<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
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
[X] Additional Materials
[ ] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 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):
[X] No fee required.
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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<PAGE>
IMPORTANT QUESTIONS AND ANSWERS
REGARDING THE PROPOSED PLAN OF LIQUIDATION AND DISSOLUTION
FOR THE MID CAP VALUE FUND
Although you should read the full text of the enclosed proxy statement, we hope
the following information will assist you in understanding the voting procedures
and information on the Proposal itself. After reading this information and the
proxy statement, please vote promptly. Your prompt vote will help avoid the
expense of having to solicit your proxy again.
GENERAL INFORMATION
Why is the Plan of Liquidation needed?
As is described in the previous letter, your Board of Directors feels that the
Mid Cap Value Fund is no longer viable due to competitive performance
challenges, a shrinking asset base and the prospect of continued negative cash
flows.
Why doesn't the Board propose to merge the Mid Cap Value Fund into another
Heartland Equity Fund?
The Board realizes that most investors purchased the Fund with the express
purpose of having it represent a specific market capitalization in their
portfolio. Rather than move investors into another fund with a different market
cap range, they chose to let investors make that decision by exchanging before
the liquidation or taking their liquidation proceeds. Because it is expected
that most investors will not have any unrealized gains, the benefit of a tax-
free merger was not a material consideration.
Who is asking for my vote?
The Board of Directors of your Fund is soliciting your vote. Your directors, a
majority of whom are independent of Heartland Advisors, unanimously approved the
Proposal and recommend that you vote in favor of liquidating the Mid Cap Value
Fund.
Assuming the Plan of Liquidation is approved, what options do I have with my Mid
Cap Value Fund investment?
You can choose to wait for the Fund liquidation to be approved by shareholder
vote, at which time you will receive your portion of the liquidation proceeds
based upon the number of shares that you own and the final net asset value of
the Fund. If your account is held in an IRA or tax-sheltered retirement plans
sponsored by the Fund for which Firstar Bank, N.A. serves as custodian and you
have not exchanged or redeemed your account or transferred or rolled over your
IRA or plan assets, Firstar Bank, N.A. will resign as custodian effective on the
date of liquidation and distribute your assets by mailing a check to your
address of record, and mandatory federal income tax will apply to the
distribution.
You can also choose to exchange or redeem your Mid Cap Value Fund shares at any
time
<PAGE>
prior to the scheduled December liquidation date (if Proposal is approved).
If you choose to exchange into another Heartland Fund, please call our
Shareholder Services Department at 1.800.432.7856 or your financial intermediary
for a prospectus. Or review and download a current prospectus at
www.heartlandfunds.com.
What are the tax consequences of the Plan of Liquidation?
An exchange, redemption or liquidation transaction is considered a taxable
event to shareholders with taxable accounts. Shareholders will recognize a gain
or loss with respect to Fund assets they receive based on the difference between
the value of those assets at the time of liquidation and the shareholder's tax
basis. The gain or loss will be characterized as long-term or short-term
depending on whether the investment was held for more or less than 1 year. It
is likely that most shareholders will have a tax loss position.
SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISERS FOR ADVICE REGARDING THE
TAX CONSEQUENCES OF THIS PLAN GIVEN THEIR PARTICULAR SITUATION.
How will the Fund be managed until liquidation?
The Fund will be managed according to its current prospectus guidelines and
investment policies until the Shareholder Meeting is conducted and the Plan of
Liquidation is approved. The management team will monitor cash outflows and
will retain appropriate liquidity to meet potential exchange and redemption
activity prior to the liquidation date. Upon the Plan's approval, the Fund's
remaining invested assets will be sold in the open market. Heartland Advisors
believes that virtually all of the securities retain market liquidity, and that
transaction costs (primarily brokerage fees) incurred by the Fund and its
shareholders in connection with the liquidation should not be significant.
Will I be able to make additional investments in the Mid Cap Value Fund?
Effective October 29, 1999, all purchases of Mid Cap Value Fund shares will be
suspended. If you have an automatic investment plan, automatic exchange or
reinvestment of another Heartland fund's distributions into the Mid Cap Value
fund, these programs will be automatically suspended on your account on October
29, 1999. Please call Heartland Shareholder Services at 1.800.432.7856 or your
financial intermediary if you would like to discuss your options.
