
other eligible signature guarantor institution, unless the redemption is for
shares with an aggregate net asset value of $25,000 or less and the proceeds
are to be sent to the registered owner(s) of the shares at the current address
for such owner(s), as reflected on Firstar's records. In addition, a signature
guarantee of each owner is required to redeem shares in the following
situations: (i) if you change ownership registration on your account; (ii)
when you want the redemption proceeds sent to a different address from that
registered on the account; (iii) if the proceeds are to be made payable to
someone other than the accounts owner(s); (iv) any redemption transmitted by
federal wire transfer to your bank; and (v) if a change of address request has
been received by the Funds or the Transfer Agent within the last 30 days. If
there is doubt as to what documents or instructions are necessary in order to
redeem shares, please write or call Firstar (telephone no. 1-800-499-0079)
prior to submitting the redemption request. No redemption will become
effective until all documents have been received in proper form by Firstar.
Redemption requests should be addressed to:
IF TRANSMITTED BY REGULAR MAIL:
Thompson Plumb Funds, Inc.
c/o Firstar Trust Company
Mutual Funds Services
P.O. Box 701
Milwaukee WI 53201-0701
IF TRANSMITTED BY OVERNIGHT SERVICE OR EXPRESS MAIL:
Thompson Plumb Funds, Inc.
c/o Firstar Trust Company
Mutual Funds Services
615 East Michigan Street
Milwaukee WI 53202
All redemptions will be processed promptly upon receipt by Firstar. The
Funds and Firstar do not consider the U.S. Postal Service or other independent
delivery services to be their agents. Therefore, deposit in the mail or with
such services, or receipt at Firstar's post office box of redemption requests
does not constitute receipt by Firstar or the Funds. Firstar will return
redemption requests that contain restrictions as to the time or date
redemptions are to be effected. Firstar will normally delay sending redemption
proceeds until the earlier of: (a) the day on which all payments for the
shares being redeemed have cleared; or (b) 15 days after payment for the shares
has been received by Firstar. Firstar will charge $20 for having to stop
payment on any redemption checks which shareholders claim they have not
received. In order to help avoid delay in the sending of redemption proceeds,
shareholders may purchase their shares by Federal Reserve or other bank wire.
The redemption price will depend on the market value of the securities in the
particular Fund's investment portfolio at the time of redemption, and may be
more or less than the cost of the shares so redeemed. Payment for shares
redeemed will be made by mail unless the shareholder indicates on the
Redemption Request Form or otherwise that payment should be made by wire or
electronic funds transfer to a designated bank account. Redemption payments
sent by wire will ordinarily be made the same day that Firstar receives a
completed redemption request and all necessary instructions and documentation.
Redemption payments sent by electronic funds transfer will ordinarily be made
within two or three days after Firstar has received a completed redemption
request and all necessary instructions and documentation. Firstar currently
deducts a $12.00 wire charge from the redemption proceeds for each wire
transfer. This charge is subject to change. No charge is imposed by Firstar on
electronic funds transfers. Shareholders will be responsible for any charges
which their bank may impose for receiving wires or electronic funds transfers.
A shareholder's account in any Fund may be terminated by the Fund if, as a
result of any transfer, exchange or redemption of shares in the account, the
aggregate net asset value per share of the remaining shares in the account
falls below $750. The Fund will notify the shareholder at least 30 days in
advance of the Fund's intention to terminate the account to allow the
shareholder an opportunity to restore the account balance to at least $750.
Upon any such termination, a check for the proceeds of redemption will be sent
to the shareholder.
The right of a shareholder to redeem shares in any Fund and the date of
payment by the Fund may be suspended for any period during which the New York
Stock Exchange is closed, other than customary week-
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ends or holidays, or trading on such Exchange is restricted as determined by
the Securities and Exchange Commission, or during any emergency, as determined
by the Securities and Exchange Commission, as a result of which it is not
reasonably practicable for the Fund to dispose of securities owned by it or
fairly to determine the value of its net assets; or for such other period as
the Securities and Exchange Commission may by order permit for the protection
of shareholders of the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund for purposes of both purchases
and redemptions of shares is calculated as of the close of trading on the New
York Stock Exchange (generally 4:00 P.M. Eastern Time) on each business day.
Net asset value per share is calculated by adding the value of all securities
and other assets of the particular Fund, subtracting the liabilities of the
Fund (including accrued expenses and dividends payable), and dividing the
remainder by the number of outstanding shares.
Portfolio securities which are traded on an exchange or in the
over-the-counter market are valued at the last sale price reported on the day
of valuation. Securities for which there are no transactions on a given day or
securities not traded on an exchange or in the over-the-counter market are
valued at the average of the most recent bid and asked prices. Portfolio
securities which are traded both on an exchange and in the over-the-counter
market are valued according to the broadest and most representative market.
Debt securities for which market quotations are not readily available may be
valued based on information supplied by independent pricing services, including
services using matrix pricing formulas and/or independent broker bid
quotations. Debt securities with remaining maturities of 60 days or less may be
valued on an amortized cost basis, which involves valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating rates on the
market value of the instrument. Any securities or other assets for which
market quotations are not readily available are valued at fair market value as
determined in good faith by the Advisor pursuant to procedures established
under the general supervision and responsibility of the Board of Directors of
Thompson Plumb Funds, Inc. Expenses and fees, including advisory fees, are
accrued daily and taken into account for the purpose of determining net asset
value per share.
DIVIDENDS, DISTRIBUTIONS AND TAXES
GENERAL
The Funds file their federal income tax returns based on a November 30
fiscal year. Each Fund intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"), and to take
all other action required so that no federal income tax will be payable by the
Fund itself. Each Fund will be treated as a separate regulated investment
company under the Code. Shareholders are provided annually with full
information on dividends and capital gains distributions for tax purposes.
Shareholders should consult their tax advisers regarding the applicability of
state and local taxes to dividends and distributions.
All income, dividends and capital gains distributions are reinvested in
full and fractional shares of a Fund at net asset value, without a sales
charge, on a payment date, unless a shareholder has requested payment in cash
on the Account Application or by separate written request. A shareholder may
at any time change his or her election as to whether to receive distributions
in cash or have them reinvested by giving written notice of such change of
election to the appropriate Fund, or by calling 1-800-499-0079.
The Balanced and Growth Funds intend annually to distribute substantially
all of their net investment income and any net realized capital gains. The
Bond Fund expects to distribute to shareholders all of its net investment
income in quarterly dividends and net realized capital gains, if any, annually.
The dividends from net investment income and short-term capital gains of each
of these Funds are taxable as ordinary income to shareholders whether paid in
additional shares or in cash. Any long-term capital gains distributed to
shareholders are treated as such by the shareholders, whether received in cash
or in additional shares, regardless of the length of time a shareholder has
owned the shares. A portion of each Fund's dividends may qualify for the
dividends received deduction for corporations.
OTHER INFORMATION
The Funds are required by federal law to withhold 31% of the reportable
payments (which include divi-
17
<PAGE> 21
dends, capital gain distributions and redemption proceeds) paid to certain
shareholders who have not properly certified that the Social Security or other
taxpayer identification number provided by the shareholder is correct and that
he or she is not otherwise subject to backup withholding. The Funds' Account
Application includes the required certification.
The foregoing tax discussion is general in nature and each investor is
advised to consult his or her tax advisor for additional information.
DESCRIPTION OF SHARES
The authorized common stock of Thompson Plumb Funds, Inc. consists of 100
million shares of common stock, $.001 par value per share ("Common Stock").
The shares of Common Stock are presently divided into three series: the
Balanced, Bond, and Growth Funds. Each such series consists of 10 million
shares of Common Stock. The Board of Directors may authorize the issuance of
additional series of Common Stock (funds) and may increase or decrease the
number of shares in each series.
Each share of Common Stock has one vote and, when issued and paid for in
accordance with the terms of this Prospectus, will be fully paid and
nonassessable, except that shareholders are subject to personal liability under
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, as judicially
interpreted, for debts owing to employees of the Funds for services performed,
but not exceeding six months' service in any one case. The Funds currently
have no employees and do not intend to have employees in the future. Shares of
Common Stock are redeemable at net asset value, at the option of the
shareholder. Shares of Common Stock have no preemptive, subscription,
conversion or cumulative voting rights and are freely transferable. Shares of
Common Stock can be issued as full shares or fractions of shares. A fraction
of a share has the same kind of rights and privileges as a full share.
Shareholders have the right to vote on the election of Directors at each
meeting of shareholders at which directors are to be elected and on other
matters as provided by law or the Fund's Articles of Incorporation or By-Laws.
Shareholders of each Fund vote together to elect a single Board of Directors of
the Funds and on other matters affecting the entire investment company, with
each share entitled to a single vote. On matters affecting only one Fund, only
the shareholders of that Fund are entitled to vote. On matters relating to all
Funds, but affecting individual Funds differently (such as a new Investment
Advisory Agreement), separate votes by shareholders of each Fund are required.
The Funds' Articles of Incorporation do not require the holding of annual
meetings of shareholders. However, special meetings of shareholders may be
called (and, at the request of shareholders holding 10% or more of the Funds'
outstanding shares must be called) for purposes such as electing or removing
directors, changing fundamental policies or approving investment advisory
contracts.
OTHER INFORMATION
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN
Firstar serves as the transfer and dividend disbursing agent for each of
the Funds and also serves as the custodian of the assets of each of the Funds.
SHAREHOLDER STATEMENTS, REPORTS AND INQUIRIES
Shareholders will receive confirmations at least quarterly regarding their
transactions in shares of the Funds, and will also receive reports at least
semiannually setting forth various financial and other information with respect
to the Funds in which they hold shares. The annual financial statements will
be audited by the Funds' independent accountants, Price Waterhouse LLP.
Shareholder inquiries may be directed to Thompson Plumb Funds, Inc. at, 8201
Excelsior Drive, Suite 200, Madison, Wisconsin 53717, Attention: Corporate
Secretary; or by telephone at 608-831-1300. Shareholders who wish to change
their address of record can either send a written request to Firstar or call
1-800-499-0079.
RETIREMENT PLANS
The Funds sponsor Individual Retirement Accounts ("IRAs") through which an
individual may invest annual IRA contributions and roll-over IRA contributions
in shares of any of the Funds. Firstar will serve as custodian for IRA
accounts sponsored by the Funds. Firstar will charge a $12.50 annual
maintenance fee for an IRA. Shareholders with two or more IRAs using the same
tax ID number will be charged a total of $25 annually. Please refer to the IRA
disclosure statement for a detailed listing of other fees. The Individual
Retirement Account Custodial Agreement, the IRA Disclosure Statement and the
Custodial
18
<PAGE> 22
Account Application are available from the Advisor.
Purchases and redemptions of shares of any Fund by IRAs and retirement
plans are treated in the same manner as any other account. See "Purchase and
Redemption of Shares." IRAs must meet a minimum initial investment
requirement of $250 and a minimum subsequent investment requirement of $100.
Redemption requests on behalf of IRA owners or retirement plans must indicate
whether to withhold federal income tax, or not.
Purchases may also be made by SEP's (Simplified Employee Benefit Plan),
403(b)(7) plans (for employees of public schools and certain non-profit
entities) and other retirement plans. A form of SEP plan is available from the
Advisor.
Because a retirement program involves commitments covering future years,
it is important that the investment objectives of the Funds be consistent with
the participant's retirement objectives. Premature withdrawals from a
retirement plan may result in adverse tax consequences. Consultation with an
individual's own tax or financial advisor is recommended.
PERFORMANCE INFORMATION
From time to time the Funds may advertise their "yield" and "total
return." Yield is based on historical earnings and total return is based on
historical distributions; neither is intended to indicate future performance.
The "yield" of a Fund refers to the income generated by an investment in that
Fund over a one-month period (which period will be stated in the
advertisement). This income is then "annualized." That is, the amount of
income generated by the investment during the month is assumed to be generated
each month over a 12-month period and is shown as a percentage of the
investment. "Total return" of a Fund refers to the average annual return for
one, five and ten-year periods (or so much thereof as a Fund has been in
operation). Total return is the change in redemption value of shares purchased
with an initial $1,000 investment, assuming the reinvestment of dividends and
capital gain distributions, after giving effect to the maximum applicable sales
charge. The Funds may also from time to time advertise total return on a
cumulative, average, year-by-year or other basis for various specified periods
by means of quotations, charts, graphs or schedules. In addition, the Funds
may from time to time advertise their performance relative to certain
performance rankings and indices.
Performance information should be considered in light of the Funds'
investment objectives and policies, characteristics and quality of their
securities portfolios and the market conditions during the time period, and
should not be considered as a representation of what may be achieved in the
future. Further information is contained in the Statement of Additional
Information.
PORTFOLIO TRANSACTIONS AND BROKERAGE
As provided in the Investment Advisory Agreement, the Advisor is
responsible for each Fund's portfolio decisions and the placing of portfolio
transactions. Purchase and sale orders for a Fund's portfolio securities may
be effected through brokers who charge a commission for their services,
although it is expected that transactions in debt securities will generally be
conducted with dealers acting as principals. In executing such transactions,
the Advisor seeks to obtain the best net results for the respective Fund,
taking into account such factors as price (including the brokerage commission
or dealer spread), size of order, competitive commissions on similar
transactions, difficulty of execution and operational facilities of the firm
involved and the firm's risk in positioning a block of securities. While the
Advisor seeks reasonably competitive rates, it does not necessarily pay the
lowest commission or spreads available. Transactions in small companies in
which the Balanced and Growth Funds invest may involve specialized services on
the part of the broker and thereby entail higher commissions or spreads than
would be paid in transactions involving more widely traded securities.
Allocation of transactions, including their frequency, to various brokers
and dealers is determined by the Advisor in its best judgment and in a manner
deemed fair and reasonable to shareholders. The primary consideration is
prompt and efficient execution of orders in an effective manner at the most
favorable price. Subject to this primary consideration, the Advisor may also
consider sales of shares of the Funds as a factor in the selection of brokers
and dealers to execute portfolio transactions.
The Funds may place orders for portfolio transactions with a broker who
recommends the purchase of a Fund's shares to clients if the Advisor believes
that such brokers' commissions or dealer spreads, quality of execution and
overall quality of brokerage and research services are comparable to those of
other brokers.
19
<PAGE> 23
DIRECTORS OF THE FUNDS
George H. Austin
Mary Ann Deibele
John W. Feldt
Donald A. Nichols
Thomas G. Plumb, CFA: Vice President
Thompson, Plumb & Associates, Inc.
John W. Thompson, CFA: President
Thompson, Plumb & Associates, Inc.
OFFICERS OF THE FUNDS
John W. Thompson, CFA
Chairman & Secretary
Thomas G. Plumb, CFA
President & Treasurer
CUSTODIAN, TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Firstar Trust Company
P. 0. Box 701
Milwaukee, Wisconsin 53201
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
33 South Sixth Street
Minneapolis, Minnesota 55402
LEGAL COUNSEL
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
INVESTMENT ADVISOR
Thompson, Plumb & Associates, Inc.
8201 Excelsior Drive, Suite 200
Madison, Wisconsin 53717
Telephone: (608) 831-1300
Thompson Plumb
Funds, Inc.
Prospectus
THOMPSON PLUMB BALANCED FUND
THOMPSON PLUMB BOND FUND
THOMPSON PLUMB GROWTH FUND
8201 Excelsior Drive, Suite 200
Madison, Wisconsin 53717
Telephone 608-831-1300
March 31, 1997
20
<PAGE> 24
PART B
STATEMENT OF ADDITIONAL INFORMATION
_________________
THOMPSON PLUMB FUNDS, INC.
8201 EXCELSIOR DRIVE, SUITE 200
MADISON, WISCONSIN 53717
TELEPHONE: (608) 831-1300
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Thompson Plumb Funds, Inc. Prospectus (the
"Prospectus") dated March 31, 1997. Requests for copies of the prospectus
should be made by writing to Thompson, Plumb & Associates, Inc., 8201 Excelsior
Drive, Madison, Wisconsin 53717, Attention: Corporate Secretary, or by calling
the number listed above.
In this Statement of Additional Information, Thompson Plumb Funds, Inc.
may be referred to as the "Investment Company," and its three separate series,
the Thompson Plumb Balanced Fund, the Thompson Plumb Bond Fund and the Thompson
Plumb Growth Fund may be referred to individually as the Balanced Fund, the
Bond Fund and the Growth Fund, respectively, or simply as a Fund or the Fund,
and may be referred to collectively as the "Funds." Prior to April 3, 1995,
Thompson Plumb Funds, Inc. was known as Thompson, Unger & Plumb Funds, Inc. and
the Funds were known as the Thompson, Unger & Plumb Balanced Fund, the
Thompson, Unger & Plumb Bond Fund and the Thompson, Unger & Plumb Growth Fund.
TABLE OF CONTENTS
PAGE
----
DESCRIPTION OF CERTAIN INVESTMENTS AND TRANSACTIONS......................... B-2
INVESTMENT RESTRICTIONS..................................................... B-5
DETERMINATION OF NET ASSET VALUE AND PRICING CONSIDERATIONS................. B-8
MANAGEMENT.................................................................. B-9
ADVISORY AND ADMINISTRATIVE SERVICES....................................... B-11
PORTFOLIO TRANSACTIONS AND BROKERAGE....................................... B-13
FUND PERFORMANCE........................................................... B-15
TAXES...................................................................... B-19
DESCRIPTION OF RATINGS OF CERTAIN FIXED INCOME SECURITIES.................. B-19
OTHER INFORMATION.......................................................... B-23
FINANCIAL STATEMENTS....................................................... B-24
The date of this Statement of Additional Information is March 31, 1997.
B-1
<PAGE> 25
DESCRIPTION OF CERTAIN INVESTMENTS AND TRANSACTIONS
LENDING PORTFOLIO SECURITIES
A Fund may lend its portfolio securities to broker-dealers and
financial institutions, such as banks and trust companies, however, absent
unforeseen market and economic conditions, the Funds have no present intention
to do so. In the event any Fund engages in this activity, Thompson, Plumb &
Associates, Inc. (the "Advisor") will monitor the creditworthiness of firms to
which the Fund lends its securities. Any such loan must be continuously
secured by collateral in cash or cash equivalents maintained on a current basis
in an amount at least equal to the market value of the securities loaned by the
Fund. The Fund would continue to receive the equivalent of the interest or
dividends paid by the issuer on the securities loaned, and would also receive
an additional return which may be in the form of a fixed fee or a percentage of
the collateral. The Fund would have the right to call the loan and obtain the
securities loaned at any time on notice of not more than five business days.
The Fund would not have the right to vote the securities during the existence
of the loan, but would call the loan to permit voting of securities during the
existence of the loan if, in the Advisor's judgment, a material event requiring
a shareholder vote would otherwise occur before the loan was repaid. In the
event of bankruptcy or other default of the borrower, the Fund could experience
both delays in liquidating the loan collateral or recovering the loaned
securities and losses including (a) possible decline in the value of the
collateral or in the value of the securities loaned during the period while the
Fund seeks to enforce its rights thereto, (b) possible subnormal levels of
income and lack of access to income during this period and (c) expenses of
enforcing its rights.
REPURCHASE AGREEMENTS
The Funds may from time to time enter into repurchase agreements,
although, absent unforeseen market and economic conditions, the Funds have no
present intention to do so. Repurchase agreements involve the sale of
securities to a Fund with the concurrent agreement of the seller (a bank or
securities dealer) to repurchase the securities at the same price plus an
amount equal to an agreed-upon interest rate within a specified time, usually
less than one week, but on occasion for a longer period. The Funds may enter
into repurchase agreements with broker-dealers who are recognized by the
Federal Reserve Bank of New York as primary dealers in United States Government
securities and with banks. At the time a Fund enters into a repurchase
agreement, the value of the underlying security, including accrued interest,
will be equal to or exceed the value of the repurchase agreement and, in the
case of repurchase agreements exceeding one day, the seller will agree that the
value of the underlying security, including accrued interest, will at all times
be equal to or exceed the value of the repurchase agreement. In the event the
seller of the repurchase agreement enters a bankruptcy or insolvency
proceeding, or in the event of the failure of the seller to repurchase the
underlying security as agreed, the Fund could experience losses that include
(a) possible decline in the value of the underlying security during the period
that the Fund seeks to enforce its rights with respect thereto, and possible
delay in the
B-2
<PAGE> 26
enforcement of such rights, (b) possible loss of all or a part of the income or
proceeds of the repurchase, (c) additional expenses to the Fund in connection
with enforcing those rights, and (d) possible delay in the disposition of the
underlying security pending court action or possible loss of rights in such
securities. The Advisor intends to cause the Funds to invest in repurchase
agreements only when the Advisor determines that the Funds should invest in
short-term money market instruments and the rates available on repurchase
agreements are favorable as compared to the rates available on other short-term
money market instruments or money market mutual funds, circumstances that the
Advisor does not anticipate will occur in the near future. The Advisor does
not currently intend to invest the assets of any Fund in repurchase agreements
if, after doing so, more than 5% of the Fund's net assets would be invested in
repurchase agreements.
WHEN-ISSUED TRANSACTIONS
A Fund may purchase or sell portfolio securities in when-issued
transactions, although, absent unforeseen market and economic conditions, the
Funds have no present intention to do so. In such transactions, instruments
are bought or sold with payment and delivery taking place in the future in
order to secure what is considered to be an advantageous yield or price to the
Fund at the time of entering into the transactions. In such transactions, the
payment obligations and the interest rate are fixed at the time the buyer
enters into the commitment, although no interest accrues to the purchaser prior
to settlement of the transaction. Consistent with the requirements of the
Investment Company Act of 1940, securities purchased on a when-issued basis are
recorded as an asset (with the purchase price being recorded as a liability)
and are subject to changes in value based upon changes in the general level of
interest rates. At the time of delivery of the security, the value may be more
or less than the transaction price. To the extent that the Fund remains
substantially fully invested at the same time that it has entered into such
transactions, which all of the Funds would normally expect to do, there will be
greater fluctuations in the market value of the Fund's assets than if the Fund
set aside cash to satisfy the purchase commitment. However, each Fund will
maintain designated liquid assets with a market value, determined daily, at
least equal to the amount of commitments for when-issued securities, such
assets to be ear-marked specifically for the settlement of such commitments.
Each Fund will only make commitments to purchase portfolio securities on a
when-issued basis with the intention of actually acquiring the securities, and
not for the purpose of investment leverage, but the Funds reserve the right to
sell the securities before the settlement date if it is deemed advisable. None
of the Funds currently intend to purchase securities in when-issued
transactions if, after such purchase, more than 5% of the Fund's net assets
would consist of when-issued securities.
ILLIQUID SECURITIES
No Fund will invest more than 10% of the value of its net assets in
securities which are illiquid, including restricted securities, securities for
which there are no readily available market quotations and repurchase
agreements providing for settlement in more than seven
B-3
<PAGE> 27
days after notice. For the purposes of this restriction, the Funds do not
consider variable rate demand notes to be restricted securities. See
"Variable Rate Demand Notes" below.
VARIABLE RATE DEMAND NOTES
The Funds may purchase variable rate master demand notes, which are
unsecured instruments that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate. Although the notes are
not normally traded and there may be no secondary market in the notes, the
Funds may demand payment of principal and accrued interest at any time. The
investment policy of each Fund is to purchase variable rate demand notes only
if, at the time of purchase, the issuer has unsecured debt securities
outstanding that are rated within the two highest rating categories by either
Standard & Poor's Ratings Services or Moody's Investors Service, Inc.
MORTGAGE-BACKED SECURITIES
The Balanced and Bond Funds may invest in mortgage-related securities,
which include securities that represent interests in pools of mortgage loans
made by lenders such as savings and loan institutions, mortgage bankers,
commercial banks and others. These pools are combined for sale to investors
(such as the Balanced and Bond Funds) by various governmental and
government-related entities, as well as commercial banks, savings and loan
institutions, private mortgage insurance companies, mortgage bankers and other
private issuers. Mortgage-related securities generally provide for a
"pass-through" of monthly payments made by individual borrowers on their
residential mortgage loans, net of any fees paid to the issuer or guarantor of
the securities.
GNMA is the principal government guarantor of mortgage-related
securities. GNMA is authorized to guaranty, with the full faith and credit of
the United States Government, timely payment of principal and interest on
securities it approves that are backed by pools of FHA-insured or VA-guaranteed
mortgages. GNMA securities are described as "modified pass-through" in that
they provide a monthly payment of interest and principal payments owed on the
mortgage pool, net of certain fees, regardless of whether the mortgagor
actually makes the payment. Other government related guarantors of these
securities include the Federal National Mortgage Association ("FNMA") and the
Federal Home Loan Mortgage Corporation ("FHLMC"). FNMA and FHLMC securities
are guaranteed as to payment of principal and interest by those agencies, but
are not backed by the full faith and credit of the United States Government.
With respect to private mortgage-backed securities, timely payment of principal
and interest of these pools is supported by various forms of insurance or
guarantees, including individual loan, title, pool and hazard insurance. There
can be no assurance that private insurers or guarantors can meet their
obligations under such policies.
Certain mortgage-backed securities purchased by the Balanced and Bond
Funds provide for a prepayment privilege and for amortized payments of both
interest and principal over the term of the security. The yield on the
original investment in such
B-4
<PAGE> 28
securities applies only to the unpaid principal balance, as the Fund must
reinvest the periodic payments of principal at prevailing market interest rates
which may be higher or lower then the rate on the original security. In
addition, the prepayment privilege may require the Fund to reinvest at lower
yields than were received from the original investment. If these instruments
are purchased at a premium in the market, and if prepayment occurs, such
prepayments will be at par or stated value, which will result in reduced return
on such transactions.
During periods of declining interest rates, prepayment of mortgages
from underlying mortgage-backed securities can be expected to accelerate.
Accordingly, the Balanced and Bond Fund's ability to maintain positions in
high-yielding mortgage-backed securities will be affected by reductions in the
principal amount of such securities resulting from such prepayments, and its
ability to reinvest the returns of principal at comparable yields will depend on
prevailing interest rates at that time. Neither the Balanced Fund nor the Bond
Fund currently intends to purchase mortgage-backed securities if, after such
purchase, more than 5% of the respective Fund's net assets would consist of
mortgage-backed securities.
INVESTMENTS IN OTHER INVESTMENT COMPANIES
An investment by a Fund in another investment company may cause the
Fund to increase payments of administration and distribution expenses. Such
investments are limited by investment restriction (7). See "Investment
Restrictions" in this Statement of Additional Information.
INVESTMENT RESTRICTIONS
Each Fund has adopted the following investment restrictions, none of
which -- except for the matters described in the second sentence of item (5) and
in the second sentence of item (7) -- may be changed without the approval of the
holders of a majority of the outstanding shares (as defined in the Investment
Company Act of 1940) of the Fund. A Fund may not:
(1) Purchase the securities of issuers conducting their principal
business activity in the same industry if immediately after such purchase the
value of the Fund's investments in such industry would exceed 25% of the value
of its total assets, provided that there is no limitation with respect to or
arising out of investments in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.
(2) Purchase a security if, as a result, with respect to 75% of
the value of the Fund's total assets, more than 5% of its total assets would be
invested in the securities of any one issuer, other than obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.
B-5
<PAGE> 29
(3) Make loans, except through the purchase of debt obligations
in accordance with the Fund's investment objective and policies and through
repurchase agreements with banks, brokers, dealers and other financial
institutions.
