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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section
14(a) of the Securities
Exchange Act of 1934
(Amendment No. N/A)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
12a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
HEARTLAND GROUP, INC.
(Name of Registrant as Specified in Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Rule 0-11(1):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
_________________________
1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
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HEARTLAND GROUP, INC.
HEARTLAND VALUE & INCOME FUND
790 NORTH MILWAUKEE STREET
MILWAUKEE, WISCONSIN 53202
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SEPTEMBER 26, 1996
To the Shareholders of the Heartland Value & Income Fund:
A Special Meeting of Shareholders of the Heartland Value & Income Fund
(the "Value & Income Fund"), a series of Heartland Group, Inc. ("Heartland
Group"), will be held on September 26, 1996 at 4:00 P.M. at the Milwaukee
Athletic Club, 758 North Broadway, Milwaukee, Wisconsin for the following
purposes:
1. To approve or disapprove a proposed amendment to the fundamental
investment objective of the Value & Income Fund to change the investment
objective from "capital growth and current income" to "capital appreciation and
current income."
2. To approve or disapprove a proposed amendment to a fundamental
investment restriction of the Value & Income Fund concerning Real Estate
Investment Trusts ("REITs") and to adopt a new non-fundamental investment
policy concerning REITs.
3. To transact such other business as may properly come before the
Special Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on August 20,
1996, as the record date for the determination of shareholders entitled to
notice of and to vote at the Special Meeting and any adjournment thereof. Only
shareholders of record at the close of business on that date will be entitled
to vote. Your attention is invited to the Proxy Statement accompanying this
Notice for a more complete statement regarding the matters to be acted upon at
the Meeting.
By Order of the Board of Directors
Lois Schmatzhagen, Secretary
Milwaukee, Wisconsin
August 27, 1996
YOUR VOTE IS IMPORTANT. IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF A SECOND
SOLICITATION, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT
PROMPTLY IN THE ENCLOSED POSTPAID ENVELOPE.
<PAGE> 3
PROXY STATEMENT
HEARTLAND GROUP, INC.
HEARTLAND VALUE & INCOME FUND
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
(414)289-7000
SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors from the shareholders of the Heartland Value
& Income Fund (the "Value & Income Fund" or the "Fund"), a series of Heartland
Group, Inc. ("Heartland Group"), a Maryland corporation, for use at a Special
Meeting of Shareholders (the "Meeting") to be held on September 26, 1996 at
4:00 p.m. at the Milwaukee Athletic Club, 758 North Broadway, Milwaukee,
Wisconsin. The purpose of the Meeting and the matters to be acted upon are set
forth in the accompanying Notice of Special Meeting of Shareholders. You are
encouraged to read this proxy statement carefully and to mark and return the
proxy or proxies accompanying it.
Shares represented by properly executed proxies received by Heartland
Group will be voted at the Meeting and any adjournment thereof in accordance
with the terms of such proxies. If no instructions are specified, shares will
be voted "FOR" proposals 1 and 2, and in the discretion of the persons named in
the proxy on proposal 3. A shareholder may revoke his proxy at any time prior
to the voting thereof by filing a written notice of revocation with the
Secretary of Heartland Group or by delivering a duly executed proxy bearing a
later date.
The presence at the meeting, in person or by proxy, of shareholders
representing one-third of all shares entitled to vote on a matter constitutes a
quorum for the transaction of business. Approval of the fundamental investment
objective amendment pursuant to proposal 1 and the fundamental investment
restriction amendment pursuant to proposal 2 requires the affirmative vote of
"a majority of the outstanding voting securities" of the Value & Income Fund,
defined under the Investment Company Act of 1940 (the "1940 Act") to mean at
least a majority of the outstanding voting shares or, if less, 67% of the
voting shares represented at a meeting at which the holders of 50% or more of
the outstanding voting shares of the Fund are present or represented by proxy.
Abstentions and "broker non-votes" (as defined below) are counted for
purposes of determining whether a quorum is present, but do not represent votes
cast with respect to any proposal. "Broker non-votes" are shares held by a
broker or nominee for which an executed proxy is received by the Value & Income
Fund, but are not voted as to one or more proposals because instructions have
not been received from the beneficial owners or persons entitled to vote and
the broker or nominee does not have discretionary voting power.
Shareholders of record at the close of business on August 20, 1996, will
be entitled to one vote on each matter presented for each share so held. At
that date there were 2,368,571 shares outstanding in the Value & Income Fund.