Will I be able to make redemptions from the Mid Cap Value Fund?
<PAGE>
Yes, you will be able to place redemption orders for your Mid Cap Value Fund on
any business day through and including the date of liquidation. However, if you
have a systematic withdrawal plan or automatic exchange out of the Mid Cap Value
Fund, that program will be automatically suspended on October 29, 1999. Please
call Heartland Shareholder Services at 1.800.432.7856 or your financial
intermediary to discuss your options.
Whom do I call if I have questions after I read these materials?
If you have questions about the meeting or the proposal after you read this
information and the proxy statement, please call one of our knowledgeable
Shareholder Services representatives at our special proxy toll free number
1.800.611.0493 or 414.289.7000. Please note that if you hold your Mid Cap Value
Fund position(s) through an intermediary, you may receive a call from our proxy
solicitor, D.F. King & Co., Inc., reminding you to vote and offering their
assistance in the voting process.
VOTING PROCEDURES
How many votes am I entitled to cast?
With the enclosed proxy statement, you should have received a separate proxy
card for each account you hold in the Mid Cap Value Fund. You are entitled to
one vote for each share held in your account(s) as of the record date, October
4, 1999. The number of shares you owned on that date is stated on the enclosed
proxy card(s).
How do I vote my shares?
You may vote in two easy ways. Please choose the way that is most convenient
for you.
By Phone: If you hold your shares directly with the Mid Cap Value Fund's
transfer agent (and not through an intermediary such as a broker/dealer), you
may vote by calling the telephone number listed on your proxy card. You also
will need to provide the control number on your card. Please note that the
telephone number listed on your proxy card is for the agent of our proxy
tabulator and not a number for the Heartland Funds.
If you hold your shares through an intermediary, please refer to your proxy card
to determine if their agent permits you to vote by phone or via an Internet
site. Be sure to follow the instructions provided with the proxy card.
You do not need to return your proxy card if you vote via phone or Internet
site.
By Mail: Vote by completing and signing the enclosed proxy card and mailing it
in the enclosed postage paid envelope. Please be sure to sign your name exactly
as it appears in the account registration shown on the proxy card. If you are
signing as an officer of a company, a trustee or other fiduciary, please
indicate your capacity next to your
<PAGE>
signature. Please do not enclose any purchase checks or other information with
your proxy card because the envelope will be mailed directly to your Fund's
proxy tabulator.
<PAGE>
[Heartland Funds Letterhead]
October 11, 1999
Dear Mid Cap Value Fund Shareholder:
I am writing to you today to ask you to vote on a proposed Plan of Liquidation
and Dissolution for the Mid Cap Value Fund. This action requires the approval
of the majority of shareholders of record and a formal vote will be conducted at
a special shareholder meeting scheduled for November 30, 1999.
Your Board of Directors, the majority of whom are not affiliated with Heartland
Advisors, has unanimously approved the proposed Plan and recommends that you
vote in favor of approving the proposal. This package contains information
about the proposal and includes all of the materials you will need to vote.
Why is your Board and Fund Management taking this action?
The enclosed proxy statement covers in detail the background and reasoning for
the Plan. However, it can be summarized as follows:
. The past 15 months has seen the Fund substantially underperform its index
(S&P 400) and Morningstar and Lipper peer group averages.
. This level of underperformance has caused the Fund's assets to retreat from a
high of $50 million achieved in June, 1998 to approximately $7.0 million as
of September 30, 1999. Heartland Advisors is not optimistic that the Fund's
longer-term track record will be able to substantially turn around in the
near term. Because of the challenging competitive performance, and with so
many historically better performing investment alternatives available to
investors, it is likely that shareholders will conduct additional cash
redemptions causing a further decline of the Fund's assets.
. Because of these factors, your Board has determined that the Fund is no
longer viable and that it is in the best interests of the Fund's shareholders
to liquidate the Fund.
Following you will find the detailed proxy statement for this Proposal prefaced
with a question and answer summary. After you have taken the time to carefully
review the material, we ask you to vote promptly by either completing and
returning the enclosed proxy card or by calling our special toll free number
on the card. Any further questions you may about the Proposal can also be
addressed by calling our Shareholder Services Department at 1-800-611-0493.
Thank you for your time and attention to this matter and please note that you
will receive a separate proxy card for each Mid Cap Value Fund account you hold.