(4) Issue senior securities in violation of the Investment
Company Act of 1940 or borrow money, except (a) as a temporary measure, and then
only in amounts not exceeding 5% of the value of the Fund's total assets or (b)
from banks, provided that immediately after any such borrowing all borrowings of
the Fund do not exceed one-third of the Fund's net assets. The exceptions to
this restriction are not for investment leverage purposes but are solely for
extraordinary or emergency purposes and to facilitate management of each Fund's
portfolio by enabling the Fund to meet redemption requests when the liquidation
of portfolio instruments is deemed to be disadvantageous or not possible. While
a Fund has borrowings in excess of 5% of the value of the Fund's total assets
outstanding, it will not make any purchases of portfolio instruments. If due to
market fluctuations or other reasons the net assets of a Fund fall below 300% of
its borrowings, the Fund will promptly reduce its borrowings in accordance with
the Investment Company Act of 1940. To do this, the Fund may have to sell a
portion of its investments at a time when it may be disadvantageous to do so.
(5) Mortgage or pledge any assets except to secure permitted
borrowings, and then only in an amount up to 15% of the value of the Fund's net
assets, taken at cost at the time of such borrowings. Notwithstanding the prior
sentence, each Fund's current intention is not to mortgage, pledge or
hypothecate more than 5% of the value of the Fund's net assets.
(6) Purchase or sell real estate or commodities, except that a
Fund may purchase and sell (a) securities issued by real estate investment
trusts or other companies which invest in or own real estate, and (b) securities
secured by interests in real estate, provided in each case that such securities
are marketable.
(7) Purchase securities of other investment companies, except to
the extent permitted by the Investment Company Act of 1940. Subject to certain
exceptions, the Investment Company Act of 1940 prohibits a Fund from investing
more than 5% of its total assets in securities of another investment company,
investing more than 10% of its total assets in securities of such investment
company and all other investment companies, or purchasing more than 3% of the
total outstanding voting stock of another investment company.
(8) Purchase more than 10% of the outstanding voting securities
of any one issuer or invest in companies for the purpose of exercising control
or management.
(9) Act as an underwriter of securities issued by others, except
in instances where the Fund has acquired portfolio securities which it may not
be free to sell publicly
B-6
<PAGE> 30
without registration under the Securities Act of 1933 (if the Fund sells such
securities, it may technically be deemed an "underwriter" for purposes of such
Act).
For purposes of the restriction in item (2) above, a guarantee of an
instrument will be considered a security separate from such instrument (subject
to certain exclusions allowed pursuant to Rule 5b-2 under the Investment Company
Act of 1940). Such Rule provides that a guarantee of a security will not be
deemed to be a security issued by the guarantor, provided that the value of all
securities issued or guaranteed by the guarantor, and owned by the Fund, does
not exceed 10% of the value of the total assets of the Fund.
In addition to the foregoing restrictions, the Investment Company's
Board of Directors has adopted the following restrictions, which may be changed
without shareholder approval, in order to comply with the securities laws of
various states. A Fund may not:
(a) Purchase the equity securities of companies which have a
record of less than three years continuous operation if any such purchase at the
time thereof would cause more than 5% of the value of the total assets of the
Fund to be invested in securities of such companies. Such period of three years
includes the operation of any predecessor company or companies, partnership or
individual enterprise if the company whose securities are proposed as an
investment has come into existence as the result of a merger, consolidation,
reorganization or the purchase of substantially all of the assets of such
predecessor company or companies, partnership or individual enterprise.
(b) Purchase or retain the securities of an issuer if, to the
Fund's knowledge, those officers or directors of the Fund or its investment
adviser who individually own beneficially more than 0.5 of 1% of the outstanding
securities of such issuer together own beneficially more than 5% of such
outstanding securities.
(c) Purchase securities on margin, but a Fund may obtain such
short-term credits as may be necessary for the clearance of purchase and sales
of securities.
(d) Make short sales of securities.
(e) Participate on a joint or joint-and-several basis in any
securities trading account.
(f) Invest in puts, calls, straddles or spreads, or combinations
thereof.
(g) Invest in oil, gas or other mineral exploration or
development programs, but this shall not prohibit a Fund from investing in
securities of companies engaged in oil, gas or mineral activities.
(h) Invest in warrants, valued at the lower of cost or market, in
an amount in excess of 5% of the value of the Fund's net assets. Included
within such amount, but not
B-7
<PAGE> 31
to exceed 2% of the value of the Fund's net assets, may be warrants which are
not listed on the New York or American Stock Exchange. Warrants acquired by a
Fund in units or attached to securities may be deemed to be without value for
purposes of this restriction.
(i) Buy or sell real estate or invest in the securities of real
estate investment trusts or real estate limited partnerships, provided the Funds
may invest in the securities of other companies whose business involves the
purchase and sale of real estate.
For purposes of the foregoing limitations -- except for the limitation
referred to in the fourth sentence of item (4) above -- any limitation which
involves a maximum percentage shall not be considered violated unless an excess
over the percentage occurs immediately after, and is caused by, an acquisition
or encumbrance of securities or assets of, or borrowings by, a Fund.
During the year ended November 30, 1996, each of the Balanced Fund,
Bond Fund and Growth Fund did not borrow money or mortgage or pledge its assets
pursuant to the authority contained in items (4) and (5) above. During such
year each Fund also did not: (i) purchase securities issued by real estate
investment trusts; (ii) purchase securities issued by other investment
companies; (iii) purchase any warrants; (iv) purchase any securities guaranteed
by a third party; or (v) enter into any repurchase agreements. Whether any of
the Funds will engage in the types of transactions or make the types of
investments described in the preceding two sentences in the future will depend
on market conditions and the Advisor's judgment as to whether engaging in such
transactions or making such investments is appropriate, except that none of the
Funds has any present intention to purchase securities issued by real estate
investment trusts.
DETERMINATION OF NET ASSET VALUE AND PRICING CONSIDERATIONS
The Funds' net asset value is determined only on the days on which the
New York Stock Exchange is open for trading. That Exchange is regularly closed
on Saturdays and Sundays and on New Years' Day, the third Monday in February,
Good Friday, the last Monday in May, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day. If one of those holidays falls on a Saturday or Sunday,
the Exchange will be closed on the preceding Friday or the following Monday,
respectively.
Reliable market quotations are not considered to be readily available
for many long-term corporate bonds and notes and certain preferred stocks in
which the Funds may invest. As authorized by the Board of Directors, these
investments are stated at fair market value on the basis of valuations furnished
by independent broker bid quotations and/or independent pricing services.
Independent pricing services approved by the Board of Directors determine
valuations for normal, institutional-sized trading units of such securities
B-8
<PAGE> 32
using methods based on market transactions for comparable securities and various
relationships between securities which are generally recognized by institutional
traders.
Generally, trading in U.S. Government securities and other fixed
income securities is substantially completed each day at various times prior to
the close of the New York Stock Exchange. The values of such securities used in
determining the net asset value of a Fund's shares are computed as of such
times. Occasionally, events affecting the value of such securities may occur
between such times and the close of the New York Stock Exchange, which events
will not be reflected in the computation of the Fund's net asset value for that
day. If events materially affecting the value of the Fund's securities occur
during such a period, then the securities will be valued at their fair value as
determined in good faith by the Board of Directors.
The Funds intend to pay all redemptions in cash and are obligated to
redeem shares solely in cash. Redemption proceeds ordinarily will be sent
within seven days after receipt of the redemption request and all necessary
documents. Each Fund reserves the right to suspend or postpone redemptions
during any period when: (a) trading on the New York Stock Exchange is
restricted, as determined by the or that Exchange is closed for other than
customary weekend and holiday closing; (b) the has by order permitted such
suspension; or (c) an emergency, as determined by the , exists, making disposal
of portfolio securities or valuation of net assets of the Funds not reasonably
practicable.
MANAGEMENT
Information pertaining to the Directors and officers of the Investment
Company is set forth below. Directors deemed to be "interested persons" of the
Funds for purposes of the Investment Company Act of 1940 are so indicated.
GEORGE H. AUSTIN (interested person), 8201 Excelsior Drive, Suite 200,
Madison, Wisconsin 53717. DIRECTOR. Mr. Austin has been the Director of
Research and Portfolio Manager of the Advisor since March 1994 and, prior
thereto, was the Director of Investments of the Wisconsin Alumni Research
Foundation from 1976 to 1994.
MARY ANN DEIBELE, 20029 Reichardt Road, Kiel, Wisconsin 53042.
DIRECTOR. Ms. Deibele has been retired since September 1994 and, prior thereto,
was a Director and a member of the executive committee of Household Utilities,
Inc., a high tech sheet metal fabricating facility.
JOHN W. FELDT, 150 East Gilman Street, Madison, Wisconsin 53703.
DIRECTOR. Mr. Feldt has been the Senior Vice President of Finance of the
University of Wisconsin
B-9
<PAGE> 33
Foundation since 1984 and, prior thereto, was the Vice President of Finance for
the University of Wisconsin Foundation, a not-for-profit corporation.
DONALD A. NICHOLS, 1180 Observatory Drive, Madison, Wisconsin 53706.
DIRECTOR. Mr. Nichols has been Professor of Economics of the University of
Wisconsin since 1966 and was Chairman, Department of Economics from 1983 to
1986 and from 1988 to 1990. He now serves as Director of the Center for
Research on the Wisconsin economy. He has been a member of the Board of
Advisors of the American Players Theatre since 1993, economic adviser to the
Governor of the State of Wisconsin from 1982 through 1986 and a consultant to
National Economic Research Associates during 1985. In addition, Mr. Nichols
has appeared as an expert witness in numerous court proceedings involving the
estimation of damages, both corporate and individual.
THOMAS G. PLUMB (interested person), 8201 Excelsior Drive, Suite 200,
Madison, Wisconsin 53717. PRESIDENT, TREASURER AND DIRECTOR. Mr. Plumb has
been Vice President of the Advisor since he co-founded it in June 1984. He was
Vice President of Firstar Bank Madison, N.A., Investment Management Division,
from December 1983 to June 1984. He had various officer and management
responsibilities at Firstar Bank Madison, N.A. from November 1979 to December
1983. He has been in the investment management business since 1975. He is a
Chartered Financial Analyst.
JOHN W. THOMPSON (interested person), 8201 Excelsior Drive, Suite 200,
Madison, Wisconsin 53717. CHAIRMAN, SECRETARY AND DIRECTOR. Mr. Thompson has
been President of the Advisor since he co-founded it in June 1984 and has been
Treasurer of the Advisor since October 1993. From September 1979 until his
resignation in June 1984, Mr. Thompson was First Vice President and Division
Manager of the Investment Management Division of Firstar Bank Madison, N.A. He
has been in the investment management business since 1971. He is a Chartered
Financial Analyst.
Directors and officers of the Investment Company who are officers,
directors, employees or shareholders of the Advisor do not receive any
remuneration from the Funds for serving as directors or officers. Those
directors who are not so affiliated with the Advisor received $8,000 in fiscal
year 1996, as set forth in the table below.
<TABLE>
<CAPTION>
Aggregate Estimated Total
Compensation Pension or Annual Compensation From
From Investment Retirement Benefits Upon Investment Company
Director Company Benefits Retirement And Fund Complex
- ----------------- --------------- ---------- ------------- ------------------
<S> <C> <C> <C> <C>
Mary Ann Deibele $8,000 None None $8,000
John W. Feldt $8,000 None None $8,000
Donald A. Nichols $8,000 None None $8,000
</TABLE>
John W. Thompson and Thomas G. Plumb each own 50% of the outstanding
shares of the Advisor.
B-10
<PAGE> 34
As of February 28, 1997, the Investment Company's Directors and
officers as a group owned 71,663 shares (4.38% of the outstanding shares) of the
Balanced Fund, 19,332 shares (0.71% of the outstanding shares) of the Bond Fund
and 29,364 (3.34% of the outstanding shares) of the Growth Fund.
ADVISORY AND ADMINISTRATIVE SERVICES
As stated in the Prospectus, Thompson, Plumb & Associates, Inc. acts
as the investment advisor and administrator for each of the Funds. See
"Management of the Funds" in the Prospectus for a description of the duties of
Thompson, Plumb & Associates, Inc. as investment advisor. The administrative
obligations of the Advisor include: (a) providing supervision of all aspects of
each Fund's non-investment operations, such as custody of the Fund's assets,
shareholder servicing and legal and audit services (the parties giving due
recognition to the fact that certain of such operations are performed by others
pursuant to the Funds' agreements with their custodian and shareholder servicing
agent), (b) providing each Fund, to the extent not provided pursuant to such
agreements or the agreement with the Funds' accounting services agent, with
personnel to perform such executive, administrative and clerical services as are
reasonably necessary to provide effective administration of the Fund, such as
preparing budgets, supplying information for the Prospectus, this Statement of
Additional Information and various reports, and handling meetings of
shareholders, (c) arranging, to the extent not provided pursuant to such
agreements, for the preparation of each Fund's tax returns, reports to
shareholders, periodic updating of the Prospectus and this Statement of
Additional Information, and reports filed with the SEC and other regulatory
authorities, all at the expense of the Fund, (d) providing each Fund, to the
extent not provided pursuant to such agreements, with adequate office space and
certain related office equipment and services in Madison, Wisconsin, and (e)
maintaining all of the records of each Fund other than those maintained pursuant
to such agreements.
For the fiscal years ended November 30, 1996, 1995, and 1994, in
return for serving as the Funds' investment advisor and administrator, the
Advisor earned fees for the Balanced Fund in the amounts of $163,437, $147,812
and $166,119, respectively, for the Bond Fund in the amounts of $115,203,
$81,158 and $61,833, respectively, and for the Growth Fund in the amounts of
$171,264, $78,969 and $54,826, respectively.
The Advisory Agreement provides that the Advisor may render similar
services to others so long as its services under the Agreement are not impaired
thereby. The Advisory Agreement also provides that the Funds will indemnify the
Advisor against certain liabilities, including liabilities under the federal
securities laws, or, in lieu thereof, contribute to resulting losses. The
Advisory Agreement further provides that, subject to Section 36 of the
Investment Company Act of 1940, the Advisor will not be liable for any error of
judgment or mistake of law or for any loss suffered by the Funds in connection
with the matters to which the Agreement relates, except liability to a Fund or
its shareholders to which the
B-11
<PAGE> 35
Advisor would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence, in the performance of its duties, or by reason of its
reckless disregard of its obligations and duties under the Agreement.
The Advisory Agreement between the Advisor and the Funds was approved
pursuant to the vote of a majority of the outstanding shares (as defined in the
Investment Company Act of 1940) of the Balanced Fund on March 9, 1988 and of the
Bond and Growth Funds on December 22, 1992. The Advisory Agreement will
continue from year to year with respect to each Fund provided such continuance
is specifically approved at least annually, (a) by the vote of the outstanding
shares of the Fund or by the Directors of the Funds, and (b) by the vote of a
majority of the Directors of the Funds who are not parties to the Advisory
Agreement or "interested persons" (as such term is defined in the Investment
Company Act of 1940) of any party thereto, cast in person at a meeting called
for the purpose of voting on such approval. The Advisory Agreement will
terminate automatically if assigned (as defined in the Investment Company Act of
1940) and is terminable at any time without penalty by the Directors of the
Funds or, with respect to any Fund, by vote of a majority of the outstanding
shares of the Fund (as defined in the Investment Company Act of 1940) on 60
days' written notice to the Advisor and by the Advisor on 60 days' written
notice to the Funds.
ACCOUNTING SERVICES AGENT
Under its Accounting Services Agreement with the Funds, the Advisor
maintains and keeps current certain accounts and financial records of each Fund,
prepares the financial statements of each Fund as required by the Investment
Company Act of 1940 and calculates the net asset value per share of each Fund on
a daily basis.
For the fiscal years ended November 30, 1996, 1995 and 1994, the
Advisor earned fees for the services it provided to, and the expenses it assumed
for, the Funds under the Accounting Services Agreement in the amounts of
$38,456, $31,168 and $25,950, respectively, for the Balanced Fund; $35,457,
$30,217 and $25,950, respectively, for the Bond Fund; and $34,990, $30,214 and
$25,950, respectively, for the Growth Fund.
EXPENSES
Except as set forth in the Prospectus under "Management of the Funds,"
the Funds are responsible for the payment of their own expenses. Such expenses
include, without limitation: the fees payable to the Advisor; the fees and
expenses of the Funds' custodian and transfer and dividend disbursing agent; the
cost of stock certificates; association membership dues; any portfolio losses;
filing fees for the registration or qualification of Fund shares under federal
or state securities laws; expenses of the organization of the Funds; taxes;
interest; costs of liability insurance, fidelity bonds, indemnification or
contribution; any costs, expenses or losses arising out of any liability of, or
claim for damages or other relief asserted against, the Funds for violation of
any law; legal and auditing fees and
B-12
<PAGE> 36
expenses; expenses of preparing and setting in type prospectuses, statements of
additional information, proxy material, reports and notices and the printing and
distributing of the same to the Funds' existing shareholders and regulatory
authorities; compensation and expenses of the Funds' Directors; and
extraordinary expenses incurred by the Funds. The Advisor will bear the expense
of printing and distributing prospectuses to prospective shareholders.
The Advisor intends to voluntarily reimburse the Bond and Growth Funds
for all expenses incurred by them on an annual basis in excess of 1.15% and
1.80% of average daily net assets, respectively. Voluntary reimbursement may be
initiated, modified or discontinued by the Advisor at any time.
CUSTODIAN
Firstar Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201-0701,
is the custodian of the Funds' portfolio securities and cash.
COUNSEL AND INDEPENDENT ACCOUNTANTS
Quarles & Brady, 411 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, serves as general counsel to the Funds, and passes on the validity of the
shares of each Fund.
Price Waterhouse LLP, independent accountants, 33 South Sixth Street,
Minneapolis, Minnesota 55402, serves as independent accountants for the Funds.
The financial statements of the Funds incorporated by reference into this
Statement of Additional Information (under "Financial Statements") from the
annual report to shareholders for the fiscal year ended November 30, 1996 (the
"Annual Report") and the data set forth under "Financial Highlights" in the
Prospectus have been so incorporated or included herein and therein in reliance
upon the authority of said firm as experts in auditing and accounting.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Advisor is responsible for decisions to buy and sell securities
for each Fund, the selection of brokers and dealers to effect the transactions
and the negotiation of brokerage commissions, where applicable. Purchases and
sales of securities on a national securities exchange are effected through
brokers who charge a negotiated commission for their services. In the
over-the-counter market, securities are generally traded on a "net" basis with
dealers acting as principal for their own accounts without a stated commission,
although the price of the security usually includes a profit to the dealer. In
underwritten offerings, securities are purchased at a fixed price which includes
an amount of compensation to the underwriter, generally referred to as the
underwriter's concession or discount. On occasion, certain money market
instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid.
B-13
<PAGE> 37
In placing purchase and sale orders for portfolio securities for the
Fund, it is the policy of the Advisor to seek the best net price and the most
favorable execution in light of the overall quality of brokerage and research
services provided. In addition, the Advisor may place orders for portfolio
transactions with brokers who recommend the purchase of shares of the Funds to
clients if the Advisor believes that such brokers' commissions or dealer
spreads, quality of execution and the overall quality of brokerage and research
services are comparable to those of other brokers. In selecting brokers to
effect portfolio transactions, the determination of what is expected to result
in best net price and the most favorable execution involves a number of largely
judgmental considerations. Among these are the Advisor's evaluation of the
broker's efficiency in executing and clearing transactions and the broker's
financial strength and stability. The best net price takes into account the
brokerage commission or dealer spread involved in purchasing the securities.
Transactions in the securities of small companies may involve specialized
services on the part of the broker and thereby entail higher commissions or
spreads than would be paid in transactions involving more widely traded
securities.
In selecting brokers to effect portfolio transactions for the Funds,
the Advisor 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, access to computerized
data bases and the software for analyzing such data bases, and the availability
of the brokerage firm's analysts for consultation. Where computer software
serves other functions than assisting the Advisor in the investment
decision-making process (e.g., recordkeeping), the Advisor makes a reasonable
allocation of the cost of the software to such other functions and bears such
part of the cost itself. While the Advisor believes such information and
services have substantial value, the Advisor considers them supplemental to its
own efforts in the performance of its duties under the Advisory Agreement. Other
clients of the Advisor may benefit from the availability of these services to
the Advisor, and the Funds may benefit from services available to the Advisor as
a result of transactions for other clients. The Advisory Agreement provides
that the Advisor, in placing orders for portfolio securities, is entitled to
rely upon Section 28(e) of the Securities Exchange Act of 1934. Such section
generally permits the Advisor to cause the Funds to pay a broker or dealer, who
provides brokerage and research services to the Advisor, an amount of commission
for effecting a securities transaction in excess of the amount another broker or
dealer would have charged for effecting the transaction; provided the Advisor
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 or dealer viewed in terms of either the particular transaction
or the Advisor's overall responsibilities with respect to the Funds and the
other accounts as to which the Advisor exercises investment discretion.
On occasions when the Advisor deems the purchase or sale of a security
to be in the best interests of a Fund as well as the Advisor's other customers
(including any other fund or other investment company or advisory account for
which the Advisor acts as investment
B-14
<PAGE> 38
advisor), the Advisory Agreement provides that the Advisor, to the extent
permitted by applicable laws and regulations, may aggregate the securities to be
sold or purchased for the Fund with those to be sold or purchased for such other
customers in order to obtain the best net price and most favorable execution.
In such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Advisor in the manner
it considers to be most equitable and consistent with its fiduciary obligations
to the Fund and such other customers. In some instances, this procedure may
adversely affect the size of the position obtainable for a Fund.
During the fiscal year ended November 30, 1996, the Balanced Fund,
Bond Fund and Growth Fund paid brokerage commissions aggregating $52,603, $6,647
and $58,839, respectively, in connection with their portfolio transactions. The
entire amount of such commissions was paid to brokers or dealers who provided
research services to the Advisor in transactions amounting to $29,424,090,
$16,206,947 and $20,650,460, respectively, other than brokerage commissions of
$700 paid to brokers or dealers by the Growth Fund for executing transactions
totalling $241,879.
During the fiscal years ended November 30, 1995 and 1994, the Funds
paid brokerage commissions in connection with their portfolio transactions
aggregating $57,196 and $53,623, respectively, for the Balanced Fund; $6,066 and
$4,404, respectively, for the Bond Fund; and $46,307 and $20,473, respectively,
for the Growth Fund.
FUND PERFORMANCE
GENERAL
From time to time the Funds may advertise yield and total return for
various periods of investment. Such information will always include uniform
performance calculations based on standardized methods established by the , and
may also include other total return information. Yield is based on historical
earnings and total return is based on historical calculated earnings; neither is
intended to indicate future performance. Performance information should be
considered in light of the particular Fund's investment objectives and policies,
characteristics and quality of its portfolio securities in the market conditions
during the applicable period, and should not be considered as a representation
of what may be achieved in the future. Investors should consider these factors,
in addition to differences in the methods used in calculating performance
information, when comparing a particular Fund's performance to the performance
data established for alternative investments.
B-15
<PAGE> 39
AVERAGE ANNUAL TOTAL RETURN
For each of the Funds, standardized annual total return is computed by
finding the average annual compounded rates of return over the one, five and
ten-year periods (or the portion thereof during which the Fund has been in
existence) that would equate the initial amount invested to the ending
redeemable value according to the following formula:
n
P(1+T) =ERV
WHERE:
T = average annual total return;
n = number of years and portion of a year;
ERV = ending redeemable value (of the hypothetical $1,000 payment)
at the end of the 1, 5 and 10-year periods, or fractional
portion thereof, after deduction of all non-recurring
charges to be deducted, assuming redemption at the end of
the period; and
P = $1,000 (the hypothetical initial payment).
The average annual total return for the Balanced Fund for the one-year
and five-year periods ended November 30, 1996 and for the period from March 16,
1987 (commencement of operations) through November 30, 1996, and the average
annual total returns for the Bond and Growth Funds for the one-year period ended
November 30, 1996 and for the period from February 10, 1992 (commencement of
operations) through November 30, 1996 are as follows:
<TABLE>
<CAPTION>
FROM COMMENCEMENT
1 YEAR 5 YEARS OF OPERATIONS
------ ------- -----------------
<S> <C> <C> <C>
Balanced Fund 25.80% 12.18% 10.35%(1)
Bond Fund 4.51% -- 5.91%(2)
Growth Fund 35.52% -- 13.51%(3)
</TABLE>
__________________
(1) Without expense reimbursements by the Advisor in 1988 and 1987, the
Balanced Fund's average annual total return for the period from
commencement of operations through November 30, 1996 would have been
10.31%.
B-16
<PAGE> 40
(2) Without expense reimbursements by the Advisor in 1995, 1994, 1993 and
1992, the Bond Fund's average annual return for the period from
commencement of operations through November 30, 1996 would have been
5.36%.
(3) Without expense reimbursements by the Advisor in 1994 and 1992, the
Growth Fund's average annual return for the period from commencement
of operations through November 30, 1996 would have been 13.43%.
CURRENT YIELD
Current yield quotations for the Funds are based on a 30-day (or
one-month) period, and are computed by dividing the net investment income per
share earned during the period by the maximum offering price per share on the
last day of the period, according to the following formula:
a-b 6
Yield=2[--- +1) -1]
cd
WHERE:
a = dividends and interest earned during the period;
b = expenses accrued for the period (net of reimbursements);\
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends; and
d = the maximum offering price per share on the last day of the
period.
For purposes of this calculation, income earned on debt obligations is
determined by applying a calculated yield-to-maturity percentage to the
obligations held during the period. Interest earned on mortgage backed
securities will be calculated using the coupon rate and principal amount after
adjustment for a monthly paydown. Income earned on equity securities is
determined by using the stated annual dividend rate applied over the performance
period. Because the investment objectives of the Balanced and Growth Funds do
not relate solely to current income, these Funds will not typically advertise
yield. The yield for the Bond Fund for the 30-day period ended November 30,
1996 was 5.37%. When advertising yield, the Bond Fund will not advertise a
one-month or a 30-day period which ends more than 45 days before the date on
which the advertisement is published.
B-17
<PAGE> 41
The performance data for the Funds is based on historical results and
is not intended to indicate future performance. Each Fund's total return will
vary based on market conditions, Fund expenses, portfolio investments and other
factors. The value of a Fund's shares will fluctuate and an investor's shares
may be worth more or less than their original cost upon redemption.
OTHER PERFORMANCE INFORMATION
Each Fund may from time to time advertise its comparative performance
as measured by various independent sources, including, without limitation,
Lipper Analytical Services, Inc., Barron's, The Wall Street Journal, The New
York Times, U.S.A. Today, Weisenberger Investment Companies Service, Consumer
Reports, Time, Newsweek, U.S. News and World Report, Business Week, Financial
World, U.S. News and World Reports, Milwaukee Journal Sentinel, Wisconsin State
Journal, Forbes, Fortune, Money, Morningstar Publications, Standard &
Poors/Lipper Mutual Fund Profiles and The Individual Investor's Guide to No-Load
Mutual Funds. A Fund may also note its mention in, or inclusion in lists or
rankings prepared or published by, such independent sources and other
newspapers, magazines and media from time to time. However, the investment
company assumes no responsibility for the accuracy of such information. In
addition, each Fund may from time to time advertise its performance relative to
certain other mutual funds or groups of funds, indices and benchmark
investments, including, without limitation, the Value Line Index, Lipper Capital
Appreciation Fund Average, Lipper Growth Funds Average, Lipper General Equity
Funds Average, Lipper Equity Funds Average, Morningstar Growth Average,
Morningstar Equity Fund Average, Morningstar Hybrid Average, Morningstar All
Equity Funds Average, Lipper Balanced Funds Index, Lipper Balanced Funds
Average, Morningstar General Equity Average, Dow Jones Industrial Average, New
York Stock Exchange Composite Index, American Stock Exchange Composite Index,
Standard & Poor's 500 Stock Index, Russell 2000 Small Stock Index, Russell
Mid-Cap Stock Index, Russell 2500 Index, Standard & Poor's 400 Industrials,
Standard & Poor's 100, Wilsure 5000, Wilsure 4500, Wilsure 4000, Lehman Brothers
Intermediate Corporate/Government Bond Index, Nasdaq Industrials, Nasdaq-OTC
Price Index and Consumer Price Index.