This proxy material was first mailed to shareholders commencing on or
about August 27, 1996.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
As of July 31, 1996, no person was known by the Board of Directors to be
the owner of record or the "beneficial owner" (determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934) of more than 5% of the
outstanding shares of the Value & Income Fund, except that Charles Schwab &
Co., Inc., ATTN: Mutual Funds, 101 Montgomery Street, San Francisco, CA
94104-4122 held of record 420,523 shares (or 18.9%) of the Value & Income Fund.
Information as to ownership was obtained from information on file with the
Securities and Exchange Commission or furnished by the Transfer Agent or the
specified person.
As of July 31, 1996, the directors and officers of Heartland Group, as a
group (8 persons), beneficially owned 24,194 shares (1.1%) of the Value &
Income Fund. The following table sets forth information with respect to each
director or officer of Heartland Group. The term of office of all officers of
Heartland Group expires when their successors are elected and qualified.
<TABLE>
POSITION AND OFFICES NUMBER OF SHARES
NAME WITH HEARTLAND GROUP BENEFICIALLY OWNED(1)
<S> <C> <C>
William J. President and Director* 6,996(2)
Nasgovitz
Willard H. Director - 0 -
Davidson
Hugh F. Director* 15,273(3)
Denison
Jon D. Director - 0 -
Hammes
Patrick J. Vice President, Treasurer and - 0 -
Retzer Director*
A. Gary Director - 0 -
Shilling
Linda F. Director - 0 -
Stephenson
Lois Secretary 1,926
Schmatzhagen
</TABLE>
______________________
* Directors who are "interested persons" of Heartland Group as defined in
the Investment Company Act of 1940.
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(1) As of July 31, 1996, based on information furnished by the respective
individuals and by the Transfer Agent. Indicated shares represent shares
beneficially owned in the Value & Income Fund. Except as indicated otherwise,
each of the shareholders listed has sole voting and investment power with
respect to the shares listed opposite his or her name.
(2) The shares reported for Mr. Nasgovitz include 289 shares in the Value &
Income Fund which are held in various family custodial accounts with respect to
which Mr. Nasgovitz shares voting and dispositive power.
(3) Mr. Denison shares voting and dispositive power with his spouse with
respect to 9,122 shares of the Value & Income Fund reported as owned by him.
PROPOSALS ON THE FUND'S INVESTMENT PROGRAM
The Board of Directors unanimously recommends approval of the two
proposals relating to the investment objective and fundamental investment
restriction of the Value & Income Fund described in this Proxy Statement. If
the proposals are approved, it is anticipated that the Fund's name would be
changed to Heartland Value Plus, and further refinements of the Fund's
investment program, as described herein and further described in the Supplement
dated August 9, 1996 to the Prospectus dated May 1, 1996, would become
effective no later than October 11, 1996. These changes are intended to more
clearly describe the investment style of the Fund and to better inform
shareholders as to its investment focus and the types of securities that may be
included in the Fund's portfolio.
Currently, the Value & Income Fund may invest in equity and debt
securities, with the proportion of the Fund's investments in each type of
security varying from time to time in accordance with Heartland Advisors'
assessment of economic conditions and investment opportunities. It is
anticipated that the Fund's revised investment program would provide that,
under normal market conditions, the Fund would invest at least 65% of its total
assets in equity securities. Primarily, the Fund would invest in
income-producing equity securities of smaller companies, those with market
capitalizations of less than $750 million. Such equity securities would
continue to be selected on a value basis by Heartland Advisors in accordance
with the factors described in the Fund's Prospectus.
Equity securities in which the Fund would be permitted to invest include
common stock, convertible debt, preferred stock, warrants, or other securities
exchangeable for shares of common stock, and other equity securities, including
real estate investment trusts ("REITs"). Equity securities of companies with
smaller market capitalizations may involve a higher degree of risk than
investments in the general equity markets in that such securities may be
subject to greater price volatility and may have less market liquidity than
equity securities of companies with larger market capitalizations.
In addition, the Fund would be permitted to invest up to 35% of its total
assets in debt securities. The Fund would continue to be able to invest up to
25% of its assets in non-investment grade debt securities as described in the
Prospectus. Absent shareholder approval of the two proposals described in this
Proxy Statement, the Fund will continue to be managed in accordance with the
policies and investment program described in the Fund's Prospectus.