Sincerely,
William J. Nasgovitz,
President
<PAGE>
HEARTLAND GROUP, INC.
Heartland Mid Cap Value Fund
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
( 414) 289-7000
www.heartlandfunds.com
-----------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
November 30, 1999
--------------------
To the Shareholders of
HEARTLAND MID CAP VALUE FUND
A Special Meeting of the Shareholders ("Meeting") of the Heartland Mid Cap
Value Fund (the "Fund") of Heartland Group, Inc. will be held in the Wisconsin
Room on the Eighth Floor of the Milwaukee Athletic Club, 758 North Broadway,
Milwaukee, Wisconsin on November 30, 1999, at l0:00 a.m. local time, for the
following purposes:
1. To consider and adopt a Plan of Liquidation pursuant to which the
Fund's assets will be liquidated, known liabilities satisfied and remaining
proceeds distributed to shareholders; and
2. To transact such other business as may properly come before the
meeting.
Shareholders of record as of the close of business on October 4, 1999, are
entitled to notice of and to vote at the Meeting. If you do not sign and return
the proxy card promptly, the Fund may incur the additional expense of subsequent
mailings in order to have a sufficient number of cards signed and returned.
By Order of the Board of Directors
JILAINE HUMMEL BAUER
Secretary
October 11, 1999
Shareholders are invited to attend the special meeting in person. Any
shareholder who does not expect to attend the special meeting is urged to vote
promptly by completing and returning the enclosed proxy, in the envelope
provided. Your vote is important, no matter how large or small your holdings
may be.
<PAGE>
HEARTLAND GROUP, INC.
Heartland Mid Cap Value Fund
790 North Milwaukee Street
Milwaukee, Wisconsin 53202
---------------------
PROXY STATEMENT
Special Meeting of Shareholders
November 30, 1999
-------------------
INTRODUCTION
This Proxy Statement is furnished to the shareholders of the Heartland Mid
Cap Value Fund (the "Fund") by its Board of Directors in solicitation of
shareholder votes at the Fund's Special Meeting of Shareholders ("Meeting"). The
meeting is scheduled to be held on the Eighth Floor of the Milwaukee Athletic
Club on November 30, 1999 at 10:00 a.m., local time. The address of the
Milwaukee Athletic Club is 758 North Broadway, Milwaukee, Wisconsin. The purpose
of the meeting is to consider and vote on a Plan of Liquidation of the Heartland
Mid Cap Value Fund ("Fund"). The Board of Directors, including all of the
independent directors, recommends that you vote in favor of the Proposal.
Subject to Shareholder approval, the liquidation would take place on or about
December 3, 1999.
Only the shareholders of record at the close of business on October 4, 1999
("the Record Date") are entitled to notice of, and to vote at, the Meeting or
any adjournments thereof. As of the Record Date there were 709,744,435 issued
and outstanding shares of common stock of the Fund. Each share issued and
outstanding will be entitled to one vote, and each fractional share issued and
outstanding will be entitled to a proportionate share of one vote, at the
Meeting. The Notice of Special Meeting, Proxy Statement and the form of Proxy
was first mailed to shareholders on or about October 11, 1999.
SOLICITATION AND VOTING INFORMATION
Quorum. One-third of the shares outstanding on the Record Date, represented in
person or by Proxy, must be present for the transaction of business at the
Meeting. If a quorum is present at the Meeting, but sufficient votes to approve
the Plan are not received, the persons named as Proxies (or their substitutes)
may propose one or more adjournments of the Meeting to permit the further
solicitation of proxies. Any such adjournment will require the affirmative vote
of a majority of the shares represented at the Meeting in person or by Proxy.
The persons named as Proxies will vote those Proxies that they are entitled to
vote FOR adoption of the Plan in favor of an adjournment, and will vote those
Proxies required to be voted AGAINST adoption of the Plan against such
adjournment. A share holder vote may be taken on the Plan prior to any such
adjournment if sufficient votes have been received and it is otherwise
appropriate.