Each Fund may advertise its rankings as published by Lipper Analytical
Services, Inc. in its categories or sub-categories, as well as its rating by
Morningstar, Inc. The Lipper and Morningstar averages are unweighted averages
of total return performance of mutual funds as classified, calculated and
published by Lipper and Morningstar. Morningstar's rating system is based on
risk-adjusted total return performance and is expressed in a star-rating format.
The risk-adjusted number is computed by subtracting a Fund's risk (which is a
function of the Fund's monthly returns less the three-month Treasury bill
return) from the Fund's load-adjusted total return score. This numerical score
is then translated into rating categories, with the top 10% labeled five star,
the next 22.5% labeled four star, then next 35% labeled three star, the next
22.5% labeled two star and bottom 10% rated one star. A high rating reflects
either above-average returns or below-average risks, or both.
B-18
<PAGE> 42
TAXES
The dividends received deduction available to a corporate shareholder
with respect to certain ordinary income distributions from a Fund may be reduced
below 70% if the shareholder has incurred any indebtedness directly attributable
to its investment in Fund shares.
Any ordinary income or capital gain distribution will reduce the net
asset value of Fund shares by the amount of the distribution. Although such a
distribution thus resembles a return of capital if received shortly after the
purchase of shares, it generally will be taxable to shareholders.
All or part of any loss that a shareholder realizes on a redemption of
shares will be disallowed if the shareholder purchases other shares of the same
Fund (including by the automatic reinvestment of Fund distributions in
additional Fund shares) within 30 days before or after the redemption.
In years when a Fund distributes to shareholders amounts exceeding the
Fund's earnings and profits as determined for tax purposes, such excess will not
be taxed to the shareholders as a dividend, but rather will be treated first as
a tax-free return of each shareholder's tax basis in its shares until such basis
is reduced to zero, and thereafter as gain from the sale or exchange of such
shares.
Each Fund will be subject to a nondeductible 4% excise tax if it fails
to meet certain requirements with respect to distributions of net ordinary
income and capital gain net income. It is anticipated that this provision will
not materially affect the Funds or their shareholders. Dividends declared in
October, November or December to shareholders on a date in any such month and
paid during January of the following year will be treated as received by the
shareholders on December 31 of the year declared.
The foregoing discussion of tax consequences is based on federal tax
laws and regulations in effect on the date of this Statement of Additional
Information, which are subject to change by legislative or administrative
action.
DESCRIPTION OF RATINGS OF CERTAIN FIXED INCOME SECURITIES
As set forth in the Prospectus under the caption "Investment
Objectives and Policies of the Funds," each Fund may invest in corporate notes,
bonds, debentures, convertible debt securities and convertible preferred stocks
that are assigned specified ratings of either Standard & Poor's Ratings Services
("S&P") or Moody's Investors Service, Inc. ("Moody's"). A brief description of
the ratings symbols and their meanings follows.
B-19
<PAGE> 43
DEBT SECURITIES
STANDARD & POOR'S RATINGS SERVICES. An S&P corporate debt rating is a
current assessment of the creditworthiness of an obligor with respect to a
specific obligation. This assessment may take into consideration obligors such
as guarantors, insurers or lessees.
The ratings are based, in varying degrees, on the following
considerations:
I. Likelihood of default - capacity and willingness of the obligor
as to the timely payment of interest and repayment of principal
in accordance with the terms of the obligation;
II. Nature of and provisions of the obligation; and
III. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws
affecting creditors' rights.
S&P's highest four rating categories are as follows:
AAA. Debt rated "AAA" has the highest rating assigned by S&P.
Capacity to pay interest and repay principal is extremely
strong.
AA. Debt rated "AA" has a very strong capacity to pay interest and
repay principal and differs from the higher rated issues only
in small degree.
A. Debt rated "A" has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in the higher rated categories.
BBB. Debt rated "BBB" is regarded as having an adequate capacity to
pay interest and repay principal. Whereas it normally exhibits
adequate protection parameters, adverse economic conditions or
changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for debt in this
category than in higher rated categories.
MOODY'S INVESTORS SERVICE, INC. The purpose of Moody's Ratings is to
provide investors with a simple system of gradation by which the relative
investment qualities of bonds may be noted. Moody's highest four rating
categories are as follows:
Aaa. Bonds which are rated Aaa are judged to be the best quality.
They carry the smallest degree of investment risk and are
generally referred to as "gilt edge."
B-20
<PAGE> 44
Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes
as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa. Bonds which are Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are
generally known as high grade bonds. They are rated lower than
the best bonds because margins of protection may not be as
large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other
elements present which make the long term risks appear somewhat
larger than in Aaa securities.
A. Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and interest
are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa. Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly
secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as
well.
PREFERRED STOCK
STANDARD & POOR'S RATINGS SERVICES. An S&P preferred stock rating is
an assessment of the capacity and willingness of an issuer to pay preferred
stock dividends and any applicable sinking fund obligations. A preferred stock
rating differs from a bond rating inasmuch as it is assigned to an equity issue,
which issue is intrinsically different from, and subordinated to, a debt issue.
Therefore, to reflect this difference, the preferred stock rating symbol will
normally not be higher than the bond rating symbol assigned to, or that would be
assigned to, the senior debt of the same issuer.
The preferred stock ratings are based on the following considerations:
I. Likelihood of payment - capacity and willingness of the issuer
to meet the timely payment of preferred stock dividends and any
applicable sinking fund requirements in accordance with the
terms of the obligation.
II. Nature of, and provisions of, the issue.
B-21
<PAGE> 45
III. Relative position of the issue in the event of bankruptcy,
reorganization, or other arrangements affecting creditors'
rights.
S&P's highest four rating categories for preferred stock are as
follows:
AAA. This is the highest rating that may be assigned by S&P to a
preferred stock issue and indicates an extremely strong
capacity to pay the preferred stock obligations.
AA. A preferred stock issue rated "AA" also qualifies as a
high-quality fixed income security. The capacity to pay
preferred stock obligations is very strong, although not as
overwhelming as for issues rated "AAA."
A. An issue rated "A" is backed by a sound capacity to pay the
preferred stock obligations, although it is somewhat more
susceptible to the adverse effects of changes in circumstances
and economic conditions.
BBB. An issue rated "BBB" is regarded as backed by an adequate
capacity to pay the preferred stock obligations. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely
to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.
MOODY'S INVESTORS SERVICE, INC. Because of the fundamental
differences between preferred stocks and bonds, Moody's uses a variation of its
bond rating symbols in the quality ranking of preferred stock. The symbols,
presented below, are designed by Moody's to avoid comparison with bond quality
in absolute terms. It should always be borne in mind that preferred stock
occupies a junior position to bonds within a particular capital structure and
that these securities are rated by Moody's within the universe of preferred
stocks.
Moody's highest four ratings for preferred stock are as follows:
aaa. An issue which is rated "aaa" is considered to be a top-quality
preferred stock. This rating indicates good asset protection
and the least risk of dividend impairment within the universe
of preferred stocks.
aa. An issue which is rated "aa" is considered a high-grade
preferred stock. This rating indicates that there is a
reasonable assurance that earnings and asset protection will
remain relatively well maintained in the foreseeable future.
a. An issue which is rated "a" is considered to be an upper-medium
grade preferred stock. While risks are judged to be somewhat
greater than in the
B-22
<PAGE> 46
"aaa" and "aa" classification, earnings and asset protection
are, nevertheless, expected to be maintained at adequate
levels.
baa. An issue which is rated "baa" is considered to be a medium
grade preferred stock, neither highly protected nor poorly
secured. Earnings and asset protection appear adequate at
present but may be questionable over any great length of time.
GENERAL
The S&P ratings, other than "AAA," may be modified by the addition of
a plus or minus sign to show relative standing within the major rating
categories.
Moody's security rating symbols, other than "Aaa," may contain
numerical modifiers of a generic rating classification. The modifier 1
indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.
The ratings of S&P and Moody's represent their opinions as to the
quality of the instruments rated by them. It should be emphasized that such
ratings, which are subject to revision or withdrawal, are general and are not
absolute standards of quality.
OTHER INFORMATION
As of February 28, 1997, the only person known to management to
beneficially own 5% or more of the outstanding shares of the Balanced Fund was
CAPINCO (5.22%), c/o Firstar Trust Company, P.O. Box 1787, Milwaukee, Wisconsin
53201-1787. Old Kent Bank, One Vanderburg Ctr., Grand Rapids, Michigan 49503,
was the holder of record of 6.26% of the outstanding shares of the Balanced Fund
as of that date.
As of February 28, 1997, the only person known to management to
beneficially own 5% or more of the outstanding shares of the Bond Fund was:
CAPINCO (67.37%), c/o Firstar Trust Company, P.O. Box 1787, Milwaukee, Wisconsin
53201-1787. Old Kent Bank, One Vandenberg Ctr., Grand Rapids, Michigan 49503,
was the holder of record of 11.85% of the outstanding shares of the Bond Fund as
of that date.
As of February 28, 1997, the only persons known to management to
beneficially own 5% or more of the outstanding shares of the Growth Fund were:
CAPINCO (14.63%), c/o Firstar Trust Company, P.O. Box 1787, Milwaukee, Wisconsin
53201-1787; and Anchorbank Growth (5.95%), held of record by Old Kent Bank, One
Vandenberg Ctr., Grand Rapids, Michigan 49503. Old Kent Bank, One Vandenberg
Ctr., Grand Rapids, Michigan 49503,
B-23
<PAGE> 47
was the holder of record of 20.58% of the outstanding shares of the Growth Fund
as of that date.
As of February 28, 1997, no person, other than those named in the
preceding three paragraphs, was known to the Funds to hold of record 5% or more
of the outstanding shares of any of the Funds.
The Prospectus and this Statement of Additional Information do not
contain all the information included in the Registration Statement filed with
the under the Securities Act of 1933 with respect to the securities offered by
the Prospectus. Certain portions of the Registration Statement have been
omitted from the Prospectus and this Statement of Additional Information
pursuant to the rules and regulations of the . The Registration Statement,
including the exhibits filed therewith, may be examined at the office of the
Securities and Exchange Commission in Washington D.C.
Statements contained in the Prospectus or in this Statement of
Additional Information as to the contents of any contract or other document
referred to are not necessarily complete, and, in each instance, reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement of which the Prospectus and this Statement of Additional
Information form a part, each such statement being qualified in all respects by
such reference.
FINANCIAL STATEMENTS
The financial statements and related report of Price Waterhouse LLP,
independent accountants, contained in the Annual Report for the fiscal year
ended November 30, 1996 are hereby incorporated by reference. A copy of the
Annual Report may be obtained without charge by writing to Thompson, Plumb &
Associates, Inc., 8201 Excelsior Drive, Suite 200, Madison, Wisconsin 53717, or
by calling Thompson, Plumb & Associates, Inc. at 608-831-1300.
B-24
<PAGE> 48
PART C
OTHER INFORMATION
_________________
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS.
The following financial statements of the Thompson Plumb Funds, Inc.
are included in the Prospectus dated March 31, 1997:
(1) Financial Highlights for the Thompson Plumb Balanced Fund for the
period from March 16, 1987 (commencement of operations) through
November 30, 1987 and for the fiscal years ended November 30,
1988, 1989, 1990, 1991, 1992, 1993, 1994, 1995, and 1996.
(2) Financial Highlights for the Thompson Plumb Bond Fund and the
Thompson Plumb Growth Fund for the period from February 10, 1992
(commencement of operations) through November 30, 1992 and for
the fiscal years ended November 30, 1993, 1994, 1995, and 1996.
The following financial statements of the Thompson Plumb Balanced
Fund, the Thompson Plumb Bond Fund and the Thompson Plumb Growth Fund are
incorporated by reference into the Statement of Additional Information dated
March 31, 1997:
(1) Report of Independent Accountants.
(2) Statement of Assets and Liabilities.
(3) Schedule of Investments.
(4) Statement of Operations.
(5) Statement of Changes in Net Assets.
(6) Notes to Financial Statements.
(7) Financial Highlights.
All other financial statements, schedules and historical financial
information have been omitted as the subject matter is not required, not
present, or not present in amounts sufficient to require submission.
(B) EXHIBITS.
See Exhibit Index following Signature Page to this Registration
Statement, which Exhibit Index is incorporated herein by this reference.
C-1
<PAGE> 49
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
None.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
The following table shows the number of shareholders of record for each of
the Funds as of December 31, 1996:
<TABLE>
<CAPTION>
SERIES NUMBER OF SHAREHOLDERS OF RECORD
- ------ --------------------------------
<S> <C>
Balanced Fund 512
Bond Fund 108
Growth Fund 392
</TABLE>
ITEM 27. INDEMNIFICATION.
Article V, Section 4 of the Registrant's Bylaws provides for
indemnification under certain circumstances of any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer of
the Registrant. However, no person shall be indemnified by the Registrant
against any liability to any of the Funds or its shareholders to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such person's office. A copy of such Bylaws, as amended and restated as of
January 21, 1991, is included as Exhibit 2 to Post-Effective Amendment No. 6 to
the Registrant's Registration Statement on Form N-1A (Registration No.
33-6418).
Paragraph 7 of the Investment Advisory Agreement between the Registrant and
Thompson, Plumb & Associates, Inc. (formerly Thompson, Unger & Plumb, Inc.)
provides for indemnification of Thompson, Plumb & Associates, Inc. by the Funds
or, in lieu thereof, contribution by the Funds under certain circumstances. A
copy of such Agreement, as amended and restated as of February 7, 1992, is
included as Exhibit 5 to Post-Effective Amendment No. 7 to the Registrant's
Registration Statement on Form N-1A.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indem-
C-2
<PAGE> 50
nification against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer, or controlling person of
the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISOR.
Thompson, Plumb & Associates, Inc., the Registrant's investment advisor,
is engaged in the investment advisory business. Set forth below is a list of
the directors and officers of Thompson, Plumb & Associates, Inc. and, with
respect to each such person, the name and business address of each other
company (if any) with which such person has been connected during the two years
ended November 30, 1995 and 1996, as well as the capacity in which such person
was connected.
<TABLE>
<CAPTION>
NAME POSITION WITH ADVISOR OTHER AFFILIATIONS
- ---- --------------------------- ---------------------------------
<S> <C> <C>
John W. Thompson President and Director Chairman, Secretary and Director
of the Registrant
Thomas G. Plumb Vice President and Director President, Treasurer and
Director of the Registrant
Connie M. Redman Corporate Secretary None
Penny M. Hubbard Assistant Vice President None
</TABLE>
ITEM 29. PRINCIPAL UNDERWRITERS.
(A) Not applicable.
(B) Not applicable.
(C) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.
The Amended and Restated Articles of Incorporation, Bylaws and minute book
of the Registrant are in the physical possession of Quarles & Brady, 411 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202. Accounts, books, records and
other documents required to be maintained under Section 31(a) relating to the
number of shares of the Registrant's common stock held by each shareholder of
record are in the physical possession of Firstar
C-3
<PAGE> 51
Trust Company, P.O. Box 701, Milwaukee, Wisconsin 53201. All other accounts,
books and other documents required to be maintained under Section 31(a) of the
Investment Company Act of 1940 and the Rules promulgated thereunder are in the
physical possession of Thompson, Plumb & Associates, Inc., 8201 Excelsior
Drive, Suite 200, Madison, Wisconsin 53717.
ITEM 31. MANAGEMENT SERVICES.
Not applicable.
ITEM 32. UNDERTAKINGS.
The Registrant hereby undertakes to furnish each person to whom a
Prospectus is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
C-4
<PAGE> 52
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 Amendment pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the City of Madison, State of Wisconsin, on the 31st
day of March, 1997.
THOMPSON PLUMB FUNDS, INC
By /s/ John W.Thompson
------------------------------
JOHN W. THOMPSON
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed on this 31st day of March, 1997,
by the following persons in the capacities indicated.
<TABLE>
<S> <C>
/s/ John W. Thompson Mary Ann Deibele+
- -------------------------------------------- --------------------------------
JOHN W. THOMPSON MARY ANN DEIBELE
Director, Chairman and Secretary Director
(Principal Executive Officer)
/s/ Thomas G. Plumb JOHN W. FELDT*
- -------------------------------------------- --------------------------------
THOMAS G. PLUMB JOHN W. FELDT
Director, President and Treasurer Director
(Principal Financial and Accounting Officer)
/s/ George H. Austin Donald A. Nichols*
- -------------------------------------------- --------------------------------
GEORGE H. AUSTIN DONALD A. NICHOLS
Director Director
</TABLE>
+*By: /s/ John W. Thompson
--------------------------------------
JOHN W. THOMPSON
+ Pursuant to Power of Attorney
dated January 26, 1995
* Pursuant to Power of Attorney
dated December 6, 1991
C-5
<PAGE> 53
THOMPSON PLUMB FUNDS, INC.
_____________________________________
EXHIBIT INDEX
TO
REGISTRATION STATEMENT ON FORM N-1A
_____________________________________
<TABLE>
<CAPTION>
EXHIBIT INCORPORATED HEREIN FILED
NUMBER DESCRIPTION BY REFERENCE TO HEREWITH
- ------- ----------- ------------------- --------
<S> <C> <C> <C>
1. Registrant's Amended X
and Restated Articles
of Incorporation, in
the form proposed for
adoption by
Shareholders on
January 21, 1992.
2. Registrant's Bylaws, Post-Effective
as amended and Amendment No. 6 to the
restated as of January Registrant's Registration
21, 1992, and Statement on From N-1A
presently in effect. (the "Registration Statement")
3. Not applicable.
4(a). Specimen stock Post-Effective
certificate for shares Amendment No. 6 to the
of Growth Fund. Registration
Statement.
4(b). Specimen stock Post-Effective
certificate for shares Amendment No. 6 to the
of Balanced Fund. Registration
Statement.
4(c). Specimen stock Post-Effective
certificate for shares Amendment No. 6 to the
of Bond Fund. Registration
Statement.
</TABLE>
C-6
<PAGE> 54
<TABLE>
<CAPTION>
EXHIBIT INCORPORATED HEREIN FILED
NUMBER DESCRIPTION BY REFERENCE TO HEREWITH
- ------- ----------- ------------------- --------
<S> <C> <C> <C>
5. Investment Advisory X
Agreement between
Registrant and
Thompson, Unger &
Plumb, Inc., as
amended and restated
as of February 7,
1992.
6. Not applicable.
7. Not applicable.
8. Custodian Agreement X
with Bank between
Registrant and First
Wisconsin Trust
Company, as amended
and restated as of
February 7, 1992.
9(a). Accounting Services X
Agreement between
Registrant and
Thompson, Unger &
Plumb, Inc., as
amended and restated
as of February 7,
1992.
9(b). Shareholder Services X
Agreement between
Registrant and
Thompson, Unger &
Plumb, Inc., as
amended and restated
as of February 7,
1992.
9(c) Operating Agreement X
between Registrant and
Charles Schwab & Co.,
Inc. dated as of
January 15, 1997.
</TABLE>
C-7
<PAGE> 55
<TABLE>
<CAPTION>
EXHIBIT INCORPORATED HEREIN FILED
NUMBER DESCRIPTION BY REFERENCE TO HEREWITH
- ------- ----------- ------------------- --------
<S> <C> <C> <C>
9(d) Confidentiality X
Agreement between
Registrant and Charles
Schwab & Co., Inc.
dated as of January
15, 1997.
9(e) Services Agreement X
between Registrant and
Charles Schwab & Co.,
Inc. dated as of
January 15, 1997.
9(f) Distribution and X
Servicing Agreement
between Registrant and
Portico Funds, Inc.
10. Consent of Quarles & Post-Effective
Brady. Amendment No. 6 to the
Registration
Statement.
11. Consent of Price X
Waterhouse.
12. Not applicable.
13. Subscription Agreement Post-Effective
between Registrant and Amendment No. 1 to the
Thompson, Unger & Registration
Plumb, Inc. (f/k/a FMI Statement.
Capital Management,
Inc.)
14(a). Form of Thompson, Post-Effective
Unger & Plumb Funds Amendment No. 8 to the
Individual Retirement Registration Statement
Account Custodial
Agreement and related
documents.
</TABLE>
C-8
<PAGE> 56
<TABLE>
<CAPTION>
EXHIBIT INCORPORATED HEREIN FILED
NUMBER DESCRIPTION BY REFERENCE TO HEREWITH
- ------- ----------- ------------------- --------
<S> <C> <C> <C>
14(b). Form of Thompson, Post-Effective
Unger & Plumb Amendment No. 7 to the
403(b)(7) Plan and Registration
related documents. Statement.
14(c). IRS Model 5305-SEP and Post-Effective
related documents. Amendment No. 7 to the
Registration
Statement.
14(d). Thompson Plumb & Post-Effective
Associates, Inc. Amendment No. 11 to
Prototype SEP IRA and the Registration
related documents. Statement.
15 Not applicable.
16(a). Schedule of X
computation of
performance data for
the Balanced Fund.
16(b). Schedule of X
computation of
performance data for
the Growth Fund.
16(c). Schedule of X
computation of
performance data for
the Bond Fund.
17(a). Financial Data x
Schedule for the
Balanced Fund
17(b). Financial Data x
Schedule for the
Growth Fund
17(c). Financial Data x
Schedule for the Bond
Fund
</TABLE>
C-9
<PAGE> 1
EXHIBIT 1
THOMPSON, UNGER & PLUMB FUNDS, INC.
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
These amended and restated articles of incorporation supersede and take
the place of the existing articles of incorporation, and any amendments
thereto, of Thompson, Unger & Plumb Fund, Inc.
Article 1
The name of the corporation (which is hereinafter called the
"Corporation") is Thompson, Unger & Plumb Funds, Inc.
Article 2
The period of corporate existence is perpetual.
Article 3
The purpose for which the Corporation is organized is to engage in any
lawful activity within the purposes for which corporations may be organized
under the Wisconsin Business Corporation law.
Article 4
A. The aggregate number of shares which the Corporation shall have
authority to issue is one hundred million (100,000,000), consisting of one
class only, designated as "Common Stocks", of the par value of $.001 per share
and of the aggregate par value of one hundred thousand dollars ($100,000). The
Corporation's Board of Directors may divide the Common Stock into series,
determine the number of shares of the series, the distinguishing designation
and the preferences, limitations and relative rights, in whole or in part, of
any such series. The following series have been designated, subject to the
authority of the Board of Directors to create additional series or to increase
or decrease the number of shares of Common Stock of a series:
Thompson, Unger & Plumb Growth Fund - 10,000,000 shares
Thompson, Unger & Plumb Balanced Fund - 10,000,000 shares
Thompson, Unger & Plumb Bond Fund - 10,000,000 shares
The remainder of the 70,000,000 shares of Common Stock may be issued by
the Board of Directors in such additional or other series as it may determine,
each comprised of such number of shares of Common Stock and having such
preferences, rights, voting powers, restrictions, limitations as to dividends,
<PAGE> 2
qualifications, and terms and conditions of redemption as shall be fixed and
determined from time to time by the Board of Directors. In addition, the Board
of Directors is expressly authorized to increase or decrease the number of
shares of Common Stock of any series, but the number of such shares of any
series shall not be decreased by the Board of Directors below the number of
shares thereof then outstanding.
Unless otherwise provided by the Board of Directors with respect to any
future series of shares of Common Stock which may be created, each series shall
have the following relative preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption, in addition to those provided in other subsections of this Article
4:
1. Assets Belonging to Series. All consideration received by the
Corporation for the issue or sale of shares to a particular series, together
with all assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever form the
same may be, shall irrevocably belong to that series for all purposes, subject
only to the rights of creditors, and shall be so recorded upon the books and
accounts of the Corporation. Such consideration, assets, income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, together
with any General Items allocated to that series as provided in the following
sentence, are hereby referred to as "assets belonging to" that series. In the
event that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular series ("General Items"), such General Items shall be allocated
by or under the supervision of the Board of Directors to and among any one or
more of the series established and designated from time to time in such manner
and on such basis as the Board of Directors in its sole discretion, deems fair
and equitable, and any General Items so allocated to a particular series shall
belong to that series. Each such allocation by the Board of Directors shall be
conclusive and binding for all purposes.
2. Liabilities Belonging to Series. The assets belonging to each
particular series shall be charged with the liabilities of the Corporation with
respect of that series and all expenses, costs, charges and reserves
attributable to that series, and any general liabilities, expenses, costs,
charges or reserves of the Corporation which are not readily identifiable as
belonging to any particular series shall be allocated and charged
-2-
<PAGE> 3
by or under the supervision of the Board of Directors to and among any one or
more of the series established and designated from time to time in such manner
and on such basis as the Board of Directors in its sole discretion, deems fair
and equitable. The liabilities, expenses, costs, charges and reserves allocated
and so charged to a series are referred to as "liabilities belonging to" that
series. Each allocation of liabilities, expenses, costs, charges and reserves
by the Board of Directors shall be conclusive and binding for all purposes.
3. Income Belonging to Series. The Board of Directors shall have full
discretion, to the extent not inconsistent with the Wisconsin Business
Corporation Law and the Investment Company Act of 1940 (the "1940 Act"), to
determine which items shall be treated as income and which items as capital;
and each such determination and allocation shall be conclusive and binding.
"Income belonging to" a series includes all income, earnings and profits
derived from assets belonging to that series, less any expenses, costs, charges
or reserves belonging to that series, for the relevant time period.
4. Dividends. Dividends and distributions on shares of Common Stock of a
particular series may be declared and paid with such frequency, in such form
and in such amount as the Board of Directors may from time to time determine.
Dividends may be declared daily or otherwise pursuant to a standing resolution
or resolutions adopted only once or with such frequency as the Board of
Directors may determine, after providing for actual and accrued liabilities
belonging to that series.
All dividends on shares of a particular series shall be paid only out of
the income belonging to that series and capital gains distributions on shares
of a particular series shall be paid only out of the capital gains belonging to
that series. All dividends and distributions on shares of a particular series
shall be distributed pro rata to the holders of that series in proportion to
the number of shares of that series held by such holders at the date and time
of record established for the payment of such dividends or distributions.
The Board of Directors shall have the power, in its sole discretion, to
distribute in any fiscal year as dividends, including dividends designated in
whole or in part as capital gains distributions, amounts sufficient, in the
opinion of the Board of Directors to enable the Corporation to qualify as a
regulated investment company under the Internal Revenue Code of 1986, or any
amended version thereof or any successor or comparable statute thereto, and
regulations promulgated thereunder, and to avoid liability of the Corporation
for federal income tax in respect of that year. However, nothing in the
foregoing shall limit the authority of the Board of Directors to make
distributions greater than or less than the amount necessary
-3-
<PAGE> 4
to qualify as a regulated investment company and to avoid liability of the
Corporation for such tax period.