3
<PAGE> 6
1. TO APPROVE OR DISAPPROVE A PROPOSED AMENDMENT
TO THE FUNDAMENTAL INVESTMENT OBJECTIVE OF THE VALUE &
INCOME FUND TO CHANGE THE INVESTMENT OBJECTIVE FROM
"CAPITAL GROWTH AND CURRENT INCOME" TO "CAPITAL
APPRECIATION AND CURRENT INCOME."
The directors unanimously recommend that the shareholders of the Value &
Income Fund vote to amend the Value & Income Fund's current investment
objective as noted below. The purpose of the amendment is to clarify and more
concisely describe the Fund's investment goal, which is capital appreciation
and current income through value-based investing, rather than growth-oriented
investments. If the shareholders do not vote to change the Fund's objective,
the Fund's current objective will remain in place.
The Value & Income Fund's current investment objective states:
"The Value & Income Fund's investment objective is capital growth and
current income."
The proposed investment objective of the Value & Income Fund would be:
"The Value & Income Fund's investment objective is capital appreciation
and current income."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE AMENDMENT TO THE
FUNDAMENTAL INVESTMENT OBJECTIVE OF THE VALUE & INCOME FUND.
2. TO APPROVE OR DISAPPROVE A PROPOSED AMENDMENT
TO A FUNDAMENTAL INVESTMENT RESTRICTION OF THE VALUE &
INCOME FUND CONCERNING REITS AND TO ADOPT A NEW
NON-FUNDAMENTAL INVESTMENT POLICY CONCERNING REITS.
The directors unanimously recommend that the shareholders of the Value &
Income Fund vote to amend one of the Fund's current fundamental investment
restrictions and to adopt a new non-fundamental policy as noted below.
Fundamental investment policies and restrictions may only be changed by a vote
of shareholders, while non-fundamental policies and restrictions may be changed
upon approval of the Fund's Board of Directors without a shareholder vote. The
purpose of the proposed amendment is to allow the Value & Income Fund to invest
in REITs. The Board of Directors believes that this change will better
position the Fund by allowing the Fund the flexibility to invest up to 10% of
its total assets in REITs, which often provide attractive levels of income
relative to other equity investments.
In general, REITs are entities that pool monies raised from investors to
purchase commercial, industrial, and/or residential real estate and, in some
cases, to make mortgage loans secured by such properties. Typically, the REIT
is the owner of the real estate and leases it, pursuant to long term written
leases, to the users thereof, or makes a mortgage loan to the user to enable
the user to purchase the property. The rental income earned by a REIT, less
operating and certain other expenses not paid by the lessees, and/or interest
on mortgage loans, become the net income of the REIT, substantially all of
which is required under the Internal
4
<PAGE> 7
Revenue Code to be distributed to the REIT's shareholders, thus avoiding
taxation at the REIT level. REITs are subject to volatility from risks
associated with investments in real estate and investments dependent on income
from real estate, such as fluctuating demand for real estate and sensitivity to
adverse economic conditions. In addition, the failure of a REIT in which the
Fund has invested to continue to qualify as a REIT for tax purposes would have
an adverse impact on the value of the Fund's investment. If shareholders do
not vote to amend this fundamental investment restriction, the Value & Income
Fund's current investment restriction regarding REITs will remain in place.
Subsection (5) of the Value & Income Fund's fundamental investment
restrictions currently provides that the Value & Income Fund may not:
"(5) Buy or sell real estate, real estate investment trusts, or oil and
gas interests or leases, but this shall not prevent the fund from investing in
securities of companies whose business involves the purchase or sale of real
estate."
The directors recommend that shareholders vote to amend and replace this
fundamental restriction with the following fundamental investment restriction
governing purchasing or selling real estate. The proposed language provides
that the Value & Income Fund may not:
"(5) Buy or sell real estate or oil and gas interests or leases, but this
shall not prevent the Fund from investing in securities secured by real estate
or real estate interests or issued by companies, including real estate
investment trusts, that invest in real estate or real estate interests or whose
business involves the purchase or sale of real estate."
Additionally, the following policy would be added to the Fund's
non-fundamental investment restrictions:
"(6) [the Fund may not] [i]nvest more than 10% of its total assets in real
estate investment trusts."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE AMENDMENT OF THE
FUNDAMENTAL INVESTMENT RESTRICTION CONCERNING REITS AND THE ADOPTION OF THE NEW
NON-FUNDAMENTAL INVESTMENT POLICY.