1
<PAGE>
Required Vote. The favorable vote of the holders of "the majority of the
outstanding shares entitled to vote," either in person or by Proxy, at the
Meeting, provided a quorum is present, is required for adoption of the Plan. The
Investment Company Act of 1940 defines "a majority of the outstanding shares
entitled to vote" for this purpose as the lesser of: (a) more than fifty percent
(50%) of all outstanding shares entitled to vote; or (b) at least two-thirds of
all shares entitled to vote which are represented in person or by proxy at a
meeting at which more than 50% of the outstanding shares are represented either
in person or by proxy. The duly appointed proxies may, in their discretion, vote
upon such other matters as may properly come before the meeting.
A Proxy may be revoked at any time prior to its use (a) by written notice
of its revocation to the Secretary of the Fund at the above address prior to the
Meeting; (b) by the subsequent execution and return of another Proxy prior to
the Meeting; or (c) by being present and voting at the meeting, and giving oral
notice of revocation to the Chairman of the Meeting. Attendance at the Meeting
will not in and of itself constitute revocation of your Proxy.
Abstentions and broker non-votes are counted for purposes of determining
whether a quorum is present, but do not represent votes cast with respect to the
Plan. "Broker non-votes" are shares held by a broker or nominee for which an
executed Proxy is received by the Fund, but are not voted as to the Plan because
instructions have not been received from the beneficial owners or person
entitled to vote and the broker or nominee does not have discretionary voting
power.
Proxy Solicitation. Solicitation of proxies will be conducted principally by the
mailing of this Proxy Statement and the accompanying proxy card. Proxies also
may be solicited in person, by telephone, or by facsimile by the Fund's
investment advisor, Heartland Advisors, Inc. ("Heartland Advisors") or D.F. King
& Co., Inc. Authorizations to execute proxies may be obtained by telephone or
electronically. If proxies are executed pursuant to telephonic or electronic
authorization, Heartland will use procedures designed to authenticate
shareholders' identities, to allow shareholders to authorize the voting of their
shares in accordance with their instructions, and to confirm that their
instructions have been properly recorded.
2
<PAGE>
Expenses in connection with the solicitation of proxies, including any
expenses in connection with telephone voting, will be borne by the Fund's
investment advisor, Heartland Advisors. Upon request, Heartland Advisors will
reimburse brokers, dealers, banks and voting trustees, or their nominees, for
reasonable expenses incurred in forward ing copies of the proxy materials to the
beneficial owners of shares which such persons hold of record. Additional
solicitation may be performed by officers and employees of Heartland Advisors,
without special compensation, or by third party solicitors. The Fund has engaged
D.F. King & Co., Inc. to be available to assist in the solicitation of proxies,
if needed, for estimated fees of up to approximately $10,000 plus reasonable
out-of-pocket expenses.
PROPOSAL
ADOPTION OF THE PLAN OF LIQUIDATION
OF THE FUND
At a meeting of the Fund's Board of Directors held on September 15, 1999,
the Directors approved a resolution to recommend to the Fund's shareholders that
the Fund be liquidated in accordance with the Plan. A copy of the Plan is
attached as Appendix A to this Proxy Statement. All descriptions of the Plan in
this Proxy Statement are qualified in their entirety by reference to the terms
of the Plan.
If the Plan is adopted by the Fund's shareholders, the Board of Directors
will proceed on behalf of the Fund to implement the provisions of the Plan as
expeditiously as they deem practicable and in accordance with Maryland law. Such
action will include, among other things, distribution to the shareholders of the
Fund's remaining assets, which will be converted to cash, and termination of the
Fund. The Advisor voluntarily has agreed to pay out of its own funds all costs
of the liquidation, including the costs of preparing, printing and mailing this
proxy statement, proxy solicitation and tabulation fees and other costs
associated with the Meeting, legal fees and accounting fees, but excluding
brokerage commissions incurred by the Fund in selling its portfolio securities,
which will be borne by the Fund.
Background of and Reason for the Plan
As of September 30, 1999 total assets of the Fund stood at approximately
$7.0 million, after peaking at over $50 million in the spring of 1998. The
decline in assets is attributable to both depreciation in the market prices of
securities in the Fund's investment portfolio and shareholder redemptions. The
table below shows the SEC standardized average annual total returns for the Mid
Cap Value Fund for the periods indicated, and compares those returns to the
average annual total returns of the S&P Mid Cap 400 Index for the same periods.
3
<PAGE>
The S&P Mid Cap 400 Index is an unmanaged index of 400 stocks generally
representative of the mid cap market.