Dividends and distributions may be paid in cash, property or shares of
Common Stock of a series, or a combination thereof, as determined by the Board
of Directors or pursuant to any program that the Board of Directors may have in
effect at the time. Any such dividend or distribution paid in shares of a
series will be paid at the current net asset value thereof as defined in
Section 4.B.
5. Liquidation. In the event of the liquidation of the Corporation or of
a particular series, the shareholders of each series that has been established
and designated and is being liquidated shall be entitled to receive, as a
series, when and as described by the Board of Directors, the excess of the
assets belonging to that series over the liabilities belonging to that series.
The holders of shares of any series shall not be entitled thereby to any
distribution upon liquidation of any other series. The assets distributable to
the shareholders of any particular series shall be distributed among such
shareholders in proportion to the number of shares of that series held by them
and recorded on the books of the Corporation. The liquidation of any
particular series in which there are shares then outstanding may be authorized
by vote of a majority of the Board of Directors then in office, subject to the
approval of a majority of the outstanding shares of that series, as defined in
the 1940 Act.
6. Voting. On each matter submitted to a vote of the shareholders, each
holder of a share of Common Stock shall be entitled to one vote for each share
outstanding in his name on the books of the Corporation, irrespective of the
series thereof, and all shares of all series shall vote as a single series
("Single Series Voting"); provided, however, that (a) as to any matter with
respect to which a separate vote of any series is required by the 1940 Act or
by the Wisconsin Business Corporation Law, such requirement as to a separate
vote by that series shall apply in lieu of Single Class Voting; (b) in the
event that the separate vote requirements of subsection (a) apply with respect
to one or more series, then, subject to (c), the shares of all other series
shall vote as a single series; and (c) as to any matter which does not affect
the interest of a particular series, only the holders of shares of one or more
affected series shall be entitled to vote.
7. Equality. All shares of Common Stock of each particular series shall
represent an equal proportionate interest in the assets belonging to that
series (subject to the liabilities belonging to that series), and each share of
any particular series shall be equal to each other share of that series.
-4-
<PAGE> 5
B. The Corporation may issue and sell shares of any series of its Common
Stock as its Board of Directors may determine; provided, however, that the
consideration per share to be received by the Corporation upon the sale of any
shares of its Common Stock shall not be less than the net asset value per share
of the series of such Common Stock determined in accordance with the
requirements of the 1940 Act and the applicable rules and regulations of
the (or any succeeding governmental authority) and in conformity with
generally accepted accounting principles. Subject to the suspension of such
right of redemption or postponement of the date of payment or satisfaction upon
redemption in accordance with the 1940 Act, each holder of a series of the
Common Stock of the Corporation, upon request and after complying with the
redemption procedures established by the Board of Directors, shall be entitled
to require the Corporation to redeem out of stated capital, capital surplus,
earned surplus or other legally available funds of that series all or any part
of the shares of Common Stock of that series standing in the name of such
holder on the books of the Corporation at the net asset value of such shares.
Such net asset value shall be determined in accordance with the requirements of
the 1940 Act and the applicable rules and regulations of the (or any
succeeding governmental authority) and in conformity with generally accepted
accounting principles. Any shares of its Common Stock redeemed by the
Corporation shall be deemed to be cancelled and restored to the status of
authorized but unissued shares of the particular series.
C. Each share of a series of Common Stock of the Corporation is subject to
redemption by the Corporation out of any of the sources referred to in clause B
above as to that particular series, at the price which would be applicable if
such share was then being redeemed by the holder thereof pursuant to the other
provisions of these Articles of Incorporation, at any time if the Board of
Directors determines in its sole discretion that failure to so redeem may have
materially adverse consequences to the holders of shares of the series of
Common Stock of the Corporation. In addition, the Corporation may redeem out
of any of such sources and at such price per share all of the shares of a
series of the Common Stock of the Corporation held by any holder if the value
of such shares held by such holder is less than the minimum amount established
from time to time by the By-laws.
D. The Board of Directors of the Corporation may, upon reasonable notice
to holders of shares of the Common Stock of the Corporation, impose a fee for
the redemption of shares, such fee to be not in excess of one percent (1.0%) of
the proceeds (before giving effect to such fee) thereof and to apply in the
case of such redemptions and under such terms and conditions as the Board shall
determine. The Board shall have authority to rescind the
-5-
<PAGE> 6
imposition of any such fee in its discretion and to re-impose the fee from time
to time upon reasonable notice.
E. Holders of shares of Common Stock shall not be entitled to any
preemptive right to acquire unissued shares or securities convertible into such
shares or carrying a right to subscribe to or acquire shares nor shall such
holders have any other preemptive rights.
F. Holders of shares of Common Stock shall not be entitled to exercise any
right to cumulative voting.
Article 5
The number of directors shall be such number as is fixed by or in the
manner provided in the By-laws.
Article 6
The Corporation, as to any or all series, may enter into, from time to
time, investment advisory and other agreements providing for the management and
supervision of the investments of the Corporation and the furnishing of
clerical and administrative services to the Corporation. The Corporation also
may enter into, from time to time, agreements providing for distribution,
custodial, transfer agency, registrar and/or disbursing agency services to the
Corporation, as to any or all series. Such agreements shall contain such
terms, provisions and conditions as the Board of Directors of the Corporation
may deem advisable.
Article 7
The address of the registered office of the Corporation is 8201 Excelsior
Drive, Madison, Wisconsin 53717, and the name of its agent at such address is
Thomas G. Plumb. The registered office is located in Dane County.
Article 8
These Articles may be amended in the manner authorized by the Wisconsin
Business Corporation Law at the time of amendment and all rights at any time
conferred upon the shareholders of the Corporation by these Articles are
granted subject to the provision of this Article 8.
Article 9
These Amended and Restated Articles of Incorporation have been adopted by
the Board of Directors and the shareholders of the Corporation in accordance
with Section 180.1003 of the Wisconsin Statutes and supersede and take the
place of the
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<PAGE> 7
heretofore existing Articles of Incorporation, and amendments thereto, of
Thompson, Unger & Plumb Fund, Inc.
IN WITNESS WHEREOF, the undersigned have caused these Amended and Restated
Articles of Incorporation to be executed by its duly authorized officer as of
this 22nd day of January, 1992.
THOMPSON, UNGER & PLUMB FUND, INC.
By /s/ Raymond F. Unger
-----------------------------------
Raymond F. Unger, President
ATTEST:
/s/ Thomas G. Plumb
-----------------------------------
Thomas G. Plumb, Secretary/Treasurer
THIS DOCUMENT WAS DRAFTED BY:
GONRAD G. GOODKIND, ESQ.
QUARLES & BRADY
411 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
-7-
<PAGE> 8
ARTICLES OF AMENDMENT
STOCK (FOR PROFIT)
A. Name of Corporation: Thompson, Unger & Plumb Funds, Inc.
-------------------------------------------
(prior to any change effected by this amendment)
Text of Amendment: Effective April 3, 1995, the Amended and
Restated Articles of Incorporation are amended as follows:
The name of the corporation is hereby changed to:
Thompson Plumb Funds, Inc.
Then names of the series of Common Stock designated in Article
4 are hereby changed to:
Thompson Plumb Growth Fund
Thompson Plumb Balanced Fund
Thompson Plumb Bond Fund
B. Amendment(s) to the articles of incorporation adopted on March 14, 1995
--------------
(date)
Indicate the method of adoption by checking the appropriate choice
below:
( ) By the Board of Directors (in accordance with sec. 180.1002,
Wis. Stats.)
OR
(X) By the Board of Directors and Shareholders (in accordance with
sec. 180.1003, Wis. Stats.)
OR
( ) By Incorporators or Board of Directors, before issuance of
shares (in accordance with sec. 180.1005, Wis. Stats.)
Executed on behalf of the corporation on 3/29/95
------------------------
(date)
Thomas G. Plumb
------------------------
(signature)
Thomas G. Plumb
------------------------
(printed name)
President
------------------------
(title)
D. This document was drafted by Lorraine J. Koeper
----------------------------------------
(name of individual required by law)
SEE REVERSE for Instructions, Suggestions, Filing Fees and Procedures
<PAGE> 9
ARTICLES OF AMENDMENT STOCK (FOR PROFIT)
Lorraine J. Koeper, Esq. ---Please indicate where you would like
Quarles & Brady the acknowledgement copy of the filed
411 East Wisconsin Avenue document sent. Please include complete
Milwaukee, WI 53202 name and mailing address.
Your phone number during the day: (414) 277-5321
INSTRUCTIONS (Ref. sec. 180.1006 Wis. Stats, for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. State the name of the corporation (before any changes effected by this
amendment) and the text of the amendment(s).
If an amendment provides for an exchange, reclassification or
cancellation of issued shares, state the provisions for implementing the
amendment if not contained in the amendment itself.
B. Enter the date of adoption of the amendment(s). If there is more than
one amendment, identify the date of adoption of each. Mark one of the three
choices to indicate the method of adoption of the amendment(s).
By Board of Directors - Refer to sec. 180.1002 Wis. Stats. for specific
information on the character of amendments that may be adopted by the Board of
Directors without shareholder action.
By Board of Directors and Shareholders - Amendments proposed by the
Board of Directors and adopted by shareholder approval. Voting requirements
differ with circumstances and provisions in the articles of incorporation. See
sec. 180.1003 Wis. Stats. for specific information.
By Incorporators or Board of Directors - Before issuance of shares -
See sec. 180.1005 Wis. Stats. for conditions attached to the adoption of an
amendment approved by a vote or consent of less than 2/3rds of the shares
subscribed to.
C. Enter the date of execution and the name and title of the person
signing the document. The document must be signed by one of the following: An
officer (or incorporator if directors have not been elected) of the corporation
or the fiduciary if the corporation is in the hands of a receiver, trustee, or
other court appointed fiduciary. At least one copy must bear an original
manual signature.
D. If the document is executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that it shall not be filed unless the name of the drafter (either an
individual or a governmental agency) is printed in a legible manner.
FILING FEES
Submit the document with a minimum filing fee of $40.00, payable to
SECRETARY OF STATE. If the amendment causes an increase in the number of
authorized shares, provide an additional fee of 1 cent for each new authorized
share. When the document has been filed, an acknowledgement copy stamped
"FILED" will be sent to the address indicated above.
<PAGE> 10
CERTIFICATE
This is to certify that the foregoing Restated Articles of Incorporation
A. ( ) Do not contain any amendment requiring shareholder approval, and
were adopted on _________________ by the board of directors or
incorporators.
OR
* In accordance with
B. (X) Contain one or more amendments to the Wisconsin Statute sec.
articles of incorporation -
(NOTE: Identify each article being amended, indicate 180. 180. 180.
the date and method of its adoption, and briefly state 1002 1003 1005
the substance of the change.)
AMENDMENT, adopted on 1/21/92 (method of adoption)
-------------- ( ) (X) ( )
(date) (check one box)
Article 1. Name changed to Thompson, Under & Plumb Funds, Inc.
AMENDMENT, adopted on 1/21/92 (method of adoption)
------------- ( ) (X) ( )
(date) (check one box)
Article 4. Reclassified capital from one class to series and adopted
provisions relating to assets, liabilities and income belonging to each
series, dividends, liquidations, voting and equality among such series.
AMENDMENT, adopted on 1/21/92 (method of adoption)
------------- ( ) (X) ( )
(date) (check one box)
Article 7. Changed address of registered office.
* 180.1002 - By Board of Directors
* 180.1003 - By Board of Directors and Shareholders
* 180.1005 - By Incorporators or Board of Directors, before issuance of
shares
Executed on behalf of the corporation on 1/22/92
----------------------
(date)
Thomas G. Plumb
-----------------------
(signature)
Thomas G. Plumb
-----------------------
(printed name)
Secretary - Treasurer
-------------------------
(title)
Please see instruction D
This document was drafted by Fredrick G. Lautz, Esq. (See instruction E)
SEE REVERSE for Instructions, Suggestions, Filing Fees and Procedures
<PAGE> 11
RESTATED ARTICLES OF INCORPORATION
Ch. 180 (Stock, for-profit)
======================================
Ronald J. Burtch
Legal Assistant --- Please indicate where you would like
Quarles & Brady the acknowledgement copy of the filed
411 East Wisconsin Avenue document sent. Please include complete
Milwaukee, WI 53202-4497 name and mailing address.
======================================
Your phone number during the day: (417) 277-5187
INSTRUCTIONS (Ref. sec. 180.1007 Wis. Stats. for document content)
Submit one original and one exact copy to Secretary of State, P.O. Box
7846, Madison, Wisconsin 53707-7846. The original must include an original
manual signature (sec. 180.0120(3)(c), Wis. Stats.)
A. Set forth the text of the restated articles.
B. Complete the Certificate to indicate the manner in which the restated
articles were adopted. Use section "A" or "B" and strike out the
section that does not apply.
C. If section "B" is used, provide detail on the manner in which the
amendment(s) were adopted, including the date of adoption for each
amendment, and mark one of the three choices to indicate the method of
adoption.
By Board of Directors - Refer to sec. 180.1002 Wis. Stats. for
specific information on the character of amendments that may be adopted
by the Board of Directors without shareholder action.
By Board of Directors and Shareholders - Amendments proposed by the
Board of Directs and adopted by shareholder approval. Voting
requirements differ with circumstances and provisions in the articles of
incorporation. See sec. 180.1003, Wis. Stats. for specific
information.
By Incorporation or Board of Directors - Before issuance of shares -
See sec. 180.1005 Wis. Stats. for conditions attached to the adoption of
an amendment approved by a vote or consent of less than 2/3rds of the
shares subscribed for.
If an amendment provides for an exchange, reclassification or
cancellation of issued shares, state the provisions for implementing the
amendment if not contained in the restatement itself. If an amendment
changes the name of the corporation, state the new name in Article 1
only.
D. Enter the date of execution and the name and title of the person
signing the document. The document must be signed by one of the
following: An officer, an incorporator (if directors have not been
elected and no shares have been issued), or the fiduciary if the
corporation is in the hands of a receiver, trustee, or other court
appointed fiduciary. At least one copy must bear an original manual
signature.
E. If the document executed in Wisconsin, sec. 14.38(14) Wis. Stats.
provides that is shall not be filed unless the name of the drafter
(either an individual or a governmental agency) is printed in a legible
manner.
FILING FEES Submit the document with a minimum filing fee of $40.00, payable
to SECRETARY OF STATE. If the restatement contains and amendment causing an
increase in the number of authorized shares, provide an additional fee of 1 cent
for each new authorized share. When the document has been filed, an
acknowledgement copy stamped "FILED" will be sent to the address indicated
above.
<PAGE> 1
EXHIBIT 5
ADVISORY AGREEMENT
AS AMENDED FEBRUARY 7, 1992
AMENDED AGREEMENT made this 7th day of February 1992 between THOMPSON,
UNGER & PLUMB FUNDS, INC., a Wisconsin corporation (the "Corporation"), and
THOMPSON, UNGER & PLUMB, INC., a Wisconsin corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Corporation is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Corporation is authorized to issue shares of its Common
Stock, $.001 par value per share (the "Shares") in one or more series; and
WHEREAS, the Corporation desires to retain the Adviser to render
investment advisory and administrative services to the Fund and the Adviser is
willing to render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser. The Corporation hereby appoints the Adviser
to act as investment adviser and to provide administrative services with respect
to the Series of Shares described on Exhibit A hereto (individually, a "Series"
and collectively, the "Fund") for the periods and on the terms herein set forth.
The Adviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided. Additional Series may be added
to this Agreement by amendment to Exhibit A and without the necessity for
reapproval of this Agreement by any Series already covered by this Agreement.
2. Delivery of Documents. The Fund has delivered (or will deliver as
soon as is possible) to the Adviser copies of each of the following documents:
(a) Amended and Restated Articles of Incorporation of the Corporation
as filed with the Secretary of State of Wisconsin and currently in effect
(such Amended and Restated Articles of Incorporation, as presently in
effect and as amended and/or restated from time to time, are herein called
the "Articles");
(b) By-Laws of the Corporation (such By-Laws, as presently in effect
and as amended from time to time, are herein called the "By-Laws");
<PAGE> 2
(c) Certified resolutions of the Board of Directors of the Corporation
approving the terms of this Agreement;
(d) Custodian Agreement With Bank between the Corporation and First
Wisconsin Trust Company (such Agreement, as presently in effect and as
amended and/or superseded from time to time, is herein called the
"Custodian Agreement");
(e) Shareholder Servicing Agent Agreement between the Corporation and
First Wisconsin Trust Company (such Agreement, as presently in effect and
as amended and/or superseded from time to time, is herein called the
"Shareholder Servicing Agreement");
(f) Accounting Services Agreement between the Corporation and the
Adviser (such Agreement, as presently in effect and as amended and/or
superseded from time to time, is herein called the "Accounting Services
Agreement"),
(g) Prospectus and Statement of Additional Information of the Fund
(such Prospectus and Statement of Additional Information, as presently in
effect and as amended, supplemented and/or superseded from time to time,
are herein called the "Prospectus" and "Additional Statement",
respectively);
(h) Registration Statement of the Fund under the Securities Act of
1933, as amended (the "1933 Act") and the 1940 Act on Form N-1A as filed
with the (the "Commission") on or about June 10, 1986, together with all
amendments to the date hereof (such Registration Statement, as presently in
effect and as amended from time to time, is herein called the "Registration
Statement").
The Fund agrees to promptly furnish the Adviser from time to time with
copies of all amendments of or supplements to or otherwise current versions of
any of the foregoing documents not heretofore furnished.
3. Duties of Adviser.
(a) Subject to the general supervision of the Board of Directors of
the Corporation, the Adviser shall manage the investment operations of the
Fund and the composition of the Fund's assets, including the purchase,
retention and disposition thereof. In this regard, the Adviser
(i) shall provide supervision of the Fund's assets, furnish a
continuous investment program for the Fund, determine from time to
time what investments
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<PAGE> 3
or securities will be purchased, retained or sold by the Fund, and
what portion of the assets will be invested or held uninvested as
cash;
(ii) shall place orders pursuant to its determinations either
directly with the issuer or with any broker and/or dealer who deals in
the securities in which the Fund is active. In placing orders, the
Adviser shall be entitled to rely upon the provisions of Section 28(e)
of the Securities Exchange Act of 1934, as amended;
(iii) may, on occasions when it deems the purchase or sale of a
security to be in the best interests of the Fund as well as its other
customers (including any other investment company or advisory account
for which the Adviser acts as adviser), aggregate, to the extent
permitted by applicable laws and regulations, the securities to be
sold or purchased in order to obtain a more favorable net price or
execution. In such event, allocation of the securities so purchased
or sold, as well as the expenses incurred in the transaction, will be
made by the Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to the Fund
and to such other customers.
(b) In addition, the Adviser shall, subject to the general
supervision of the Board of Directors of the Corporation, provide for the
administration of all other affairs of the Fund. In this regard, the
Adviser
(i) giving due recognition to the fact that certain of such
operations are performed by others pursuant to the Custodian Agreement
and the Shareholder Servicing Agreement (and the Accounting Services
Agreement to the extent that a person other than the Adviser is
serving as the Fund's accounting services agent), shall provide
supervision of all aspects of the Fund's operations not referred to in
paragraph 3(a) above;
(ii) shall, to the extent not provided pursuant to the Custodian
Agreement, the Shareholder Servicing Agreement or the Accounting
Services Agreement, provide the Fund with personnel to perform such
executive, administrative and clerical services as are reasonably
necessary to provide effective administration of the Fund;
-3-
<PAGE> 4
(iii) shall, to the extent not provided pursuant to the Custodian
Agreement, the Shareholder Servicing Agreement or the Accounting
Services Agreement, arrange for (A) the preparation for the Fund of
all required tax returns, (B) the preparation and submission of
reports to existing Shareholders, and (C) the periodic updating of the
Prospectus and Additional Statement and the preparation of reports
filed with the Commission and other regulatory authorities;
(iv) shall, to the extent not provided pursuant to the Custodian
Agreement, the Shareholder Servicing Agreement or the Accounting
Services Agreement, provide the Fund with adequate office space and
all necessary office equipment and services including telephone
service, heat, utilities, stationery supplies and similar items, in
Madison, Wisconsin.
(c) The Adviser, in the performance of its duties hereunder, shall act
in conformity with the Articles, ByLaws, Prospectus, Additional Statement
and Registration Statement and with the instructions and directions of the
Board of Directors of the Corporation, and will comply with and conform to
the requirements of the 1940 Act, the Investment Advisers Act of 1940 and
all other applicable federal and state laws, regulations and rulings.
(d) The Adviser shall render to the Board of Directors of the
Corporation such periodic and special reports as the Board may reasonably
request.
(e) The services of the Adviser hereunder are not deemed exclusive and
the Adviser shall be free to render similar services to others so long as
its services under this Agreement are not impaired thereby.
(f) Subject to Section 36 of the 1940 Act, the Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which this Agreement relates,
except liability to the Fund or the Shareholders to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
4. Expenses.
(a) During the term of this Agreement, the Adviser will pay all costs
incurred by it in connection with the performance of its duties under
paragraph 3 hereof, other
-4-
<PAGE> 5
than the cost (including taxes and brokerage commissions, if any) of
securities purchased for the Fund and the cost of the preparations,
submissions, updatings and filings referred to in paragraph 3(b)(iii).
(b) If, in any fiscal year, the sum of the expenses of a Series
(including the fee payable pursuant to paragraph 5 hereof, but excluding
taxes, interest, brokerage commissions relating to the purchase or sale of
portfolio securities, and, where permitted, extraordinary expenses such as
for litigation) exceeds the expense limitations applicable to the Series
imposed by state securities administrators, as such limitations may be
lowered or raised from time to time, the Adviser shall reimburse such
Series in the amount of such excess to the extent required by such expense
limitations.
(c) In addition to the foregoing, the Adviser may from time to time at
its option (but shall be under no obligation to) voluntarily assume or
undertake to reimburse a Series for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Adviser. Any such
voluntary assumption or undertaking may be discontinued or modified at any
time by the Adviser.
5. Compensation.
(a) For the services provided and the expenses assumed by the Adviser
pursuant to this Agreement, each Series will pay the Adviser, and the
Adviser agrees to accept as full compensation for all services rendered by
it hereunder, an annual management fee as shown on Exhibit A attached
hereto.
(b) The foregoing fee will be computed based on the value of net
assets on each day and will be paid to the Adviser monthly.
6. Books and Records. The Adviser shall maintain all of the Fund's
records (other than those maintained pursuant to the Custodian Agreement, the
Shareholder Servicing Agreement or the Accounting Services Agreement). The
Adviser agrees that all records which it maintains for the Fund are the
property of the Fund and it will surrender promptly to the Fund any of such
records upon the Fund's request. The Adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act any
such records as are required to be maintained by Rule 31a-1 of the Commission
under the 1940 Act.
7. Indemnification.
(a) The Fund hereby agrees to indemnify and hold harmless the Adviser,
its directors, officers and employees
-5-
<PAGE> 6
and each person, if any, who controls the Adviser (collectively, the
"Indemnified Parties") against any and all losses, claims, damages or
liabilities, joint or several, to which any such Indemnified Party may
become subject under the 1933 Act, the Securities Exchange Act of 1934 (as
amended), the 1940 Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon
(i) any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission to state a material
fact required to be stated or necessary to make the statements made
not misleading in (x) the Prospectus, Additional Statement or the
Registration Statement, (y) any advertisement or sales literature
authorized by the Fund for use in the offer and sale of the Shares, or
(z) any application or other document filed in connection with the
qualification of the Fund or its Shares under the Blue Sky or
securities laws of any jurisdiction, except insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission either pertaining to a failure to
disclose a breach of the Adviser's duties in connection with this
Agreement or the Accounting Services Agreement or made in reliance
upon and in conformity with information furnished to the Fund by or on
behalf of the Adviser for use in connection with any document referred
to in clauses (x), (y), or (z), or
(ii) subject in each case to clause (i) above, the Adviser acting
hereunder;
and the Fund will reimburse each Indemnified Party for any legal or other
expenses incurred by such Indemnified Party in connection with
investigating or defending any such loss, claim, damages, liability or
action; provided that any liability hereunder which relates to a particular
Series shall be satisfied solely from the assets of that Series.
(b) If the indemnification provided for in paragraph 7(a) is available
in accordance with the terms of such paragraph but is for any reason held
by a court to be unavailable from the Fund, then the Fund shall contribute
to the aggregate amount paid or payable by the Fund and the Indemnified
Parties as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect
(i) the relative benefits received by the Fund and such Indemnified Parties
in connection with the operations of the Fund,
-6-
<PAGE> 7
(ii) the relative fault of the Fund and such Indemnified Parties, and (iii)
any other relevant equitable considerations. The Fund and the Adviser
agree that it would not be just and equitable if contribution pursuant to
this subparagraph (b) were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable
considerations referred to above in this subparagraph (b). The aggregate
amount paid or payable as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subparagraph (b) shall be deemed to include any legal or other expenses
incurred by the Fund and the Indemnified Parties in connection with
investigating or defending any such loss, claim, damage, liability or
action. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(c) It is understood, however, that nothing in this paragraph 7 shall
protect any Indemnified Party against, or entitle any Indemnified Party to
indemnification against or contribution with respect to, any liability to
the Fund or its Shareholders to which such Indemnified Party is subject, by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of any reckless disregard of its
obligations and duties, under this Agreement, or otherwise to an extent or
in a manner inconsistent with Section 17(i) of the 1940 Act.
8. Duration and Termination. This Agreement originally became effective
as to the Thompson, Unger & Plumb Balanced Fund on March 13, 1987. This
Agreement shall become effective for the Thompson, Unger & Plumb Stock Fund and
the Thompson, Unger & Plumb Bond Fund and for any additional Series initiated
after the date of this Agreement, on the effective date of each such additional
Series' Registration statement with the U.S. Securities and Exchange Commission,
and shall, unless terminated as hereinafter provided, continue in effect for 18
months from effectiveness of this Agreement as to such series, and thereafter
shall continue automatically for periods of one year so long as each such latter
continuance is approved at least annually (a) by the vote of a majority of the
Directors of the Corporation who are not parties to this Agreement or interested
persons (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the Board
of Directors of the Corporation or by vote of a majority of the outstanding
Shares of the Series (as defined with respect to voting securities in the 1940
Act); provided, however, that (y) the continuance of this Agreement until 18
months from the effectiveness of this Agreement as to such series is, in
addition to the requirements set forth above, subject to the
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<PAGE> 8
approval of this Agreement by a majority of the outstanding Shares (as so
defined) of the additional Series on or before the first anniversary of the
date of the effectiveness of the first Registration Statement including such
Series, and (z) this Agreement may be terminated as to any Series at any time,
without the payment of any penalty, by the Board of Directors of the
Corporation or by vote of a majority of the outstanding Shares of the Series
(as so defined) on 60 days' written notice to the Adviser, or by the Adviser at
any time, without the payment of any penalty, on 60 days' written notice to
the Corporation. This Agreement will automatically and immediately terminate
in the event of its assignment (as defined in the 1940 Act).