ADDITIONAL INFORMATION
HEARTLAND ADVISORS, INC.
The investment advisor of the Value & Income Fund will continue to be
Heartland Advisors, Inc. ("Heartland Advisors"). Heartland Advisors, founded
in 1982, also serves as investment advisor for the Heartland Small Cap
Contrarian Fund, the Heartland Value Fund, the Heartland U.S. Government
Securities Fund, the Heartland Wisconsin Tax Free Fund, and the Heartland
Nebraska Tax Free Fund, five additional series of Heartland Group, and also
provides investment management services for individuals, and institutional
accounts, such as pension funds and profit-sharing plans. As of July 31, 1996,
Heartland Advisors had approximately $2.5 billion in assets under management.
In addition to serving as advisor to each series of the Heartland Group,
Heartland Advisors also serves as the distributor of the shares of each series.
Heartland Advisors' offices are located at 790 North Milwaukee Street,
Milwaukee, Wisconsin 53202.
5
<PAGE> 8
COSTS OF SOLICITATION.
Expenses in connection with the solicitation of proxies will be paid by
the Value & Income Fund. Solicitation of proxies will be principally by mail.
Proxies may also be solicited in person, by telephone, telecopy or telegraph,
by officers of Heartland Group, by officers and regular employees of Heartland
Advisors, Inc. or by dealers and their representatives.
OTHER MATTERS.
The Board of Directors has not been informed and is not aware that any
other matters will be brought before the Meeting. However, proxies may be
voted with discretionary authority with respect to any other matter that may be
properly presented to the Meeting or any adjournment thereof.
SHAREHOLDER PROPOSALS.
As permitted by Maryland law, Heartland Group's Board of Directors adopted
amendments to its Bylaws on January 26, 1995, which provide that the Value &
Income Fund is no longer required to hold annual shareholder meetings.
However, special meetings of shareholders may be called for purposes such as
electing or removing directors, changing fundamental policies or approving
investment advisory contracts. Shareholders of the Value & Income Fund wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of
Heartland Group, 790 North Milwaukee Street, Milwaukee, Wisconsin 53202.
By Order of the Board of Directors
Lois Schmatzhagen, Secretary
Milwaukee, Wisconsin
August 27, 1996
EACH FUND WILL FURNISH A COPY OF ITS ANNUAL REPORT AND THE MOST RECENT
SEMI-ANNUAL REPORT WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS IN
WRITING DIRECTED TO: LOIS SCHMATZHAGEN, HEARTLAND GROUP, INC., 790 NORTH
MILWAUKEE STREET, MILWAUKEE, WISCONSIN 53202 OR BY CALLING 1-800-432-7856.
<PAGE> 9
HEARTLAND GROUP, INC.
HEARTLAND VALUE & INCOME FUND
REVOCABLE PROXY FOR SPECIAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William J. Nasgovitz and Patrick J. Retzer, and
each of them, proxy, with full power of substitution to vote all shares of
stock the undersigned is entitled to vote at the Special Meeting of
Stockholders of Heartland Value & Income Fund, a series of Heartland Group,
Inc., to be held at the Milwaukee Athletic Club, 758 North Broadway, Milwaukee,
Wisconsin at 4:00 p.m. on Thursday, September 26, 1996 or at any adjournment
thereof, with respect to the matters set forth on this proxy and described in
the Notice of Special Meeting and Proxy Statement, receipt of which is hereby
acknowledged.
Dated: ___________________________, 1996
______________________________________
(Please sign exactly as name appears at
left)
______________________________________
(If stock is owned by more than one person,
all owners should sign. Persons signing as
executors, administrators, trustees or in
similar capacities should so indicate.)
<PAGE> 10
Shares represented by this proxy will be voted as directed by the stockholder.
IF NO DIRECTION IS SUPPLIED, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
1. To approve a proposed amendment to the
fundamental investment objective to
change the investment objective from
"capital growth and current income" to
"capital appreciation and current
income." FOR / / AGAINST / / ABSTAIN / /
__________________________
2. To approve a proposed amendment to a
fundamental investment restriction
concerning Real Estate Investment Trusts
("REITs") and to adopt a new
non-fundamental investment policy
concerning REITs. FOR / / AGAINST / / ABSTAIN / /
__________________________
3. In their discretion, the proxies are
authorized to vote on such other matters
as may properly come before the meeting.
continued and to be signed on the reverse side