9. Name of the Fund. The Adviser agrees that the words "Thompson, Unger &
Plumb" may be used in the name of the Corporation and any Series and that such
name, any related logos and any service marks containing the words "Thompson,
Unger & Plumb" may be used in connection with their business only for so long
as this Agreement (including any continuance or amendment hereof) remains in
effect and that such use shall be royalty free. At such time as this Agreement
shall no longer be in effect, the Fund will (to the extent it lawfully can)
cease such use. The Fund acknowledges that it has no rights to the name
"Thompson, Unger & Plumb," such logos or service marks other than those granted
in this paragraph and that the Adviser reserves to itself the right to grant
the nonexclusive right to use the words "Thompson, Unger & Plumb," such logos
or service marks to any other person, including, but not limited to, another
investment company.
10. Status of Adviser as Independent Contractor. The Adviser shall for
all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Board of Directors of
the Corporation from time to time, have no authority to act for or represent
the Corporation in any way or otherwise be deemed an agent of the Corporation.
11. Amendment of Aqreement. This Agreement may be amended by mutual
consent, but the consent of any Series must be approved (a) by vote of a
majority of those Directors of the Corporation who are not parties to this
Agreement or interested persons (as defined in the 1940 Act) of any such party,
cast in person at a meeting called for the purpose of voting on such amendment,
and (b) by vote of a majority of the outstanding Shares of such Series (as
defined with respect to voting securities in the 1940 Act).
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall
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<PAGE> 9
be held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be construed in accordance with applicable federal law and the laws of the State
of Wisconsin and shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, subject to paragraph 8 hereof.
Anything herein to the contrary notwithstanding, this Agreement shall not be
construed to require, or to impose any duty upon, either of the parties to do
anything in violation of any applicable laws or regulations. This Agreement
supersedes any prior agreement between the parties with respect to the subject
matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above
written.
ATTEST: THOMPSON, UNGER & PLUMB FUNDS, INC.
/s/ Thomas G. Plumb By /s/ Raymond F. Unger
---------------------------- -------------------------------
Thomas G. Plumb, Secretary Raymond F. Unger, President
ATTEST: THOMPSON, UNGER & PLUMB, INC.
/s/ Connie M. Redman By /s/ John W. Thompson
---------------------------- -------------------------------
Connie M. Redman, Secretary John W. Thompson, President
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<PAGE> 10
EXHIBIT A TO ADVISORY AGREEMENT
BETWEEN THOMPSON, UNGER & PLUMB FUNDS, INC.
AND
THOMPSON, UNGER & PLUMB, INC.
1. The Thompson, Unger & Plumb Growth Fund.
The management fee of this Series, calculated in accordance with
Paragraph 5 of the Advisory Agreement, shall be at the annual rate of
1.00% of the first $50 million of average daily net assets of the Series,
and 0.90 of 1% of average daily net assets in excess of $50 million.
2. The Thompson, Unger & Plumb Balanced Fund.
The management fee for this Series, calculated in accordance with
Paragraph 5 of the Advisory Agreement, shall be at the annual rate of
0.85 of 1% of the first $50 million of average daily net assets of the
Series, and 0.80 of 1% of average daily net assets in excess of $50
million.
3. The Thompson, Unger & Plumb Bond Fund.
The management fee for this Series, calculated in accordance with
Paragraph 5 of the Advisory Agreement, shall be at the annual rate of
0.65 of 1% of the first $50 million of average daily net assets of the
Series, and 0.60 of 1% of average daily net assets in excess of $50
million.
<PAGE> 1
EXHIBIT 8
AMENDED AND RESTATED
CUSTODIAN AGREEMENT WITH BANK
THIS AGREEMENT made this 7th day of February, 1992, between THOMPSON,
UNGER & PLUMB FUNDS, INC. (hereinafter called the "Corporation"), and FIRST
WISCONSIN TRUST COMPANY, a corporation organized under the laws of the State of
Wisconsin (hereinafter called "Custodian").
WITNESSETH
WHEREAS, the Custodian and the Corporation have entered into a
Custodian Agreement with Bank, dated June 6, 1986, pursuant to which the
Custodian serves as the custodian for the portfolio securities and other assets
of the only series currently offered by the Fund; and
WHEREAS, the Custodian and the Corporation wish to amend and restate
the Custodian Agreement with Bank to provide that the Corporation will serve in
like capacity for such additional series of the Corporation as may from time to
time be designated by the Corporation's Board of Directors and with respect to
which the Corporation's Board of Directors requests such services from the
Custodian and the Custodian consents to so serve.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Corporation and Custodian agree as follows:
1. DEFINITIONS.
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a written request or
direction or certification signed in the name of the Corporation by any two of
the Chairman of the Board, the President, a Vice President, the Secretary and
the Treasurer of the Corporation, or any other persons duly authorized to sign
by the Board of Directors of the Corporation.
<PAGE> 2
2. NAMES, TITLES AND SIGNATURES OF CORPORATION'S OFFICERS.
An officer of the Corporation will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Directors, together with any changes which may occur from time to time.
3. RECEIPT AND DISBURSEMENT OF MONEY.
A. Custodian shall open and maintain a separate account or accounts in
the name of each series of the Corporation identified on Attachment A to this
Agreement, as modified from time to time by the mutual consent of the parties
hereto (the "Series"), subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement. Custodian shall hold in such account
or accounts, subject to the provisions hereof, all cash received by it from or
for the account of the appropriate Series. Custodian shall make payments of
cash to, or for the account of, each Series from such cash only: (a) for the
purchase of securities for the portfolio of such Series upon the delivery of
such securities to Custodian, registered in the name of the appropriate Series
or of the nominee of Custodian referred to in Section 7 or in proper form for
transfer; (b) for the purchase or redemption of shares of the common stock of
such Series upon delivery thereof to Custodian; (c) for the payment of interest,
dividends, taxes, management or supervisory fees or operating expenses
(including, without limitation thereof, fees for legal, accounting, auditing and
custodial services and expenses for printing and postage); (d) for payment in
connection with the conversion, exchange or surrender of securities owned or
subscribed to by such Series held by or to be delivered to Custodian; or (e) for
other proper corporate purposes. Before making any such payment Custodian shall
receive (and may rely upon) an officers' certificate requesting such payment and
stating that it is for a purpose permitted under the terms of items (a), (b),
(c) or (d) of this Subsection A, and also, in respect of item (e), upon receipt
of an officers' certificate specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom such payment
is to be made.
An officer's certificate need not precede the disbursement of cash for
the purpose of purchasing a money market instrument if any one of the
Corporation's officers issues oral instructions to the Custodian and an
appropriate officers' certificate is received by the Custodian within two (2)
business days thereafter.
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<PAGE> 3
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of any Series of the Corporation.
4. RECEIPT OF SECURITIES.
Custodian shall hold in a separate account, and physically segregated
at all times from those of any other persons, firms or corporations, pursuant to
the provisions hereof, all securities received by it from or for the account of
any Series of the Corporation. All such securities are to be held or disposed
of by Custodian for, and subject at all times to the instructions of, the
Corporation pursuant to the terms of this Agreement. The Custodian shall have
no power or authority to assign, hypothecate, pledge or otherwise dispose of any
such securities and investments, except pursuant to the direction of the
Corporation and only for the account of the appropriate Series of the
Corporation as set forth in Section 5 of this Agreement.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES.
Custodian shall have sole power to release or deliver any securities
of any Series of the Corporation held by it pursuant to this Agreement.
Custodian agrees to transfer, exchange or deliver securities held by it
hereunder only: (a) for sales of such securities for the account of the
appropriate Series of the Corporation upon receipt by Custodian of payment
therefor; (b) when such securities are called, redeemed or retired or otherwise
become payable; (c) for examination by any broker selling any such securities in
accordance with "street delivery" custom; (d) in exchange for or upon conversion
into other securities alone or other securities and cash whether pursuant to any
plan of merger, consolidation, reorganization, recapitalization or readjustment,
or otherwise; (e) upon conversion of such securities pursuant to their terms
into other securities; (f) upon exercise of subscription, purchase or other
similar rights represented by such securities; (g) for the purpose of exchanging
interim receipts or temporary securities for definitive securities; (h) for the
purpose of redeeming in kind shares of common stock of a Series of the
Corporation upon delivery thereof to Custodian; or (i) for other proper
corporate purposes. As to any deliveries made by the Custodian pursuant to
items (a), (b), (d), (e), (f) and (g), securities or cash receivable in exchange
therefor shall be deliverable to Custodian. Before making any such transfer,
exchange or delivery, Custodian shall receive (and may rely upon) an officers'
certificate requesting such transfer, exchange or delivery, and stating that it
is for a purpose permitted under the terms of items (a), (b), (c), (d), (e),
(f),
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<PAGE> 4
(g) or (h) of this Section 5 and also, in respect of Item (i), upon receipt of
an officers' certificate specifying the securities to be delivered, setting
forth the purpose of which such delivery is to be made, declaring such purpose
to be a proper corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made.
An officers' certificate need not precede such transfer, exchange or
delivery of money market instruments if any one of the Corporation's officers
issues oral instructions to the Custodian and an appropriate officers'
certificate is received by the Custodian within two (2) business days
thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS.
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall:
(a) Present for payment all coupons and other income items held by it
for the account of any Series of the Corporation which call for payment
upon presentation and hold the cash received by it upon such payment for
the account of the appropriate Series of the Corporation; (b) collect
interest and cash dividends received, with notice to the Corporation, for
the account of the appropriate Series of the Corporation; (c) hold for the
account of the appropriate Series of the Corporation hereunder all stock
dividends, rights and similar securities issued with respect to any
security held by it hereunder; (d) execute as agent on behalf of the
appropriate Series of the Corporation all necessary ownership certificates
required by the Internal Revenue Code or the Income Tax Regulations of the
United States Treasury Department or under the laws of any state now or
hereafter in effect, inserting the name of the appropriate Series of the
Corporation on such certificates as the owner of the securities covered
thereby, to the extent it may lawfully do so.
7. REGISTRATION OF SECURITIES.
Except as otherwise directed by an officers' certificate, Custodian
shall register all securities, except such as are in bearer form, in the name of
a registered nominee of Custodian as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued thereunder or in any provision
of any subsequent Federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or Regulations or under the
laws of any state. Custodian shall use its best efforts to the end that the
specific
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<PAGE> 5
securities held by it hereunder shall be at all times identifiable in its
records.
The Corporation shall from time to time furnish to Custodian
appropriate instruments to enable Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee, any
securities which it may hold for the account of any Series of the Corporation
and which may from time to time be registered in the name of such Series.
8. DEPOSIT OF PORTFOLIO SECURITIES IN BOOK-ENTRY SYSTEMS.
The Custodian may deposit all or any part of the securities held by it
under the Custodian Agreement and eligible therefor in the Federal book-entry
system or any clearing agency acting as a securities depository ("Depository
System") covered by Rule 17f-4(b) under the Investment Company Act of 1940 (the
"1940 Act"). In the case of the Federal book-entry system, the Custodian may
deposit such securities through an agent which is qualified to act as a
custodian for investment companies under the 1940 Act. Any such deposits must
be made in compliance with the following:
(a) the Custodian and its agent shall comply in all respects with
clauses (d)(l) through (d)(4) of Rule 17f-4 under the 1940 Act;
(b) all books and records maintained by the Custodian and its agent
which relate to the Corporation's participation in such Depository Systems
will at all times during regular business hours be open to inspection by
the Corporation's duly authorized officers, employees, agents and auditors,
and the Corporation will be furnished with all the information in respect
of the services rendered to it as it may require;
(c) in connection with the use of such Depository Systems, the
Custodian will be liable to the Corporation for any losses or damages
relating to the failure to effectively enforce such rights as may exist
against such Depository Systems;
(d) payment for securities purchased for the account of any Series of
the Corporation shall be made only upon:
(i) receipt of advice from the Depository System that such
purchased securities have been transferred to the account (the
"Customer Only Account") contemplated by clause (d)(2) of Rule 17f-4
under the 1940 Act; and
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<PAGE> 6
(ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the appropriate
Series of the Corporation; and
(e) transfer of securities sold for the account of any Series of the
Corporation shall be made only upon:
(i) receipt of advice from the Depository System that payment for
such securities have been transferred to the Customer Only Account;
and
(ii) the making of an entry on the records of the Custodian to
reflect such transfer of sold securities and transfer of payment for
the account of the appropriate Series of the Corporation.
9. VOTING AND OTHER ACTION.
Neither Custodian or any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of any Series of the
Corporation, except in accordance with the instructions contained in an
officers' certificate. Custodian shall deliver, or cause to be executed and
delivered, to the Corporation all notices, proxies and proxy soliciting
materials with relation to such securities, such proxies to be executed by the
registered holder of such securities (if registered otherwise than in the name
of any Series of the Corporation), but without indicating the manner in which
such proxies are to be voted.
10. TRANSFER TAX AND OTHER DISBURSEMENTS.
The Corporation shall pay or reimburse Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder, and for
all other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptible transfer and/or deliveries of any such securities.
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<PAGE> 7
11. MISCELLANEOUS.
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board of Directors, and may rely on the genuineness of any such document which
it may in good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless Custodian and
its nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or by its
nominee in connection with the performance of this Agreement, except such as may
arise from its or its nominee's own negligent action, negligent failure to act
or willful misconduct. Custodian is authorized to charge any account of the
Corporation for such items. In the event of any advance of cash for any purpose
made by Custodian resulting from orders or instructions of the Corporation, or
in the event that Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Corporation or any Series
thereof shall be security therefor.
12. REPORTS BY CUSTODIAN.
Custodian shall furnish the Corporation weekly with a statement
summarizing all transactions and entries for the account of each Series of the
Corporation. Custodian shall furnish the corporation at the end of every month
with a list of the portfolio securities held for the account of each Series
showing the aggregate cost of each issue. Custodian shall furnish the
Corporation, at the close of each quarter of the Corporation's fiscal year, with
a list showing the cost of the securities held by it for the account of each
Series of the Corporation hereunder, adjusted for all commitments confirmed by
the Corporation as of such close, certified by a duly authorized officer of
Custodian. The books and records of Custodian pertaining to its actions under
this Agreement shall be open to inspection and audit at reasonable times by
officers of and auditors employed by the Corporation.
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<PAGE> 8
13. TERMINATION OR ASSIGNMENT.
This Agreement may be terminated by the Corporation, either in its
entirety or with respect to any one or more of the Series, or by Custodian, on
sixty days' notice, given in writing and sent by registered mail to Custodian at
P.O. Box 701, Milwaukee, Wisconsin 53201, or to the Corporation at 8201
Excelsior Drive, Madison, Wisconsin 53717, as the case may be. Upon any
termination of this Agreement, pending appointment of a successor to Custodian
or a vote of the shareholders of the affected Series of the Corporation to
dissolve or to function without a Custodian of its cash, securities and other
property, Custodian shall not deliver cash, securities or other property of any
such Series of the Corporation to the Corporation, but may deliver them to a
bank or trust company in the City of Milwaukee of its own selection, having an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than two million dollars ($2,000,000) as a Custodian for the
affected Series of the Corporation to be held under terms similar to those of
this Agreement; provided, however, that Custodian shall not be required to make
any such delivery or payment until full payment shall have been made by the
Corporation of all liabilities constituting a charge on or against the
properties then held by Custodian or on or against Custodian, and until full
payment shall have been made to Custodian of all its fees, compensation, costs
and expenses, subject to the provisions of Section 11 of this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Corporation, authorized or approved by a resolution of its Board of
Directors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of the
date first above written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
THOMPSON, UNGER & PLUMB FIRST WISCONSIN TRUST COMPANY
FUNDS, INC.
By: /s/ Raymond F. Unger By: /s/ Joe D. Redwine
- ------------------------------ -------------------------------
Raymond F. Unger, President Joe D. Redwine, Vice President
Attest: /s/ Thomas G. Plumb Attest: /s/ Mary E. Klabunde
-------------------------- ------------------------
Thomas G. Plumb, Secretary Mary E. Klabunde, Trust Officer
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<PAGE> 9
ATTACHMENT A
This Agreement shall apply with respect to the following Series of the
Corporation:
1. The Thompson, Unger & Plumb Growth Fund.
2. The Thompson, Unger & Plumb Balanced Fund.
3. The Thompson, Unger & Plumb Bond Fund.
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<PAGE> 1
EXHIBIT 9(a)
AMENDED AND RESTATED
ACCOUNTING SERVICES AGREEMENT
AGREEMENT made this 7th day of February, 1992 between THOMPSON, UNGER
& PLUMB FUNDS, INC., a Wisconsin corporation (the "Fund"), and Thompson, Unger &
Plumb, Inc., a Wisconsin corporation ("TUP").
WITNESSETH
WHEREAS, the Fund is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), and is authorized to issue its shares of capital stock in one or
more series, as designated from time to time by the Fund's Board of Directors;
WHEREAS, the Fund has retained TUP to render investment advisory and
administrative services to various series of the Fund and TUP has agreed to
render such services;
WHEREAS, the Agent and the Fund have entered into an Accounting
Services Agreement, dated March 13, 1987, pursuant to which TUP provides certain
accounting services to the only series currently offered by the Fund; and
WHEREAS, TUP and the Fund wish to amend and restate the Accounting
Services Agreement to provide that TUP will provide similar services to such
additional series of the Fund as may from time to time be designated by the
Fund's Board of Directors and with respect to which the Fund's Board of
Directors requests such services from TUP and TUP consents to so serve.
NOW THEREFORE, in consideration of the premise and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. APPOINTMENT. The Fund hereby appoints TUP to act as accounting
services agent to provide the services described herein regarding accounting,
bookkeeping and pricing of shares (the "Services") for the periods and on the
terms herein set forth, for each series of the Fund identified on Attachment A
to this Agreement, as modified from time to time by the mutual consent of the
parties (the "Series"). TUP accepts such appointment and agrees to render the
Services for the compensation herein provided.
<PAGE> 2
2. SERVICES.
(a) TUP shall prepare the financial statements of each Series at the
times and in the form as required by the 1940 Act, and TUP shall also prepare
financial statements for each Series at such times (not more frequently than
monthly) and in such form as the Fund may reasonably request. In so preparing
the financial statements, each Series shall have, at the Fund's expense, the
assistance of the Fund's independent public accountants.
(b) TUP shall maintain and keep current all of the accounts, books and
other documents specified in paragraph (a) and in paragraphs (b)(1) through (8)
of Rule 31a-1 under the 1940 Act except for those maintained pursuant to the
Custodian Agreement With Bank and Shareholder Servicing Agent Agreement, each of
which is between the Fund and First Wisconsin Trust Company and is dated June 6,
1986, as amended and restated as of the date of this Agreement.
(c) TUP shall calculate the net asset value per share of each Series
at the times and in the manner described in the Fund's Prospectus and Statement
of Additional Information, as presently in effect, and as amended, supplemented
and/or superseded from time to time (hereinafter referred to, respectively, as
the "Prospectus" and the "Additional Statement"). In so calculating the net
asset value per share of each Series, TUP shall be responsible for determining
the value of the portfolio securities of each Series in the manner described in
the Prospectus and Additional Statement. If an independent pricing service is
used by TUP to determine such values, the expense of such service shall be borne
by the appropriate Series. TUP shall prepare and maintain price make-up sheets
and such other records as are necessary to reflect the determination of the net
asset value per share for each Series.
(d) TUP agrees that all books, accounts and other documents which it
maintains for each Series are the property of the Fund and it will surrender
promptly to the Fund any of such books, accounts and other documents upon the
Fund's request. Such books, accounts and other documents shall be maintained by
TUP in accordance with and for the time periods specified by applicable rules
and regulations, including Rule 31a-2 under the 1940 Act.
(e) In addition, TUP shall maintain such staff and employ or retain
such personnel and consult with such other persons as shall from time to time be
reasonably necessary to perform the Services .
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<PAGE> 3
(f) TUP shall provide the Fund with such office space, facilities and
equipment as shall be reasonably necessary to perform the Services.
(g) TUP, in the performance of its duties hereunder, shall act in
conformity with the Prospectus and Additional Statement and with the
instructions and directions of the Board of Directors of the Fund, and will
comply with and conform to the requirements of the 1940 Act, the Investment
Advisers Act of 1940 and all other applicable federal and state laws,
regulations and rulings.
(h) TUP shall render to the Board of Directors of the Fund such
periodic and special reports as the Board may reasonably request.
3. EXPENSES. During the term of this Agreement, TUP will pay all costs
incurred by it in connection with the performance of the Services except as
otherwise expressly provided herein.
4. COMPENSATION. As full compensation for TUP providing the Services and
assuming the expenses pursuant to this Agreement, each Series will pay TUP a
fee equal to $60 per day for each day on which the Series' net asset value per
share is determined. The foregoing fee will be payable monthly.
5. DURATION AND TERMINATION. This Agreement shall continue in full force
and effect until terminated as hereinafter provided, may be amended at any time
by mutual agreement of the parties hereto and may be terminated by either party
on 60 days' written notice to the other party. The Fund may also terminate
this Agreement with respect to any one or more Series of the Fund on 60 days'
written notice to TUP, without affecting the effectiveness hereof with respect
to any other Series.
6. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be construed in accordance with
applicable federal law and the laws of the State of Wisconsin and shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors. Anything herein to the contrary notwithstanding, this
Agreement shall not be construed to require, or to impose any duty upon, either
of the parties to do anything in violation of any applicable laws or
regulations. This Agreement supersedes any prior agreement between the parties
with respect to the subject matter hereof.
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<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first written above.
Attest: THOMPSON, UNGER & PLUMB
FUNDS, INC.
/s/ Thomas G. Plumb By: /s/ Raymond F. Unger
- -------------------------- ------------------------------
Thomas G. Plumb, Secretary Raymond F. Unger, President
Attest: THOMPSON, UNGER & PLUMB, INC.
/s/ Connie M. Redman By: /s/ John W. Thompson
- --------------------------- ------------------------------
Connie M. Redman, Secretary John W. Thompson, President
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<PAGE> 5
ATTACHMENT A
This Agreement shall apply with respect to the following Series of the
Fund:
1. The Thompson, Unger & Plumb Growth Fund.
2. The Thompson, Unger & Plumb Balanced Fund.
3. The Thompson, Unger & Plumb Bond Fund.
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<PAGE> 1
EXHIBIT 9(b)
AMENDED AND RESTATED
SHAREHOLDER SERVICING AGENT AGREEMENT
THIS AGREEMENT, made and entered into on this 7th day of February,
1992, by and between THOMPSON, UNGER & PLUMB FUNDS, INC. (hereinafter referred
to as the "Fund") and FIRST WISCONSIN TRUST COMPANY, a corporation organized
under the laws of the State of Wisconsin (hereinafter referred to as "Agent").
WITNESSETH:
WHEREAS, the Fund is an open-end management investment company which
is registered under the Investment Company Act of 1940, as amended, and is
authorized to issue its shares of capital stock in one or more series, as
designated from time to time by the Fund's Board of Directors;
WHEREAS, the Agent is a trust company and, among other things, is in
the business of administering transfer and dividend disbursing agent functions
for the benefit of its customers;
WHEREAS, the Agent and the Fund have entered into a Shareholder
Servicing Agent Agreement, dated June 6, 1986, pursuant to which the Agent
serves as the transfer and dividend disbursing agent of the only series
currently offered by the Fund; and
WHEREAS, the Agent and the Fund wish to amend and restate the
Shareholder Servicing Agent Agreement to provide that the Agent will serve in
like capacity for such additional series of the Fund as may from time to time be
designated by the Fund's Board of Directors and with respect to which the Fund's
Board of Directors requests such services from the Agent and the Agent consents
to so serve.
NOW, THEREFORE, the Fund and the Agent do mutually promise and agree
as follows:
1. EMPLOYMENT. The Fund hereby employs Agent to act as Shareholder
Servicing Agent for each of the series of the Fund listed on Attachment A, as
modified from time to time upon the mutual consent of the Fund and the Agent
(the "Series"). Agent shall, at its own expense, render the services and assume
the obligations herein set forth subject to being compensated therefor as herein
provided.
<PAGE> 2
2. AUTHORITY OF AGENT. Agent is hereby authorized by the Fund to receive
all cash which may from time to time be delivered to it by or for the account
of any Series of the Fund; to issue confirmations and/or certificates for
shares of capital stock of each Series of the Fund upon receipt of payment; to
redeem or repurchase on behalf of each Series of the Fund shares of capital
stock of such Series upon receipt of certificates properly endorsed or of
properly executed written requests as described in the Prospectus of the Fund,
and to act as dividend disbursing agent for each Series of the Fund.
3. DUTIES OF THE AGENT: Agent hereby agrees to:
(a) Process new accounts.
(b) Process purchases, both initial and subsequent in accordance with
conditions set forth in the Fund's prospectus as mutually agreed by the
Fund and the Agent.
(c) Transfer shares of capital stock of each Series to an existing
account or to a new account upon receipt of required documentation in good
order.
(d) Redeem uncertificated and/or certificated shares upon receipt of
required documentation in good order.
(e) Issue and/or cancel certificates as instructed; replace lost,
stolen or destroyed certificates upon receipt of satisfactory
indemnification or bond.
(f) Distribute dividends and/or capital gain distributions. This
includes disbursement as cash or reinvestment and to change the
disbursement option at the request of shareholders.
(g) Process exchanges between the various Series of the Fund or
between a Series and another fund with whom the Fund has an exchange
arrangement (process and direct purchase/redemption and initiate new
account or process to existing account).
(h) Make miscellaneous changes to records, including, but not
necessarily limited to, address changes and changes in plans (such as
systematic withdrawal, dividend reinvestment, etc.)
(i) Prepare and mail a year-to-date confirmation and statement as each
transaction is recorded in a shareholder account as follows: original to
shareholder; duplicate confirmations to be available on request within
current year.
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<PAGE> 3
(j) Handle telephone calls and correspondence in reply to shareholder
requests except those items set forth in referrals to Fund.
(k) Reports to the Fund:
DAILY - transaction journal with analysis of accounts.
MONTHLY - analysis of transactions and accounts by types.
QUARTERLY - state sales analysis; sales by size; analysis of
systematic withdrawals, Keogh, IRA, Simplified Employee Benefit and
403(b)(7) plans; printout of shareholder balances.
(l) Daily control and reconciliation of shares of each Series of the
Fund with Agent's records and the Fund office records.
(m) Prepare address labels or confirmations for four reports to
shareholders per year.
(n) Mail and tabulate proxies for one meeting of shareholders each
year, including preparation of certified shareholder list for each Series
and daily report to Fund management, if required.
(o) Prepare and mail annual Form 1099, Form W-2P and 5498 to
shareholders of each Series to whom dividends or distributions are paid,
with a copy for the IRS.
(p) Provide readily obtainable data which may from time to time be
requested for audit purposes.
(q) Replace lost or destroyed checks.
(r) Continuously maintain all records for active and closed accounts.
(s) Furnish shareholder data information for a current calendar year
in connection with IRA and Keogh Plans in a format suitable for mailing to
shareholders.
4. REFERRALS TO FUND. Agent hereby agrees to ref er to the Fund for
reply the following:
(a) Requests for investment information, including performance and
outlook.
-3-
<PAGE> 4
(b) Requests for information about specific plans: (i.e., IRA, KEOGH,
Simplified Employee Benefit and 403(b)(7) Plans, Automatic Investment,
Systematic Withdrawal, etc.).
(c) Requests for information about exchanges between various Series of
the Funds or between a Series and another fund with whom the Fund has an
exchange arrangement.
(d) Requests for historical prices of any Series of the Fund.
(e) Requests for information about the value and timing of dividend
payments of a Series.
(f) Questions regarding correspondence from the Fund and newspaper
articles.
(g) Any requests for information from nonshareholders.
(h) Any other types of shareholder requests as the Fund may request
from Agent in writing.
5. COMPENSATION TO AGENT. Agent shall be compensated for its services
hereunder as may from time to time be agreed upon in writing between the two
parties. The Fund will reimburse Agent for all out-of-pocket expenses,
including, but not necessarily limited to, postage, confirmation forms, etc.
Special projects, not included in the fee schedule and requested by proper
instructions from the Fund, shall be completed by Agent and invoiced to the
Fund as mutually agreed upon.
6. RIGHTS AND POWERS OF AGENT. Agent's rights and powers with respect to
acting for and on behalf of the Fund, including rights and powers of Agent's
officers and directors, shall be as follows:
(a) No order, direction, approval, contract or obligation on behalf of
the Fund with or in any way affecting Agent shall be deemed binding unless
made in writing and signed on behalf of the Fund by an officer or officers
of the Fund who have been duly authorized to so act on behalf of the Fund
by its Board of Directors.
(b) Directors, officers, agents and shareholders of the Fund are or
may at any time or times be interested in Agent as officers, directors,
agents, shareholders, or otherwise. Correspondingly, directors, officers,
agents and shareholders of Agent are or may at any time or times be
interested in the Fund as directors, officers, agents, shareholders or
otherwise. Agent shall, if it so elects,
-4-
<PAGE> 5
also have the right to be a shareholder of one or more Series of the Fund.
(c) The services of Agent to the Fund are not to be deemed exclusive
and Agent shall be free to render similar services to others as long as its
services for others does not in any manner or way hinder, preclude or
prevent Agent from performing its duties and obligations under this
Agreement.
(d) The Fund will indemnify the Agent and hold it harmless from and
against all costs, losses, and expenses which may be incurred by it and all
claims and liabilities which may be asserted or assessed against it as a
result of any action taken by it without negligence and in good faith, and
for any act, omission, delay or refusal made by the Agent in connection
with this agency in reliance upon or in accordance with any instruction or
advice of any duly authorized officer of the Fund.
7. EFFECTIVE DATE. This Agreement shall become effective as of the date
written above.
8. TERMINATION OF AGREEMENT. This Agreement shall continue in force and
effect until terminated or amended to such an extent that a new Agreement is
deemed advisable by either party. Notwithstanding anything herein to the
contrary, this Agreement may be terminated at any time, without payment of any
penalty, by the Fund with respect to any one or more Series or in its entirety,
or by the Agent, upon ninety (90) days' written notice to the other party.
9. AMENDMENT. This Agreement may be amended by mutual written consent of
the parties. If, at any time during the existence of this Agreement, the Fund
deems it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the or state regulatory agencies or other governmental
authority, or to obtain any advantage under state or federal laws, and shall
notify Agent of the form of amendment which it deems necessary or advisable and
the reasons therefor, and if Agent declines to assent to such amendment, the
Fund may terminate this Agreement forthwith.
10. NOTICE. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, addressed and
delivered, or mailed postpaid to the other party at the principal place of
business of such party.
-5-
<PAGE> 6
THOMPSON, UNGER & PLUMB FIRST WISCONSIN TRUST
FUNDS, INC. COMPANY
By: /s/ Raymond F. Unger By: /s/ Joe D. Redwine
- ------------------------------ -------------------------------
Raymond F. Unger, President Joe D. Redwine, Vice President
Attest: /s/ Thomas G. Plumb Attest: /s/ Mary E. Klabunde
-------------------------- ------------------------
Thomas G. Plumb, Secretary Mary E. Klabunde, Trust Officer
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<PAGE> 7
ATTACHMENT A
This Agreement shall apply with respect to the following Series of the
Fund:
1. The Thompson, Unger & Plumb Growth Fund.
2. The Thompson, Unger & Plumb Balanced Fund.
3. The Thompson, Unger & Plumb Bond Fund.
-7-
<PAGE> 1
EXHIBIT 9(c)
OPERATING AGREEMENT
This Agreement is made as of January 15, 1997, between Charles Schwab
& Co., Inc. ("Schwab"), a California corporation, and each registered investment
company executing this Agreement ("Fund Company"), on its own behalf and on
behalf of each of its series or classes of shares listed on Schedule I, as
amended from time to time (such series or classes being referred to as
"Fund(s)"). In the event there are no series or classes of shares listed on
Schedule I, then the term "Fund(s)" shall mean "Fund Company".
WHEREAS Fund Company wishes to have shares of the Fund(s) available
for purchase and redemption by Schwab's brokerage customers through Schwab's
Mutual Fund Marketplace(R) ("MFMP");
WHEREAS certain policies, procedures and information are necessary to
enable the Fund(s) to participate in the MFMP; and
WHEREAS Schwab is willing to permit the Fund(s) to participate in its
MFMP pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises set forth below, the parties agree as follows:
1. Operating Procedures
Schwab will open an omnibus account (the "Account") with each Fund
through which it will purchase and redeem shares, settle transactions, reconcile
transactions, obtain pricing, reinvest distributions and maintain records in
accordance with the Operating Procedures set forth in Exhibit A hereto. In
addition, the parties agree to transfer accounts, communicate with Fund
shareholders and perform other obligations in accordance with the Operating
Procedures.
2. Qualification Requirements
a. Schwab will only place purchase orders for shares of a Fund on
behalf of a customer whose account address recorded on Schwab's books is in a
state or other jurisdiction in which Fund Company has advised Schwab that such
Fund has qualified its shares for sale under applicable law. Fund Company shall
advise Schwab immediately if any such qualification is terminated or if it
wishes Schwab not to place purchase orders for a Fund on behalf of its customers
who reside in a particular state or other jurisdiction.
b. Schwab will, upon request, (i) furnish Fund Company with monthly
written statements of the number of shares of each Fund purchased on behalf of
Schwab customers
<PAGE> 2
resident in one or more states or other jurisdictions indicated by Fund Company
or (ii) on a daily basis, transmit to an electronic database provider with whom
Schwab has established effective systems interfaces information regarding the
number of shares of each Fund sold in each state for retrieval by Fund Company.
Fund Company shall be responsible for all reasonable fees and other reasonable
charges of such database provider in connection with Schwab's transmission of
such information to and Fund Company's retrieval of such information from such
database provider.
c. Fund Company agrees that any rescission offer that is made to
shareholders who own shares directly with a Fund will also be made to Schwab
customers who would be entitled to such rescission offer if they owned shares
directly with the Fund. Fund Company will provide Schwab with a letter on Fund
Company letterhead containing the terms of any such rescission offer, and Schwab
may send this writing, or any derivation thereof, to the affected Schwab
customers. To assist Fund Company in effecting any such rescission offer,
Schwab agrees to provide Fund Company with relevant information regarding any
affected Schwab customer, including the account number, the number of shares
purchased and redeemed, if any, the dates of the purchase(s) and redemption(s),
if any, and the dollar amount of such transactions.
3. Compliance Responsibilities
a. Fund Company is responsible for (i) the compliance of each
prospectus, registration statement, annual or other periodic report, proxy
statement and item of advertising or marketing material of or relating to each
Fund with all applicable laws, rules and regulations (except for advertising or
marketing material prepared by Schwab that was not published or provided to
Schwab by or on behalf of Fund Company or any Affiliate (defined below) or
accurately derived from information published or provided by or on behalf of
Fund Company or any Affiliate), (ii) the distribution and tabulation of proxies
in accordance with all applicable laws, rules and regulations (except for such
proxy related services provided by Schwab's mailing agent), (iii) the
registration or qualification of the shares of each Fund under all applicable
laws, rules and regulations, and (iv) the compliance by Fund Company and each
Affiliate of Fund Company, as that term is defined below, with all applicable
laws, rules and regulations (including the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Investment Advisers Act of 1940, as amended),
and the rules and regulations of each self-regulatory organization with
jurisdiction over Fund Company or Affiliate, except to the extent that the
failure to so comply by Fund Company or any Affiliate is caused by Schwab's
breach of this Agreement. An "Affiliate" of a person means (i) any person
directly or indirectly controlling, controlled by, or under common control with,
such person, (ii) any officer, director, partner, corporation, or employee of
such person, and (iii) if such person is an investment company, any investment
advisor thereof or any member of the advisory board thereof.
b. In the event that the Account holds five percent (5%) or more of
the outstanding Fund shares, Fund Company will be responsible for requesting
Schwab to confirm its status as shareholder of record and to confirm whether any
Schwab customer beneficially
2
<PAGE> 3
owns five percent (5%) or more of the outstanding Fund shares through its
Schwab brokerage account. For this purpose, Fund Company shall indicate in its
inquiry the number of Fund shares that equal five percent (5%) of outstanding
Fund shares. Schwab shall promptly reply to any such inquiries.
c. Schwab is responsible for Schwab's compliance with all applicable
laws, rules and regulations governing Schwab's performance under this Agreement,
except to the extent that Schwab's failure to comply with any law, rule or
regulation is caused by Fund Company's breach of this Agreement, or its willful
misconduct or negligence in the performance or failure to perform its
obligations under this Agreement.
d. Except as set forth in this Agreement or as otherwise agreed upon
in writing by the parties, any communication, instruction or notice made
pursuant to this Agreement shall be made orally, provided that such oral
communication is on a recorded telephone line or is promptly confirmed in
writing by facsimile transmission. Schwab is entitled to rely on any
communications, instructions or notices which it reasonably believes were
provided to it by Fund Company, any Affiliate or their agents authorized to
provide such communications, instructions or notices to Schwab, and on
communications, instructions or notices provided to it by its customers. Fund
Company is entitled to rely on any communications, instructions or notices it
reasonably believes were provided to it by Schwab, or its agents authorized to
provide such communications, instructions or notices to Fund Company.
e. Except to the extent otherwise expressly provided in this
Agreement, neither party assumes any responsibility hereunder, or will be liable
to the other, for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control.
f. Fund Company and each Fund shall indemnify and hold harmless Schwab
and each director, officer, employee and agent of Schwab from and against any
and all losses, claims, liabilities and expenses (including reasonable
attorney's fees) ("Losses") incurred by any of them arising out of (i) any
untrue statement of material fact or any omission of a material fact necessary
in order to make the statements made, in light of the circumstances under which
they were made, not misleading in any prospectus, registration statement, annual
or other periodic report or proxy statement of the Fund or in any advertising or
promotional material published or provided to Schwab by or on behalf of Fund
Company or any Affiliate or accurately derived from information published or
provided by or on behalf of Fund Company or any Affiliate, (ii) any violation of
any law, rule or regulation relating to the registration or qualification of
shares of the Fund, (iii) any breach by Fund Company of any representation,
warranty or agreement contained in this Agreement, or (iv) any willful
misconduct or negligence by Fund Company or a Fund in the performance of, or
failure to perform, its obligations under this Agreement, except to the extent
such Losses are caused by Schwab's breach of this Agreement or its willful
misconduct or negligence in the performance, or failure to perform, its
obligations under this Agreement. This Section 3(f) shall survive termination
of this Agreement.
3
<PAGE> 4
4. Account Establishment and Maintenance Fees
The Fund Company shall pay to Schwab such fees as are set forth on
Schedule II hereto to reimburse Schwab for its costs in establishing and
maintaining Account(s) for each Fund. Fees attributable to establishment of the
Account(s) for a Fund shall be paid prior to establishment of the Account(s) for
the Fund. Fees attributable to maintaining the Account(s) for each Fund shall
be billed on an annual basis on December 31 and paid promptly, in no event later
than thirty (30) days after billing. Such payment shall be by wire transfer.
Such wire transfers shall be separate from wire transfers of redemption proceeds
or distributions under this Agreement.
5. Representations and Warranties
a. Fund Company represents and warrants to Schwab that each Fund is in
compliance with the conditions and qualifications set forth in Rule 2830 of the
Conduct Rules of the National Association of Securities Dealers, Inc. ("NASD"),
as amended from time to time ("Rule 2830"), which enable an NASD member to offer
or sell shares in the Fund. Fund Company represents and warrants that each Fund
marked with an asterisk on Schedule I is a "no load" or "no sales charge" Fund
as defined in Rule 2830. If a Fund, for any reason, fails to satisfy the terms
and conditions of Rule 2830, Fund Company will notify Schwab immediately of the
Fund's disqualification and the reason therefor.
b. Schwab represents and warrants that Schwab is a member of the NASD.
6. Use of Parties' Names
a. Without Schwab's prior written consent, Fund Company will not cause
or permit the use, description, or reference to Schwab, or to the relationship
contemplated by this Agreement in any advertisement or promotional materials or
activities.
b. Fund Company authorizes Schwab to use the names or other
identifying marks of Fund Company and Fund in connection with the operation of
the MFMP. Fund Company may withdraw this authorization as to any particular use
of any such name or identifying marks at any time (i) upon Fund Company's
reasonable determination that such use would have a material adverse effect on
the reputation or marketing efforts of Fund Company or such Fund, or (ii) if any
of the Funds cease to be available through the MFMP; provided, however, that
Schwab may, in its discretion, continue to use materials prepared or printed
prior to the withdrawal of such authorization or in the process of being
prepared or printed at the time of such withdrawal.
7. Proprietary Information
Each party hereto acknowledges that the identities of the other
party's customers, information maintained by such other party regarding those
customers, and all computer
4
<PAGE> 5
programs and procedures developed by such other party or such other party's
Affiliates or agents in connection with such other party's performance of its
duties hereunder constitute the valuable property of such other party. Each
party agrees that should it come into possession of any list or compilation of
the identities of or other information about the other party's customers, or any
other property of such party, pursuant to this Agreement or any other agreement
related to services under this Agreement, the party who acquired such
information or property shall use its best efforts to hold such information or
property in confidence and refrain from using, disclosing, or distributing any
of such information or other property, except (i) with the other party's prior
written consent, or (ii) as required by law or judicial process. Each party
acknowledges that any breach of the foregoing agreements as to another party
would result in immediate and irreparable harm to such other party for which
there would be no adequate remedy at law and agrees that in the event of such a
breach such other party will be entitled to equitable relief by way of temporary
and permanent injunctions, as well as such other relief as any court of
competent jurisdiction deems appropriate.
8. Assignability
This Agreement is not assignable by either party without the other
party's prior written consent, and any attempted assignment in contravention
hereof shall be null and void and not merely voidable; provided, however, that
Schwab may, without the consent of Fund Company, assign its rights and
obligations under this Agreement to any Affiliate.
9. Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be amended
from time to time, are by this reference incorporated into and made a part of
this Agreement. This Agreement (including the Exhibits and Schedule hereto)
constitutes the entire agreement between the parties as to the subject matter
hereof and supersedes any and all agreements, representations and warranties,
written or oral, regarding such subject matter made prior to the date on which
this Agreement has been executed and delivered by Schwab and Fund Company.
10. Amendment
This Agreement may be amended only by a writing executed by each party
hereto that is to be bound by such amendment, except as provided in this Section
10. Exhibit A and Schedule II may each be amended by Schwab on forty (40) days'
written notice to Fund Company or such earlier time as shall be agreed to by the
parties. Exhibits B and C shall be amended by Fund Company in the event of any
change to the information contained therein.
11. Governing Law
This Agreement shall be governed by and interpreted under the laws of
the State of California, applicable to contracts between California residents
entered into and to be performed entirely within the state.
5
<PAGE> 6
12. Counterparts
This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument.
13. Effectiveness and Termination
a. Upon Schwab's acceptance of Schedule I, as amended from time to
time, the effective date of this Agreement as to any Fund shall be the later of
the date on which this Agreement is made or the date set forth opposite the name
of the Fund on Schedule I.
b. This Agreement may be terminated as to any Fund by Schwab
immediately upon written notice to Fund Company. This Agreement may be
terminated as to any Fund by Fund Company upon thirty (30) days' written notice
to Schwab.
c. Upon the termination date for any Fund, Schwab will no longer make
the Fund shares available for purchase by Schwab's customers through the MFMP.
Schwab reserves the right to transfer the Fund shares of its customers out of
the Account. If Schwab continues to hold the Fund shares on behalf of its
customers in the Account, the parties agree to be obligated under, and act in
accordance with, the terms and conditions of this Agreement with respect to such
shares.
IN WITNESS WHEREOF, this Agreement has been executed by a duly
authorized representative of the parties hereto.
CHARLES SCHWAB & CO., INC. Thompson Plumb Funds, Inc. on it's
own behalf and on behalf of each
Fund listed on Schedule I hereto, as amended
from time to time
By:___________________________
Fred Potts
Vice President/Mutual Funds
Operations Administration By: /s/ Thomas G. Plumb
--------------------------------
Date: __________________________ Name: /s/ Thomas G. Plumb
--------------------------------
Title: President
--------------------------------
Date: January 15, 1997
--------------------------------
6
<PAGE> 7
SCHEDULE I
TO THE OPERATING AGREEMENT
Funds Effective Date
- ----- --------------
Thompson Plumb Balanced Fund* 1/15/97
Thompson Plumb Growth Fund* 1/15/97
* Indicates that Fund is a "no load" or "no sales charge" Fund as defined in
Rule 2830 of the NASD's Conduct Rules.
Thompson Plumb Funds, Inc., on its
-------------------------------------
Accepted by: own behalf and on behalf of each
Fund listed on Schedule I, as amended
from time to time
CHARLES SCHWAB & CO., INC.
By:__________________________ By: /s/ Thomas G. Plumb
Fred Potts --------------------------------------
Vice President/Mutual Funds Name: Thomas G. Plumb
Operations Administration --------------------------------------
Title: President
Date:________________________ --------------------------------------
Date: January 15, 1997
--------------------------------------
7
<PAGE> 8
SCHEDULE II
TO THE OPERATING AGREEMENT
Fees to Establish and Maintain Account(s) for a Fund
ESTABLISHMENT FEES
The Establishment Fee shall be $12,000 for the Account(s) for the initial
Fund established on Schwab's system, and $4,500 for the Account(s) for each
additional Fund, whether added at the same time or subsequent to the initial
Fund.
MAINTENANCE FEE
a. The Maintenance Fee as to the Account(s) for each Fund shall be charged
in advance, annually, on December 31 ("Assessment Date") commencing on the
first Assessment Date after the establishment of the Account(s) for the Fund on
the Schwab system. The Maintenance Fee as to the Account(s) of a Fund shall not
be prorated in the event of termination of this Agreement as to such Fund prior
to the end of a calendar year for which such Maintenance Fee has been charged.
b. The Maintenance Fees as to the Account(s) for each Fund shall be
determined based on the aggregate value of all shares of a Fund contained in
all Account(s) at the Fund on the Assessment Date. The Maintenance Fees are as
follows:
Aggregate Value
of All Shares Maintenance Fee
-------------------------------- ---------------
Up to and including $2.5 million $4,500
Over $2.5 million and up to and $3,000
including $5 million
Over $5 million $0
c. For purposes of this calculation, the value of the shares of each Fund
will be the net asset value reported by such Fund to the National Association
of Securities Dealers, Inc. Automated Quotation System. No adjustments will be
made to the net asset values to correct errors in the net asset values so
reported for any Assessment Date unless such error is
corrected and the corrected net asset value per share is reported to Schwab
before 5 o'clock, p.m., San Francisco time, on the next business day after the
Assessment Date to which the error relates.
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<PAGE> 9
EXHIBIT A
OPERATING PROCEDURES
1. The Account
a. Schwab will open an Account with each Fund. The Account shall be
registered:
Charles Schwab & Co., Inc.
Special Custody Account for the Exclusive Benefit of Customers
Attention: Mutual Funds
101 Montgomery Street
San Francisco, California 94104
The Account will be set up for the reinvestment of capital gains and dividend
distributions.
b. The Fund shall designate the Account with account numbers. Account
numbers will be the means of identification when the parties are transacting in
the Account.
c. The parties acknowledge that the Account is an omnibus account in
Schwab's name with shares held by any number of beneficial owners. Schwab
represents that the shares in the Account are customer securities and are
segregated from Schwab's own assets. Fund Company represents that the shares in
the Account are carried free of any charge, lien or payment of any kind in favor
of the Fund or any person claiming through the Fund.
d. The Account shall be kept open on the Fund's books regardless of a
lack of activity or small position size, except to the extent that Schwab takes
specific action to close the Account, or to the extent the Fund's prospectus
reserves the right to close accounts that are inactive. In the latter case, Fund
Company will give prior notice to Schwab before closing any Account.
e. Schwab has the right to open additional accounts from time to time
to accommodate other investment options and features, and to consolidate
existing accounts if and when appropriate to meet the needs of the MFMP. In the
event that it is necessary for Schwab to open an account with a Fund for the
payment of distributions in cash, the term "Account" shall mean both the account
for the reinvestment of capital gains and dividend distributions and the account
for the payment of distributions in cash.
f. Schwab reserves the right to issue instructions to each Fund to
move shares between the Account and any other account Schwab may open.
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<PAGE> 10
2. Purchase and Redemption Orders
For each day on which any Schwab customer places with Schwab a
purchase or redemption order for shares of a Fund, Schwab shall aggregate all
such purchase orders and aggregate all such redemption orders and communicate to
the Fund an aggregate purchase order and an aggregate redemption order. Schwab
will accept orders to purchase and redeem Fund shares from its customers no
later than 4:00 p.m. Eastern Time (market close). Schwab will communicate the
order to the Fund prior to a mutually agreed upon time.
3. Settlement of Transactions
a. Schwab will transmit the purchase price of the aggregate purchase
order to the Fund by wire transfer on the next business day after the trade
date. For purposes of this Agreement, a "business day" is any day the New York
Stock Exchange is open for trading.
b. For each business day on which Schwab places a redemption order for
a Fund within the time designated by the Fund, Fund Company will cause the
Fund(s) to send to Schwab the aggregate proceeds of all redemption orders for
the Fund(s) placed by Schwab on that day. Such redemption proceeds will be sent
by wire transfer on the next business day following the trade date for the
redemption orders; provided that Fund Company may, in its discretion, send such
proceeds by check if the aggregate amount is less than $250. Wire transfers of
redemption proceeds shall be separate from wire transfers for other purposes.
c. Each wire transfer of redemption proceeds shall indicate, on the
Fed Funds wire system, the amount thereof attributable to each Fund; provided,
however, that if the number of entries would be too great to be transmitted
through the Fed Funds wire system, Fund Company shall, on the day the wire is
sent, notify Schwab of such entries. The cost of the wire transfer is the
responsibility of the party sending the wire. The interest cost associated with
any delayed wire is the responsibility of the party sending the wire.
d. Should a Fund need to extend settlement on a trade, Fund Company
must contact Schwab on trade date to discuss the extension. For purposes of
determining the length of settlement, Fund Company agrees to treat shareholders
that hold Fund shares through the Account the same as it treats shareholders
that hold Fund shares directly with the Fund.
e. In the event that a Fund cannot verify redemption proceeds, Fund
Company will settle trades and forward redemption proceeds in accordance with
this Agreement based on the information provided by Schwab. Schwab will be
responsible for the accuracy of all trade information provided by it.
f. Fund Company represents that each Fund that has reserved the right
to redeem in kind has filed Form N-18F-1 with the Securities and Exchange
Commission. For purposes of complying with the Fund's election on Form N-18F-l,
Fund Company agrees that it will treat as a "shareholder" each shareholder that
holds Fund shares through the Account,
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<PAGE> 11
provided that Schwab provides to Fund Company, upon request, the name or account
number, number of Fund shares and other relevant information for each such
shareholder. Fund Company acknowledges that treatment of Schwab as the sole
shareholder of Fund shares held in the Account for purposes of applying the
limits in Rule 18f-1 under the 1940 Act would be inconsistent with the intent of
Rule 18f-1 and the Fund's election on Form N-18F-1 and could unfairly prejudice
shareholders that hold Fund shares through the Account.
4. Account Reconciliation Requirements
a. Schwab shall verify, on a next day basis, orders placed for the
Account with each Fund. All activity in the Account must be reflected.
Therefore, any "as of" activity must be shown with its corresponding "as of"
dates.
b. Schwab must receive statements on or before the eighth business day
of each month, even if there has been no activity in the Account during the
period, unless Schwab can verify transactions by direct or indirect systems
access.
c. The parties agree to notify each other and correct any error in the
Account with any Fund upon discovery. If an error is not corrected by the day
following discovery, each party agrees to make best efforts to avoid this from
hindering any routine daily operational activity.
5. Pricing
Every business day on which there is a transaction in the Account and
for each month-end business day, Fund Company will provide to Schwab prior to
7:00 p.m., Eastern Time, each Fund's closing net asset value and public offering
price (if applicable) for that day and/or notification of no price for that day.
Fund Company shall provide such information on a best efforts basis taking into
consideration any extraordinary circumstances arising at the Fund (e.g. natural
disasters, etc.).
6. Distributions
a. Fund Company shall provide distribution information to Schwab in a
timely manner to enable Schwab to pay distributions to its customers on or as
close to payable date as practicable. As to each Fund, Fund Company or such
Fund shall provide Schwab with (i) the record date, ex-dividend date, and
payable date with respect to a Fund as soon as practicable after it is
announced, but no later than three (3) business days prior to record date, (ii)
the record date share balance in the Account and the distribution rate per share
on the first business day after record date, and (iii) the reinvest price per
share as soon as it is available. Other distribution information required by
Schwab from time to time for payment of distributions to its customers shall be
provided by Fund Company on such dates as are agreed upon between Schwab and
Fund Company, but no later than payable date.
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<PAGE> 12
b. For purposes of effecting cash distributions for customers who have
elected to receive their capital gains distributions and/or dividends in cash,
prior to 10:00 a.m., Eastern Time, on the next business day following receipt of
the reinvest price per share as provided in paragraph 6(a)(iii) above, Schwab
shall notify Fund Company of the aggregate number of Fund shares with respect to
which the purchase is required to be voided. Fund Company agrees that the
purchase of such aggregate number of Fund shares may be voided. Fund Company or
such Fund shall wire the proceeds of such voided transaction from the Fund to
Schwab on the same business day. Schwab shall use such voided transaction
proceeds to pay the distribution in cash to Schwab customers who have elected to
receive such distributions in cash.
c. For each Fund that pays daily dividends, Fund Company shall provide
on a daily basis, the following record date information: daily rate, account
share balance, account accrual dividend amount (for that day), account accrual
dividend amount (for period to date), and account transfers and period-to-date
accrual amounts.
d. In the event that Schwab maintains an Account with a Fund for the
payment of distributions in cash, Fund Company shall wire, on payable date, any
cash distribution from the Fund to Schwab.
e. For each Fund that pays daily dividends, each Fund shall accrue
dividends, commencing on the settlement date for the purchase of Fund shares and
terminating on the trade date for the redemption of Fund shares.
f. For annual tax reporting purposes, Fund Company shall inform Schwab
of the portion of each Fund's distributions that include any of the following:
foreign source income, tax exempt income by state of origin or return of
capital.
g. In conformance with its status as a broker/dealer holding its
customers securities in street name, Schwab shall prepare and file with the
appropriate governmental agencies, such information, returns and reports as are
required to be so filed for reporting (i) dividends and other distributions
made, (ii) amounts withheld on dividends and other distributions and payments
under applicable federal and state laws, rules and regulations and (iii) gross
proceeds of sales transactions as required.
h. Upon notice from Fund Company, Schwab shall effect mergers, splits
and other reorganization activities of a Fund for its customers.
7. Price and Distribution Rate Errors
a. In the event adjustments are required to correct any error in the
computation of the net asset value or public offering price of a Fund's shares
or in the distribution rate for a Fund's shares, Fund Company shall notify
Schwab upon discovering the need for such adjustments. Notification can be made
orally, but must be confirmed in writing.
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<PAGE> 13
b. Schwab and Fund Company shall agree promptly and in good faith to a
resolution of the error, and no adjustment for the error shall be taken in the
Account until such agreement is reached. Following resolution, upon request by
Schwab, Fund Company shall provide Schwab with written notification of the
resolution. The letter shall be written on Fund Company letterhead and must
state for each day on which an error occurred the incorrect price or rate, the
correct price or rate, and the reason for the price or rate change. Fund
Company agrees that Schwab may send this writing, or derivation thereof, to
Schwab's customers whose accounts are affected by the price or rate change.
c. If a Schwab customer has received cash in excess of what he is
entitled, Schwab will, when requested by Fund Company, and to the extent
practicable and permitted by law, debit the customer's brokerage account in the
amount of such excess, but only to the extent of any cash in the account, and
repay it to the Fund. In no event, however, shall Schwab be liable to Fund
Company or the Fund for any such amounts. Upon the request of Fund Company,
Schwab shall provide Fund Company with the name of Schwab's customer and other
relevant information concerning the customer's brokerage account to assist Fund
Company in the collection from Schwab's customer of any such excess amount not
repaid to the Fund.
d. If adjustment is necessary to correct an error which has caused
Schwab's customers to receive dollars or shares less than that to which they are
entitled, the Fund shall, as appropriate and as mutually agreed by the parties
pursuant to 7(b) above, make all necessary adjustments to the number of shares
owned in the Account and/or distribute to Schwab any and all amounts of the
underpayment. Schwab will credit the appropriate amount of such shares or
payment to each Schwab customer.
e. For purposes of making adjustments, including the collection of
overpayments, Fund Company agrees to treat shareholders that hold Fund shares
through the Account the same as it treats shareholders that hold Fund shares
directly with the Fund. When making adjustments for an error, a Fund shall not
net transactions for that day in the Account.
8. Record Maintenance
a. Schwab shall maintain records for each of its customers who holds
Fund shares through the Account, which records shall include:
i. Number of shares;
ii. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and date and amounts of dividends paid
for at least the current year to date;
iii. Name and address of each of its customers, including zip codes
and social security numbers or taxpayer identification numbers;
iv. Records of distributions and dividend payments;
v. Any transfers of shares; and
vi. Overall control records.
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<PAGE> 14
b. Schwab will be responsible for accurately posting transactions in
Fund shares to its customers' brokerage accounts.
9. Transfer of Accounts
a. Fund Company agrees to transfer shares between accounts for Schwab
customers or other street name brokers held directly with a Fund and the Account
on the Fund's records. For the purpose of expediting direct transfers from
accounts for Schwab customers, Fund Company will accept by facsimile
transmission a summary sheet of information ("Summary Sheet") indicating the
customers' names, account numbers, the Fund affected and the number of shares to
be re-registered. For record keeping purposes, actual copies of transfer forms
will be forwarded to a Fund upon its request for such forms.
b. Schwab represents and warrants that for each transfer indicated in
the Summary Sheet, it holds each underlying instruction for re-registration
signed by its customer, and that its customer's signature on such instruction is
signature guaranteed by Schwab pursuant to the New York Stock Exchange's
Medallion Signature Program. Schwab will retain these documents for the period
required by any applicable law rule or regulation.
c. Schwab agrees to indemnify and hold harmless Fund Company, the Fund
and each director, officer, employee and agent of Fund Company ("indemnified
person") from and against any and all Losses incurred by any of them arising out
of the impropriety of any transfer effected by the Fund in reliance on the
Summary Sheet to the same extent as provided under the New York Stock Exchange's
Medallion Signature Program, except to the extent such Losses arise out of the
failure of any indemnified person to comply with the instructions on the summary
sheet of information.
d. Fund Company shall process all transfer requests into the
appropriate Account. Schwab as custodian is qualified to accept in the Accounts
shares from Fund IRA, Keogh or 401(k) accounts. At no time shall any Fund
establish separate accounts registered to Schwab for the benefit of individual
shareholders. In the event any such account is mistakenly opened, Schwab
reserves the right to instruct such Fund to move Fund shares to the Account.
e. Fund Company must confirm to Schwab the completion of each transfer
on the day it occurs. The confirming information shall include the number of
shares, date ("as of" date if unavoidable delay), transaction date, account
number of the customer and the Account, registration, accrued dividends and
account type (i.e., IRA, Keogh, 401(k), etc.).
f. Transfer processing after record date but prior to payable date
will include all accrued dividends. Each Fund is responsible for monitoring all
completed full transfers for "trailing" dividends. Should a "trailing" dividend
appear in an account, a Fund shall send such dividend to Schwab within five (5)
business days, along with a specific written notification thereof. Notification
shall include details of the dividend and customer, including the customer's
14
<PAGE> 15
social security number or taxpayer identification number, and/or the account
number for the Account to which the transfer was made.
g. If Schwab customers submit share certificates for transfer into
their Schwab brokerage accounts, Schwab will send such certificates, properly
endorsed to the applicable Fund, for transfer into the Account with such Fund.
Upon Schwab's request, Fund Company agrees to provide the status of said
certificates and book share balances.
10. Shareholder Communication
a. Fund Company shall arrange with Schwab, or a mailing agent
designated or approved by Schwab, for the distribution of the materials listed
below to all of Schwab's customers who hold Fund shares, which distribution
shall be so arranged by Fund Company as to occur immediately upon the effective
date of the materials:
i. All proxy or information statements prepared for circulation to
shareholders of record of such Fund;
ii. Annual reports;
iii. Semi-annual reports;
iv. Quarterly reports (if applicable); and
v. All updated prospectuses, supplements and amendments thereto.
Fund Company shall be responsible for providing the materials and for Schwab or
the mailing agent's fees in connection with this service as well as for timely
distribution. Fund Company agrees to have Schwab or the mailing agent
consolidate mailings of material to shareholders of more than one Fund if the
mailing is identical for all Funds in the Fund Company family.
b. In addition to the materials listed above, Fund Company agrees to
provide directly to Schwab all prospectuses, statements of additional
information and supplements and amendments thereto, and annual and other
periodic reports for each Fund in amounts reasonably requested by Schwab for
distribution to its customers. Fund Company is obligated to supply these
materials to Schwab in a timely manner so as to allow Schwab, at its own
expense, to send current prospectuses and statements of additional information
and periodic reports, immediately upon their effective dates, to customers and
prospective customers requesting them through Schwab. Schwab will also send a
current Fund prospectus with purchase trade confirmations for the initial
purchase of a Fund. Fund Company shall notify Schwab immediately of any change
to a Fund's prospectus.
c. If Schwab acts as clearing broker in an omnibus relationship with a
correspondent bank or broker ("Correspondent"), upon the request of Schwab, Fund
Company shall also provide to Schwab, in a timely manner, sufficient supplies of
Fund materials identified in Sections 10(a) and 10(b) for Schwab to give to
Correspondent for the distribution of such materials to Correspondent's
customers who hold Fund shares.
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<PAGE> 16
d. Fund Company shall ensure that the prospectus of each of its Funds
discloses that a broker may charge transaction fees on the purchase and/or sale
of Fund shares. Fund Company shall also ensure that either the prospectus, or
the statement of additional information if the statement of additional
information is incorporated in the prospectus, of each of its Funds discloses
(i) that the performance of the Fund may be compared in publications to the
performance of various indices and investments for which reliable performance
data is available, (ii) that the performance of the Fund may be compared in
publications to averages, performance rankings, or other information prepared by
recognized mutual fund statistical services, and (iii) that the annual report
contains additional performance information and will be made available to
investors upon request and without charge.
e. Schwab shall mail statements to its customers on a monthly basis
(or as to accounts in which there has been no activity in a particular month, no
less frequently than quarterly) showing, among other things, the number of
shares of each Fund owned by such customer and the net asset value of each such
Fund as of a recent date.
f. Schwab shall respond to customer inquiries regarding, among other
things, share prices, account balances, dividend amounts and dividend payment
dates. With respect to Fund shares purchased by customers after the effective
date of this Agreement, Schwab shall provide average cost basis reporting to
assist customers in the preparation of income tax returns.
11. New Processing Systems
Fund Company agrees to cooperate to the extent possible with Schwab as
Schwab develops and seeks to implement new processing systems for the MFMP.
16
<PAGE> 1
EXHIBIT 9(d)
CONFIDENTIALITY AGREEMENT
This Agreement is made as of the 15th day of January, 1997, between
Charles Schwab & Co., Inc. ("Schwab"), a California corporation, and Thompson
Plumb & Associates, Inc., ("Fund Affiliate), an affiliate of the registered
investment company(ies), listed on Schedule I of the Operating Agreement
between Schwab and Thompson Plumb Funds, Inc., made as of January 15, 1997.
RECITALS
A. Fund Affiliate wishes Schwab to provide it with the names and
addresses of investment managers and retirement plan administrators, whose
clients hold positions in any of the funds (as defined in the Operating
Agreement), for purposes of Fund Affiliate's direct marketing and communication
with these investment managers and retirement plan administrators and for
purposes of tracking the demographics of sale of the Fund shares. Fund
Affiliate mailings using this confidential, proprietary information may occur
through a mailing agent for the Fund Affiliate.
B. Subject to the terms and conditions herein or as may be mutually
agreed upon in writing from time to time, Schwab is willing to provide to Fund
Affiliate such confidential, proprietary information.
AGREEMENT
THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties agree as follows:
1. Definitions. As used in this Agreement, each of the following terms
will have the meaning ascribed thereto:
a. "Schwab Institutional Customer" means a Schwab customer who is an
investment manager or retirement plan administrator whose client(s) hold
position(s) in any of the Funds.
b. "Mailing Agent" means the person or entity with whom Fund Affiliate
contracts to act as its agent in performing mailings to Schwab Institutional
Customers and to whom Fund Affiliate provides names and addresses of Schwab
Institutional Customers received from Schwab under this Agreement.
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<PAGE> 2
c. "Objecting Customer" means any Schwab Institutional Customer who
has made objection to the release of his or her name or address.
d. "Proprietary Information" means the lists of names and addresses of
Schwab Institutional Customers, other than Objecting Customers, together with
the opening and closing position in the Fund(s) by each master account and any
activity which has occurred in the master account subsequent to any previous
reporting, which will be provided to Fund Affiliate under this Agreement.
2. Access to Proprietary Information.
a. During the term of this Agreement, Schwab will provide to Fund
Affiliate on a monthly basis, the Proprietary Information for that month. The
Proprietary Information shall be provided together with the master accounts of
Objecting Customers - which shall be identified only by coded account number.
b. Fund Affiliate will hold the Proprietary Information in strictest
confidence and will use the Proprietary Information solely for the business
purposes set forth in Recital A above. Fund Affiliate will have in effect, and
enforce, rules and policies designed to protect against unauthorized access to
or use of the Proprietary Information including instruction of and written
agreements with their employees and Mailing Agent to insure that they protect
the confidentiality of the Proprietary Information. Fund Affiliate may disclose
Proprietary Information to its responsible employees and Mailing Agent only to
the extent necessary to carry out the purpose for which Proprietary Information
is disclosed. Fund Affiliate shall instruct its employees not to disclose
Proprietary Information to third parties, except to Mailing Agent.
c. Fund Affiliate shall not be prevented from using or disclosing any
information or material, or any element thereof, whether or not such information
or material is Proprietary Information for the purposes of this Agreement, to
the extent any such information or material, or any element thereof:
i. has been previously published or is published hereafter, unless such
publication is itself a breach of this Agreement or a similar confidential
disclosure agreement with Schwab;
ii. was already known to Fund Affiliate prior to being disclosed by Schwab
as evidenced by written records kept in the ordinary course of business of Fund
Affiliate or by proof of actual use by Fund Affiliate;
iii. has been or is hereafter rightfully received by Fund Affiliate from a
third person without restriction on disclosure and without breach of this
Agreement; or
2
<PAGE> 3
iv. has been independently developed by Fund Affiliate.
It shall be presumed that any Proprietary Information in Fund Affiliate's
possession is not within exceptions (iii) or (iv) above, and the burden is on
Fund Affiliate to prove otherwise by records and documentation.
d. Fund Affiliate may release Proprietary Information if required by
law or by order or requirement of any court or governmental authority; provided
that prior to releasing Proprietary Information pursuant to any such requirement
or order, Fund Affiliate shall so notify Schwab. If feasible, such notice shall
be provided not less than five (5) business days prior to the required
disclosure. Fund Affiliate will use reasonable efforts not to release the
Proprietary Information pending the outcome of any measures taken by Schwab to
contest the requirement or order.
e. Fund Affiliate acknowledges and agrees that it or its agent's
breach of any part of this Agreement will result in irreparable harm to Schwab
for which an adequate remedy is not available at law. Accordingly, in such
event, Schwab shall be entitled, in addition to any other remedies available, to
equitable relief, including preliminary injunction and restraining order.
f. Fund Affiliate shall receive Proprietary Information back from any
Mailing Agent, and destroy all tangible and non-tangible representations of
Proprietary Information, within thirty (30) days of its receipt, upon receipt of
Proprietary Information for a more recent month, or at termination of this
Agreement, whichever is sooner. Fund Affiliate shall, if so requested by
Schwab, deliver a letter to Schwab confirming the return and the destruction of
the Proprietary Information.
g. Schwab reserves all rights in the Proprietary Information pursuant
to any patents and copyrights contained therein. Fund Affiliate recognizes and
agrees that nothing contained in this Agreement shall be construed as granting
any rights, license or otherwise, to any Proprietary Information disclosed
pursuant to this Agreement.
h. Fund Affiliate shall, at its own expense, take all reasonable
steps, including the initiation and prosecution of actions at law or in equity,
necessary to prevent disclosure of any Proprietary Information by any
representative or employee of Fund Affiliate or Mailing Agent and to prevent the
unauthorized use or disclosure of any Proprietary Information by any other
person who gained such Proprietary Information from Fund Affiliate or its agent,
representatives, or employee in violation of the terms of this Agreement.
3. Responsibility for Communications. Fund Affiliate acknowledges its
sole responsibility for any communication made with or mailings sent to Schwab
Institutional Customers hereunder, and the compliance of such communications and
mailings with all applicable laws and regulations.
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<PAGE> 4
4. Indemnification. Fund Affiliate shall indemnify and hold harmless
Schwab and each director, officer, employee and agent of Schwab from and
against any and all claims, liabilities, losses, damages, and expenses of any
nature, including counsel fees ("Losses") arising out of (i) any use made by
Fund Affiliate or Mailing Agent of the Proprietary Information, (ii) any
failure by Fund Affiliate or Mailing Agent to comply with any applicable laws
and regulations, and (iii) any action taken or omitted to be taken by Schwab in
observance of the terms of this Agreement.
5. Liability. Fund Affiliate shall cause Mailing Agent to enter into a
contract with Fund Affiliate, in which Schwab shall be named as an express
third party beneficiary, requiring that the Proprietary Information be kept
confidential as provided in this Agreement and not used for any other purpose
than envisioned under this Agreement. Fund Affiliate understands and agrees
that it shall be liable for any failure of the Mailing Agent to keep the
Proprietary Information confidential to the extent provided in this Agreement.
6. Assignability. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties and their respective successors and assigns.
Any assignment (within the meaning of Section 2(a)(4) of the Investment Company
Act of 1940, as amended) of this Agreement by Fund Affiliate is prohibited
without Schwab's prior written consent.
7. Termination. Schwab may terminate this Agreement by giving Fund
Affiliate ten (10) days prior written notice. The termination of the Agreement
shall not affect Fund Affiliate's obligations or rights with respect to
Proprietary Information disclosed prior to the effective date of termination.
8. Choice of Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of California applicable to agreements
made and performed in California by California residents. If any provision of
this Agreement is determined to be illegal or unenforceable by competent
judicial authority, all other terms and provisions shall nevertheless remain
effective and shall be enforced to the fullest extent permitted by law.
9. Single Agreement. This Agreement may be signed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
10. Waiver. No delay or omission by a party in exercising any rights
under this Agreement will operate as a waiver of that or any other right. A
waiver or consent given by a party on one occasion is effective only in that
instance and will not be construed as bar to or waiver of any right on any
other occasion.
11. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. Any
modification to this Agreement must be in writing and signed by both parties.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Thompson Plumb & Associates, Inc. CHARLES SCHWAB & CO., INC.
---------------------------------
Name of Fund Affiliate
By: /s/ Thomas G. Plumb By:_______________________
---------------------------------
Name: Thomas G. Plumb Name:_____________________
---------------------------------
Title: President Title:____________________
---------------------------------
Date: January 15, 1997 Date:_____________________
---------------------------------
5
<PAGE> 1
EXHIBIT 9(e)
SERVICES AGREEMENT
This Agreement is made as of January 15, 1997, between Charles Schwab &
Co., Inc. ("Schwab"), a California corporation, each registered investment
company ("Fund Company") executing this Agreement, on its own behalf and on
behalf of each of its series or classes of shares listed on Schedule I, as
amended from time to time (such series or classes being referred to as the
"Fund(s)"), and Fund Affiliate (defined below) that has executed this
Agreement. Fund Company and Fund Affiliate are collectively referred to herein
as "Fund Parties." In the event that there are no series or classes of shares
listed on Schedule I, the term "Fund(s)" shall mean "Fund Company".
WHEREAS Fund Affiliate is either (i) an investment adviser to or
administrator for the Funds or (ii) the principal underwriter or distributor
for the Funds.
WHEREAS Fund Parties wish to have Schwab perform certain recordkeeping,
shareholder communication, and other services for each Fund; and
WHEREAS Schwab is willing to perform such services on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services
a. During the term of this Agreement, Schwab shall perform the
services set forth on Exhibit A hereto, as such exhibit may be amended from time
to time by mutual consent of the parties (the "Services").
b. The parties agree that the Operating Agreement, dated as of January
15, 1997, between Schwab and Fund Company, as amended from time to time
("Operating Agreement"), is incorporated herein by this reference. In processing
purchase, redemption, transfer and exchange orders placed by Schwab on behalf of
its customers, and in order to facilitate Schwab's performance of Services, all
terms and conditions of the Operating Agreement shall be binding as between
Schwab and Fund Parties, and the references to Fund Company therein shall be
deemed to mean Fund Parties for the purposes of this Agreement. In the event of
any inconsistency between the Operating Agreement and this Agreement, this
Agreement shall control.
2. Fees
For the Services, Schwab shall receive a fee (the "Fee") which shall
be calculated and paid in accordance with Exhibit B hereto. Schedule II reflects
the portion of the Fee that
<PAGE> 2
each Fund Party has agreed, as between them, to pay. Should Exhibit A be
amended to revise the Services, the parties shall also amend Exhibit B and
Schedule II, if necessary, in order to reflect any changes in the Fee.
3. Transaction Charles
The parties acknowledge and agree that Schwab may collect transaction
fees from certain customers (including "Active Traders," as Schwab may define
that term) for certain services and from other customers upon such other
customers' redemption of certain shares.
4. Indemnification
a. Schwab shall indemnify and hold harmless Fund Parties and their
directors, officers, employees, and agents ("Indemnified Parties") from and
against any and all losses, claims, liabilities and expenses (including
reasonable attorney's fees) ("Losses") incurred by any of them arising out of
(i) Schwab's dissemination of information regarding Fund Parties or a Fund that
contains an untrue statement of material fact or any omission of a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading and that was not published or
provided to Schwab by or on behalf of Fund Company or its affiliated persons
("Affiliates") as defined under the Investment Company Act of 1940, as amended
(the "1940 Act"), or accurately derived from information published or provided
by or on behalf of Fund Company or any Affiliate, (ii) any breach by Schwab of
any representation, warranty or agreement contained in this Agreement, or (iii)
any willful misconduct or negligence by Schwab in the performance of, or failure
to perform, its obligations under this Agreement, except to the extent such
Losses are caused by Fund Company or Fund's breach of this Agreement or Fund
Company or Fund's willful misconduct or negligence in the performance, or
failure to perform, its obligations under this Agreement. This Section 4(a)
shall survive termination of this Agreement.
b. In any event, no party shall be liable for any special,
consequential or incidental damages.
5. Role and Relationship of Schwab
The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended, or the 1940
Act. This Agreement does not grant Schwab any right to purchase shares from any
Fund (although it does not preclude Schwab from purchasing any such shares), nor
does it constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Schwab is
involved in the purchase of shares of any Fund by Schwab's customers, such
involvement will be as agent of such customer only.
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6. Information to be Provided
Fund Parties shall provide to Schwab prior to the effectiveness of
this Agreement or as soon thereafter as practicable, two (2) copies of the
then-current prospectus and statement of additional information of each Fund.
Fund Party shall provide Schwab with written copies of any amendments to or
changes in the Fund's prospectus or statement of additional information
immediately upon their effective date.
7. Representations and Warranties
a. Each Fund Party represents and warrants that it has obtained
certified resolutions of its board of directors authorizing such Fund Party to
enter into this Agreement.
b. Each Fund Party represents and warrants that the person signing
this Agreement on its behalf is an officer authorized to execute this Agreement
on behalf of such Fund Party.
8. Notices
All notices required by this Agreement (excluding the Operating
Agreement) shall be in writing and delivered personally or sent by first class
mail. Such notices will be deemed to have been received as of the earlier of
actual physical receipt or three (3) days after deposit, first class postage
prepaid, in the United States mail. All such notices shall be made:
if to Schwab, to: Charles Schwab & Co., Inc.
101 Montgomery Street
San Francisco, CA 94104
Attention: Matthew L. Sadler
Vice President/Mutual Funds
with a copy to: General Counsel, at the same address;
if to Fund Party, to the address given below in the signature
block.
9. Nonexclusivity
Each Party acknowledges that the other may enter into agreements
similar to this Agreement with other parties for the performance of services
similar to those to be provided under this Agreement, unless otherwise agreed to
in writing by the parties.
3
<PAGE> 4
10. Assignability
This Agreement is not assignable by any party without the other
parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Parties, assign its rights and obligations under this Agreement
to any Affiliate.
11. Exhibits and Schedules; Entire Agreement
All Exhibits and Schedules to this Agreement, as they may be amended
from time to time, are by this reference incorporated into and made a part of
this Agreement. This Agreement (including the Exhibits and Schedules hereto),
together with the Operating Agreement, constitute the entire agreement between
the parties as to the subject matter hereof and supersede any and all
agreements, representations and warranties, written or oral, regarding such
subject matter made prior to the time at which this Agreement has been executed
and delivered by Schwab and Fund Parties.
12. No Waiver
The failure of either party to insist upon exercising any right under
this Agreement shall not be construed as a waiver or relinquishment to any
extent of such party's right to assert or rely upon such provision or right in
any other instance.
13. Amendment
This Agreement and the Exhibits and Schedules hereto may be amended
only by a writing executed by each party hereto that is to be bound by such
amendment.
13. Governing Law
This Agreement shall be governed by and interpreted under the laws of
the State of California, applicable to contracts between California residents
entered into and to be performed entirely within the state.
14. Counterparts
This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument.
15. Effectiveness of Agreement; Termination
a. Upon Schwab's acceptance of Schedule I, as amended from time to
time, the effective date of this Agreement as to any Fund shall be the later of
the date on which this Agreement is made or the date set forth opposite the name
of the Fund on Schedule I.
4
<PAGE> 5
b. This Agreement may be terminated as to a Fund by any party (i) upon
ninety (90) days' written notice to the other parties or (ii) upon such shorter
notice as is required by law, order, or instruction by a court of competent
jurisdiction or a regulatory body or self-regulatory organization with
jurisdiction over the terminating party or (iii) immediately, effective on the
day following the termination of any plan of distribution/ shareholder servicing
("Rule 12b-1 Plan") adopted and maintained pursuant to Rule 12b-1 under the 1940
Act by any Fund that has a Rule 12b-1 Plan in effect as of the effective date of
this Agreement, provided that a portion of the Fee is paid pursuant to the Rule
12b-1 Plan.
c. After the date of termination as to a Fund, Fund Parties will not
be obligated to pay the Fee with respect to any shares of the Fund that are
first held in Schwab customer accounts after the date of such termination.
However, notwithstanding any such termination, Fund Parties will remain
obligated to pay Schwab the Fee as to each share of the Fund that was considered
in the calculation of the Fee as of the date of termination (a "Pre-Termination
Share"), for so long as such Pre-Termination Share is held in any Schwab
brokerage account and Schwab continues to perform substantially all of the
Services as to such Pre-Termination Share. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Shares, this
Agreement will otherwise remain in full force and effect as to such
Pre-Termination Shares. Fund Parties shall reimburse Schwab promptly for any
reasonable expenses Schwab incurs in effecting any termination of this
Agreement, including delivery to a Fund Party of any records, instruments, or
documents reasonably requested by the Fund Party.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
CHARLES SCHWAB & CO., INC. Thompson Plumb Funds, Inc. on it's
----------------------------------
own behalf and on behalf of each
Fund listed on Schedule I hereto
By:_______________________________
Matthew L. Sadler By: /s/ Thomas G. Plumb
Vice President/Mutual Funds -------------------------------------
Name: Thomas G. Plumb
-------------------------------------
Date:________________________________ Title: President
-------------------------------------
Date: January 15, 1997
-------------------------------------
Address: 8201 Excelsior Drive
Suite 200
Madison WI 53717
Attn: Thomas G. Plumb
-------------------------------------
Thompson Plumb & Associates, Inc.
Name of Fund Affiliate
Name: Thomas G. Plumb
-------------------------------------
Title: President
-------------------------------------
Date: January 15, 1997
-------------------------------------
Address: 8201 Excelsior Drive
Suite 200
Madison WI 53717
Attn: Thomas G. Plumb
6
<PAGE> 7
EXHIBIT A
SERVICES
1. Record Maintenance
Schwab shall maintain the following records with respect to a Fund for
each customer who holds Fund shares in a Schwab brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for at least the
current year to date;
c. Name and address of the customer, including zip codes and social
security numbers or taxpayers identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Shareholder Communications
Schwab shall:
a. Provide to a shareholder mailing agent for the purpose of mailing
certain Fund-related materials the names and addresses of all Schwab customers
who hold shares of such Fund in their Schwab brokerage accounts. The shareholder
mailing agent shall be a person or entity with whom the Fund has arranged for
the distribution of certain Fund-related material in accordance with the
Operating Agreement. The Fund-related materials shall consist of updated
prospectuses and any supplements and amendments thereto, annual and other
periodic reports, proxy or information statements and other appropriate
shareholder communications. In the alternative, in accordance with the Operating
Agreement, Schwab may distribute the Fund-related materials to its customers;
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Mail statements to customers on a monthly basis (or, as to accounts
in which there has been no activity in a particular month, no less frequently
than quarterly) showing, among other things, the number of shares of each Fund
owned by such customer and the net asset value of such Fund as of a recent date;
7
<PAGE> 8
d. Produce and mail to customers confirmation statements reflecting
purchases and redemptions of shares of each Fund in Schwab brokerage accounts;
e. Respond to customer inquiries regarding, among other things, share
prices, account balances, dividend amounts and dividend payment dates; and
f. With respect to Fund shares purchased by customers after the
effective date of this Agreement, provide average cost basis reporting to the
customers to assist them in preparation of income tax returns.
3. Transactional Services
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers. Schwab shall also communicate, as to shares of each Fund, mergers,
splits and other reorganization activities.
4. Tax Information Returns and Reports
Schwab shall prepare and file with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting (i) dividends and other distributions made, (ii) amounts withheld
on dividends and other distributions and payments under applicable federal and
state laws, rules and regulations, and (iii) gross proceeds of sales
transactions as required.
5. Fund Communications
Schwab shall, on a daily basis and for each Fund, report the number of
shares on which the Fee is to be paid pursuant to this Agreement and the number
of shares on which no such Fee is to be paid. Schwab shall also provide each
Fund with monthly summaries of reports. Such summaries shall be expressed in
both shares and dollar amounts.
8
<PAGE> 9
EXHIBIT B
CALCULATION OF FEE
1. The Fee shall be calculated by multiplying the Daily Value of
Qualifying Shares (defined below) times 35 basis points per annum. The Fee
shall be computed daily and paid monthly in arrears.
2. The Daily Value of Qualifying Shares is the aggregate daily value of
all shares of the Fund held in Schwab brokerage accounts, subject to the
following exclusions ("Qualifying Shares"). There shall be excluded from the
shares (i) shares held in a Schwab brokerage account prior to the effective
date of this Agreement as to the Fund and (ii) shares first held in a Schwab
brokerage account after the termination of this Agreement as to the Fund.
3. For purposes of this Exhibit, the daily value of the shares of each
Fund will be the net asset value reported by such Fund to the National
Association of Securities Dealers, Inc. Automated Quotation System. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the first business day after the day to which the
error relates.
4. At the request of Fund Parties, Schwab shall provide, on each business
day, a statement detailing the calculation for each Fund and the aggregate
value of the Qualifying Shares of each Fund. As soon as practicable after the
end of the month, Schwab shall also provide to Fund Parties an invoice for the
amount of the Fee due for each Fund. In the calculation of such Fee, Schwab's
records shall govern unless an error can be shown in the number of shares used
in such calculation.
5. Fund Parties shall pay Schwab the Fee within thirty (30) days after
Fund Parties' receipt of such statement. Such payment shall be by wire
transfer, unless the amount thereof is less than $250. Such wire transfers
shall be separate from wire transfers of redemption proceeds or distributions
under the Operating Agreement. Amounts less than $250 may, at Fund Parties'
discretion, be paid by check.
9
<PAGE> 10
SCHEDULE I
TO THE SERVICES AGREEMENT
Funds Effective Date
- ----- --------------
Thompson Plumb Balanced Fund* 1/15/97
Thompson Plumb Growth Fund* 1/15/97
* Indicates that Fund is a "no load" or "no sales charge" Fund as defined in
Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc. SI Indicates that the Fund is available only to Schwab
Institutional customers.
Accepted by: Thompson Plumb Funds. Inc. on it's own
--------------------------------------------
CHARLES SCHWAB & CO., INC. behalf and on behalf of each Fund listed on
this Schedule I
By:_______________________________
Matthew L. Sadler By: /s/ Thomas G. Plumb
Vice President/Mutual Funds -------------------------------------
Name: Thomas G. Plumb
-------------------------------------
Date:________________________________ Title: President
-------------------------------------
Date: January 15, 1997
-------------------------------------
Acknowledged by:
Thompson Plumb & Associates, Inc.
Name of Fund Affiliate
By: /s/ Thomas G. Plumb
-------------------------------------
Name: Thomas G. Plumb
-------------------------------------
Title: President
-------------------------------------
Date: January 15, 1997
-------------------------------------
10
<PAGE> 11
SCHEDULE II
TO THE RETAIL SERVICES AGREEMENT
Fund Company
Thompson Plumb Funds, Inc. 0 %
- -------------------------------------- ----
(name)
Fund Affiliate
Thompson Plumb & Associates, Inc. 35 %
- -------------------------------------- ----
(name)
Fee Rate Percentage Per Annum on
All Qualifying Shares 0.35%
11
<PAGE> 1
EXHIBIT 9(f)
Appendix A
DISTRIBUTION AND SERVICING AGREEMENT
Gentlemen:
We wish to enter into this Distribution and Servicing Agreement
("Agreement") with you concerning the provision of distribution services, (and,
to the extent provided below, support services) to your clients ("Clients" who
may from time to time acquire and beneficially own shares of Common Stock of
Portico Money Market Fund ("Shares") offered by Portico Funds, Inc.
The terms and conditions of this Agreement are as follows:
Section 1. You will provide reasonable assistance in connection with the
distribution of Shares to Clients as requested from time to time by our
distributor, which assistance may include forwarding sales literature and
advertising provided by our distributor for Clients. In addition, you agree to
provide the following support services to Clients who may from time to time
acquire and beneficially own Shares*: (i) processing dividend and distribution
payments from us on behalf of Clients; (ii) providing information periodically
to Clients showing their positions in Shares; (iii) arranging for bank wires;
(iv) responding to Client inquiries relating to the services performed by you;
(v) providing subaccounting with respect to Shares beneficially owned by
Clients or the information to us necessary for subaccounting; (vi) if required
by law, forwarding shareholder communications from us (such as proxies,
shareholder reports, annual and semiannual financial statements and dividend,
distribution and tax notices) to Clients; (vii) assisting in processing
purchase, exchange and redemption requests from Clients and in placing such
orders with our service contractors; (viii) assisting Clients in changing
dividend options, account designations and addresses; and (ix) providing such
other similar services as we may reasonably request to the extent you are
permitted to do so under applicable statutes, rules and regulations.
Section 2. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you)
as may be reasonably necessary or beneficial in order to provide the
aforementioned assistance and services to Clients.
Section 3. Neither of you nor any of your officers, employees or agents
are authorized to make any representations concerning us or the Shares except
those contained in our then
- --------------------
* Services may be modified or omitted in the particular case and items
renumbered.
A-1
<PAGE> 2
current prospectuses and statements of additional information for Shares,
copies of which will be supplied by us to you, or in such supplemental
literature or advertising as may be authorized by us in writing.
Section 4. For all purposes of this Agreement, you will be deemed to be
an independent contractor and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement,
you agree to and do release, indemnify and hold us harmless from and against
any and all direct or indirect liabilities or losses resulting from requests,
directions, actions or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of Shares (or orders relating to the same) by or on
behalf of Clients. You and your employees will, upon request, be available
during normal business hours to consult with us or our designees concerning the
performance of your responsibilities under this Agreement.
Section 5. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment
therefor, a fee at the annual rate of $0 of the average daily net asset value
of the Shares beneficially owned by your Clients for whom you are the dealer of
record or holder of record or with whom you have a servicing relationship (the
"Clients' Shares"), which fee will be computed daily and payable monthly. For
purposes of determining the fees payable under this Section 5, the average
daily net asset value of the Clients' Shares will be computed in the manner
specified in our Registration Statement (as the same is in effect from time to
time) in connection with the computation of the net asset value of Shares for
purposes of purchases and redemptions. The fee rate stated above may be
prospectively increased or decreased by us, in our sole discretion, at any time
upon notice to you. Further, we may, in our discretion and without notice,
suspend or withdraw the sale of Shares, including the sale of Shares to you for
the account of any Client or Clients. All fees payable by Portico Funds under
this Agreement with respect to the Shares of a particular Fund shall be borne
by and be payable entirely out of the assets allocable to, said Shares; and no
other class of Shares of any other Fund offered by Portico Funds shall be
responsible for such fees.
Section 6. Any person authorized to direct the disposition of monies paid
or payable by us pursuant to this Agreement will provide to our Board of
Directors, and our Directors will review, at least quarterly, a written report
of the amounts so expended and the purposes for which such expenditures were
made. In addition, you will furnish us or our designees with such information
as we or they may reasonably request (including, without limitation, periodic
certifications confirming the provisions to Clients of the services described
herein), and will otherwise cooperate with us and our designees (including,
without limitation, any auditors designated by us), in connection with the
preparation of reports to our Board of Directors concerning this Agreement and
the monies paid or payable by us pursuant hereto, as well as any other reports,
or filings that may be required by law.
Section 7. We may enter into other similar Agreements with any other
person or persons without your consent.
A-2
<PAGE> 3
Section 8. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) the compensation payable to you hereunder,
together with any other compensation you receive from Clients for services
contemplated by this Agreement, will not be excessive or unreasonable under the
laws and instruments governing your relationships with Clients; and (ii) you
will provide to Clients a schedule of any fees that you may charge to them
relating to the investment of their assets in Shares. In addition, you
understand that this Agreement has been entered into pursuant to Rule 12b-1
under the Investment Company Act of 1940 (the "Act"), and is subject to the
provisions of said Rule, as well as any other applicable rules or regulations
promulgated by the .
Section 9. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless
sooner terminated, this Agreement will continue until February 28, 1992, and
thereafter will continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by us in the manner
described in Section 12. This Agreement is terminable with respect to the
Shares of any Fund, without penalty, at any time by us (which termination may
be by a vote of a majority of the Disinterested Directors as defined in Section
12 or by vote of the holders of a majority of the outstanding Shares of such
Fund) or by you upon notice to the other party hereto. This Agreement will
also terminate automatically in the event of its assignment (as defined in the
Act).
Section 10. All notice and other communications to either you or us will
be duly given if mailed, telegraphed, telexed, or transmitted by similar
telecommunications device to the appropriate address stated herein.
Section 11. This Agreement will be construed in accordance with the laws
of the State of Wisconsin.
Section 12. This Agreement has been approved by vote of a majority of (i)
our Board of Directors and (ii) those Directors who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in the operation of the Distribution and
Service Plan adopted by us or in any agreement related thereto cast in person
at a meeting called for the purpose of voting on such approval ("Disinterested
Directors").
A-3
<PAGE> 4
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, c/o Sunstone Financial Group, Inc., 207 East Buffalo Street, Suite 315,
Milwaukee, Wisconsin 53202.
Very truly yours,
PORTICO FUNDS, INC.
By:_______________________________ ___________________
(Authorized Officer) Date
Accepted and Agreed to:
THOMPSON, UNGER & PLUMB FUND, INC.
By:_______________________________ ___________________
(Authorized Officer) Date
A-4
<PAGE> 5
PORTICO FUNDS, INC.
DISTRIBUTION AND SERVICE PLAN
This Distribution and Service Plan (the "Plan") has been adopted by the
Board of Directors of Portico Funds, Inc. in conformance with Rule 12b-1 under
the Investment Company Act of 1940 (the "Act").
Section 1. Upon the recommendation of Sunstone Financial Group, Inc.
("Sunstone"), the distributor and administrator of Portico Funds, Inc .
("Portico Funds"), any officer of Portico Funds is authorized to execute and
deliver, in the name and on behalf of Portico Funds, written agreements based
on the form attached hereto as Appendix A or any other form duly approved by
the Board of Directors ("Agreements") with securities dealers, financial
institutions and other industry professionals that are shareholders or dealers
of record or which have a servicing relationship with the beneficial owner, of
Shares of Portico Funds ("Shareholder Organizations"). Pursuant to such
Agreements, Shareholder Organizations shall provide distribution and support
services as set forth therein to their clients who acquire and beneficially own
Shares of any Fund offered by Portico Funds in consideration of a fee, computed
monthly in the manner set forth in the Agreements, at an annual rate of up to
.25% of the average daily net asset value of the Shares beneficially owned by
such clients. First Wisconsin Trust Company and its affiliates are eligible to
become Shareholder Organizations and to receive fees under this Plan.
Section 2. Sunstone shall monitor the arrangements pertaining to Portico
Funds' Agreements with Shareholder Organizations in accordance with the terms
of Sunstone's administration agreement with Portico Funds. Sunstone shall not,
however, be obliged by this Plan to recommend, and Portico Funds shall not be
obliged to execute, any Agreement with any qualifying Shareholder Organization.
Section 3. So long as this Plan is in effect, Sunstone shall provide to
Portico Funds' Board of Directors, and the Directors shall review, at least
quarterly, a written report of the amounts expended pursuant to this Plan and
the purposes for which such expenditures were made.
Section 4. This Plan shall become effective immediately with respect
teach particular Fund upon the approval of the Plan (and the form of Agreement
attached hereto) by (a) a majority of the Board of Directors, including a
majority of the Directors who are not "interested persons," as defined in the
Act, of Portico Funds and have no direct or indirect financial interest in the
operation of this Plan or any Agreement related to this Plan (the
"Disinterested Directors"), pursuant to a vote cast in person at a meeting
called for the purpose of voting on the approval of this Plan (and form of
Agreement), and (b) a majority (as defined in the Act) of the outstanding
Shares of such Fund.
<PAGE> 6
Section 5. Unless sooner terminated, this Plan shall continue until
February 28, 1991 and thereafter shall continue automatically for successive
annual periods, provided such continuance is approved at least annually in the
manner set forth in Section 4(a).
Section 6. This Plan may be amended at any time with respect to any Fund
by the Board of Directors, provided that (a) any amendment to increase
materially the costs (whether for distribution or any other purpose) which such
Fund may bear pursuant to this Plan shall be effective only upon the favorable
vote of a majority (as defined in the Act) of the outstanding Shares of such
Fund, and (b) any material amendment of the terms of this Plan shall become
effective only upon the approvals set forth in Section 4(a).
Section 7. This Plan is terminable at any time with respect to any Fund
by (a) vote of a majority of the Disinterested Directors, or (b) vote of a
majority (as defined in the Act) of the Shares of such Fund.
Section 8. While this Plan is in effect, the selection and nomination of
those Directors who are not "interested persons" (as defined in the Act) of
Portico Funds shall be committed to the discretion of such non-interested
Directors.
Section 9. All expenses incurred by Portico Funds with respect to the
Shares of a particular Fund in connection with Agreements and the
implementation of this Plan shall be borne entirely by such Fund.
Section 10. This Plan was originally adopted by Portico Funds as of
February 25, 1988, and last readopted as of February 15, 1991.
<PAGE> 1
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. 12 to the Registration Statement on Form N-1A (the "Registration
Statement") of our report dated January 13, 1997, relating to the financial
statements and financial highlights appearing in the November 30, 1996 Annual
Report to Shareholders of Thompson Plumb Funds, Inc., which are also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the headings "Financial Highlights" and "Shareholder
Reports, Statements and Inquiries" in the Prospectus and under the headings
"Counsel and Independent Accountants" and "Financial Statements" in the
Statement of Additional Information.
PRICE WATERHOUSE LLP
Minneapolis, Minnesota
March 27, 1997
<PAGE> 1
EXHIBIT 16(a)
Schedule for Computation of Performance Quotation
Thompson Plumb Balanced Fund
Commencement of Operations through November 30, 1996
1. Initial (March 16, 1987) Offering Price = $10.00
2. Number of hypothetical shares purchased =
$1,000 divided by $10.00 = 100.000 shares
3. Amount of dividends and distributions =
12/22/87 - $0.09302 per share x 100.000 = $ 9.30 / $ 9.02 = 1.031 shares
12/22/88 - $0.20688 per share x 101.031 = $20.90 / $ 9.90 = 2.111 shares
12/26/89 - $0.31496 per share x 103.142 = $32.49 / $11.50 = 2.825 shares
12/27/90 - $0.28954 per share x 105.967 = $30.68 / $11.65 = 2.633 shares
12/27/91 - $0.10075 per share x 108.600 = $10.94 / $14.18 = 0.772 shares
12/27/91 - $0.28166 per share x 108.600 = $30.59 / $14.18 = 2.157 shares
07/01/92 - $0.00869 per share x 111.529 = $0.97 / $13.64 = 0.071 shares
12/23/92 - $0.27531 per share x 111.600 = $30.72 / $13.89 = 2.212 shares
12/23/92 - $0.54876 per share x 111.600 = $61.24 / $13.89 = 4.409 shares
12/28/93 - $0.26731 per share x 118.221 = $31.60 / $13.61 = 2.322 shares
12/28/93 - $0.07657 per share x 118.221 = $9.05 / $13.61 = 0.665 shares
12/28/93 - $0.58472 per share x 118.221 = $69.13 / $13.61 = 5.079 shares
12/28/94 - $0.28105 per share x 126.287 = $35.49 / $11.98 = 2.962 shares
12/28/94 - $0.26239 per share x 126.287 = $33.14 / $11.98 = 2.766 shares
12/28/94 - $1.28165 per share x 126.287 = $161.86 / $11.98 = 13.511 shares
12/26/95 - $0.22976 per share x 145.526 = $33.44 / $13.19 = 2.535 shares
12/26/95 - $0.43720 per share x 145.526 = $63.62 / $13.19 = 4.823 shares
12/26/95 - $0.41906 per share x 145.526 = $60.98 / $13.19 = 4.623 shares
Total = 57.507 shares
4. Fees charged to shareholder accounts = 0
5. Ending (November 30, 1996) Net Asset Value = $16.54
6. Ending Redeemable value of hypothetical investment =
100.000 + 57.507 = 157.507 x $16.54 = $2,605.17
7. Total Return = ($2,605.17 - $1,000) divided by $1,000 = 160.52%
8. Annualized Compounded Return = 10.35%
Number of years = 3,547 days / 365 days = 9.7178082
<PAGE> 2
EXHIBIT 16(a)
Schedule for Computation of Performance Quotation
Thompson Plumb Balanced Fund
Five Years Ended November 30, 1996
1. Initial (November 30, 1991) Offering Price = $13.50
2. Number of hypothetical shares purchased =
$1,000 divided by $13.50 = 74.074 shares
3. Amount of dividends and distributions =
12/27/91 - $0.10075 per share x 74.074 = $ 7.46 / $14.18 = 0.526 shares
12/27/91 - $0.28166 per share x 74.074 = $ 20.86 / $14.18 = 1.471 shares
07/01/92 - $0.00869 per share x 76.071 = $ 0.66 / $13.64 = 0.048 shares
12/23/92 - $0.27531 per share x 76.119 = $ 20.96 / $13.89 = 1.509 shares
12/23/92 - $0.54876 per share x 76.119 = $ 41.77 / $13.89 = 3.007 shares
12/28/93 - $0.26731 per share x 80.635 = $ 21.55 / $13.61 = 1.583 shares
12/28/93 - $0.07657 per share x 80.635 = $ 6.17 / $13.61 = 0.453 shares
12/28/93 - $0.58472 per share x 80.635 = $ 47.15 / $13.61 = 3.464 shares
12/28/94 - $0.28105 per share x 86.135 = $ 24.21 / $11.98 = 2.021 shares
12/28/94 - $0.26239 per share x 86.135 = $ 22.60 / $11.98 = 1.886 shares
12/28/94 - $1.28165 per share x 86.135 = $110.39 / $11.98 = 9.215 shares
12/26/95 - $0.22976 per share x 99.257 = $ 22.81 / $13.19 = 1.729 shares
12/26/95 - $0.43720 per share x 99.257 = $ 43.40 / $13.19 = 3.290 shares
12/26/95 - $0.41906 per share x 99.257 = $ 41.59 / $13.19 = 3.153 shares
Total = 33.355 shares
4. Fees charged to shareholder accounts = 0
5. Ending (November 30, 1996) Net Asset Value = $16.54
6. Ending Redeemable value of hypothetical investment =
74.074 + 33.355 = 107.429 x $16.54 = $1,776.88
7. Total Return = ($1,776.88 - $1,000) divided by $1,000 = 77.69%
8. Annualized Compounded Return = 12.18%
Number of years = 5
<PAGE> 3
EXHIBIT 16(a)
Schedule for Computation of Performance Quotation
Thompson Plumb Balanced Fund
One Year Ended November 30, 1996
1. Initial (November 30, 1995) Offering Price = $14.23
2. Number of hypothetical shares purchased =
$1,000 divided by $14.23 = 70.274 shares
3. Amount of dividends and distributions =
12/26/95 - $0.22976 per share x 70.274 = $16.15 / $13.19 = 1.224 shares
12/26/95 - $0.43720 per share x 70.274 = $30.72 / $13.19 = 2.329 shares
12/26/95 - $0.41906 per share x 70.274 = $29.45 / $13.19 = 2.233 shares
Total = 5.786 shares
4. Fees charged to shareholder accounts = 0
5. Ending (November 30, 1996) Net Asset Value = $16.54
6. Ending Redeemable value of hypothetical investment =
70.274 + 5.786 = 76.060 x $16.54 = $1,258.03
7. Total Return = ($1,258.03 - $1,000) divided by $1,000 = 25.80%
8. Annualized Compounded Return = 25.80%
Number of years = 1
<PAGE> 1
EXHIBIT 16(b)
Schedule for Computation of Performance Quotation
Thompson Plumb Growth Fund
Commencement of Operations through November 30, 1996
1. Initial (February 10, 1992) Offering Price = $20.00
2. Number of hypothetical shares purchased =
$1,000 divided by $20.00 = 50.000 shares
3. Amount of dividends and distributions =
12/28/94 - $1.86451 per share x 50.000 = $93.23 / $19.18 = 4.861 shares
12/26/95 - $0.53779 per share x 54.861 = $29.50 / $24.33 = 1.212 shares
12/26/95 - $0.01008 per share x 54.861 = $ 0.55 / $24.33 = 0.023 shares
Total = 6.096 shares
4. Fees charged to shareholder accounts = 0
5. Ending (November 30, 1996) Net Asset Value = $32.79
6. Ending Redeemable value of hypothetical investment =
50.000 + 6.096 = 56.096 x $32.79 = $1,839.39
7. Total Return = ($1,839.39 - $1,000) divided by $1,000 = 83.94%
8. Annualized Compounded Return = 13.51%
Number of years = 1,755 days / 365 days = 4.8082192
<PAGE> 2
EXHIBIT 16(b)
Schedule for Computation of Performance Quotation
Thompson Plumb Growth Fund
One Year Ended November 30, 1996
1. Initial (November 30, 1995) Offering Price = $24.74
2. Number of hypothetical shares purchased =
$1,000 divided by $24.74 = 40.420 shares
3. Amount of dividends and distributions =
12/26/95 - $0.53779 per share x 40.420 = $21.74 / $24.33 = 0.894 shares
12/26/95 - $0.01008 per share x 40.420 = $ 0.41 / $24.33 = 0.017 shares
Total = 0.911 shares
4. Fees charged to shareholder accounts = 0
5. Ending (November 30, 1996) Net Asset Value = $32.79
6. Ending Redeemable value of hypothetical investment =
40.420 + 0.911 = 41.331 x $32.79 = $1,355.24
7. Total Return = ($1,355.24 - $1,000) divided by $1,000 = 35.52%
8. Annualized Compounded Return = 35.52%
Number of years = 1
<PAGE> 1
EXHIBIT 16(c)
Schedule for Computation of Performance Quotation
Thompson Plumb Bond Fund
Commencement of Operations through November 30, 1996
1. Initial (February 10, 1992) Offering Price = $10.00
2. Number of hypothetical shares purchased =
$1,000 divided by $10.00 = 100.000 shares
3. Amount of dividends and distributions =
07/01/92 - $0.06000 per share x 100.000 = $ 6.00 / $10.20 = 0.588 shares
09/14/92 - $0.09000 per share x 100.588 = $ 9.05 / $10.52 = 0.860 shares
12/23/92 - $0.12880 per share x 101.448 = $13.07 / $10.27 = 1.273 shares
12/23/92 - $0.01719 per share x 101.448 = $ 1.74 / $10.27 = 0.169 shares
03/16/93 - $0.08000 per share x 102.890 = $ 8.23 / $10.57 = 0.779 shares
06/15/93 - $0.11000 per share x 103.669 = $11.40 / $10.65 = 1.070 shares
09/15/93 - $0.10000 per share x 104.739 = $10.47 / $10.81 = 0.969 shares
12/28/93 - $0.15899 per share x 105.708 = $16.81 / $10.57 = 1.590 shares
12/28/93 - $0.12549 per share x 105.708 = $13.27 / $10.57 = 1.255 shares
03/15/94 - $0.06000 per share x 108.553 = $ 6.51 / $10.31 = 0.631 shares
06/15/94 - $0.12000 per share x 109.184 = $13.10 / $10.09 = 1.298 shares
09/15/94 - $0.13000 per share x 110.482 = $14.36 / $10.00 = 1.436 shares
12/28/94 - $0.17984 per share x 111.918 = $20.13 / $ 9.78 = 2.058 shares
03/15/95 - $0.09000 per share x 113.976 = $10.26 / $10.16 = 1.010 shares
06/15/95 - $0.15000 per share x 114.986 = $17.25 / $10.42 = 1.655 shares
09/15/95 - $0.14000 per share x 116.641 = $16.33 / $10.46 = 1.561 shares
12/26/95 - $0.14286 per share x 118.202 = $16.89 / $10.58 = 1.596 shares
03/18/96 - $0.13000 per share x 119.798 = $15.57 / $10.27 = 1.516 shares
06/17/96 - $0.13000 per share x 121.314 = $15.77 / $10.03 = 1.572 shares
09/23/96 - $0.13000 per share x 122.886 = $15.98 / $10.10 = 1.582 shares
Total = 24.468 shares
4. Fees charged to shareholder accounts = 0
5. Ending (November 30, 1996) Net Asset Value = $10.59
6. Ending Redeemable value of hypothetical investment =
100.000 + 24.468 = 124.468 x $10.59 = $1,318.12
7. Total Return = ($1,318.12 - $1,000) divided by $1,000 = 31.81%
8. Annualized Compounded Return = 5.91%
Number of years = 1,755 days / 365 days = 4.8082192
<PAGE> 2
EXHIBIT 16(c)
Schedule for Computation of 30-Day Yield Quotation
Thompson Plumb Bond Fund
For the 30-Day Period Ended November 30, 1996
1. Total dividends and interest earned during 11/96 $116,390.37
(item "a" for formula calculation)
2. Expenses accrued for 11/96 (net of reimbursements) 19,509.32
(item "b" for formula calculation)
3. Net income (a - b) $96,881.05
4. Average daily shares outstanding for 11/96 2,067,870.227
(item "c" for formula calculation)
5. Maximum offering price on 11/30/96 10.59
(item "d" for formula calculation)
6. FORMULA
( (a - b / cd) +1 = e 1.0044240
e raised to the 6th power = f 1.02683962
f minus 1 = g 0.026839
g times 2 = YIELD 0.05367924
7. 30-DAY YIELD FOR PERIOD ENDED 11/30/96 5.37%
<PAGE> 3
EXHIBIT 16(c)
Schedule for Computation of Performance Quotation
Thompson Plumb Bond Fund
One Year Ended November 30, 1996
1. Initial (November 30, 1995) Offering Price = $10.67
2. Number of hypothetical shares purchased =
$1,000 divided by $10.67 = 93.721 shares
3. Amount of dividends and distributions =
12/26/95 - $0.14286 per share x 93.721 = $13.39 / $10.58 = 1.266 shares
03/18/96 - $0.13000 per share x 94.987 = $12.35 / $10.27 = 1.203 shares
06/17/96 - $0.13000 per share x 96.190 = $12.50 / $10.03 = 1.246 shares
09/23/96 - $0.13000 per share x 97.436 = $12.67 / $10.10 = 1.254 shares
Total = 4.969 shares
4. Fees charged to shareholder accounts = 0
5. Ending (November 30, 1996) Net Asset Value = $10.59
6. Ending Redeemable value of hypothetical investment =
93.721 + 4.969 = 98.690 x $10.59 = $1,045.13
7. Total Return = ($1,045.13 - $1,000) divided by $1,000 = 4.51%
8. Annualized Compounded Return = 4.51%
Number of years = 1
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