Average Annual Total Return (through September 30, 1999)
--------------------------------------------------------
<TABLE>
<CAPTION>
One Year Since Inception (10/11/96)
-------- --------------------------
<S> <C> <C>
Mid Cap Value Fund 15.66% -1.33%
S&P Mid Cap 400 Index 25.50% 17.87%
</TABLE>
Since October 1, 1997, Heartland Advisors has been subsidizing the Fund's
results of operations by voluntarily waiving fees and/or reimbursing expenses.
Heartland Advisors voluntarily has agreed to waive fees and reimburse expenses
of the Fund through April 30, 2000, so that the Fund's annual operating expenses
will be capped at 1.25% of average net assets. The table below shows the Fund's
actual annual operating expenses and the effect of Heartland Advisors' voluntary
waivers and reimbursements for the periods indicated. All expense ratios are
expressed as a percentage of the Fund's average net assets for the relevant
period. If the Plan is not approved, Heartland Advisors is unlikely to continue
subsidizing the Fund after April 30, 2000.
<TABLE>
<CAPTION>
For the Six Months Ended
For the Year Ended June 30, 1999
December 31, 1998 (Annualized)
--------------------------------------------- ----------------------------------------------
Ratio Dollar Amount Ratio Dollar Amounts
------------------ ------------------------ ------------------ ------------------------
<S> <C> <C> <C> <C>
Management fees 0.75% $ 308,896 0.75% $ 186,306
Distribution (12b-1) fees 0.25 102,965 0.25 62,102
Other Expenses 0.34 136,679 0.81 200,024
----- --------- ----- --------
Total fund operating expenses 1.34 548,540 1.81 448,432
Fee waiver and expense reim- (0.09) (43,246) (0.56) (138,882)
bursement ----- --------- ----- --------
Net fund operating expenses 1.25% $ 505,294 1.25% $ 309,550
===== ========= ===== ========
</TABLE>
- -----------------
Although Heartland Advisors continues to believe in the "value" investment
style and further believes mid cap companies offer a rich opportunity for value
investors, it has concluded that the Fund's performance record makes it unlikely
that the Fund can achieve meaningful asset growth in the near-term that is
required for the Fund to become economically
4
<PAGE>
viable and competitive. It is expected that net redemptions will continue making
improvements in performance even more difficult.
Heartland Advisors believes there are a number of reasons for the Fund's
under performance. The extended bear market in stocks of companies with mid and
small capitalizations has caused the fund to underperform broad-based market
indices. In addition, the Fund has underperformed its mid-cap peer group as
measured by the S&P Mid Cap 400 Index and other mutual funds in mid cap
categories compiled by independent rating services because, among other reasons,
the median market cap size for the Fund has tended to be on the lower end of the
range of market capitalizations of companies within the index and mutual funds
within the categories. Finally, the fund's "value" style of investing, which
involves selecting stocks that are believed to be undervalued relative to
company stock prices, has not done well in recent months during which the stock
market has favored a "growth" style of investing which focuses on growth rates
Heartland Advisors believes the Fund will continue to experience net
redemptions adversely affecting Fund expenses and investment performance. Given
this outlook and the Fund's under performance, the Board of Directors has
determined that the Fund is no longer viable, and that it is in the best
interests of the Fund's shareholders to liquidate the Fund. The Board of
Directors recognizes that a liquidation is a taxable transaction, but they
believe few shareholders will recognize taxable gain as a result of the
liquidation. See "Tax Consequences of the Plan to Shareholders" below.
Plan of Liquidation
If the Plan is approved by shareholders, Heartland Advisors will proceed to
sell all of the Fund's portfolio securities and other assets for cash. The Fund
will apply the cash proceeds to the payment, satisfaction and discharge of all
its existing debts and obligations and distribute the remaining proceeds to
shareholders in a liquidating distribution. Thereafter, the Fund will terminate
its operations, and wind up its affairs.
If the Plan is approved on November 30, 1999, the Fund expects the
liquidating distribution will be paid to shareholders on December 3, 1999.
However, the exact date of the distribution depends on the time required to
liquidate the assets of the Fund. Thus, while the Fund will be liquidated as
expeditiously as is prudent upon approval of the Plan, there can be no guarantee
that the liquidation will in fact be completed on December 3, 1999.
Shareholders may redeem their shares at net asset value on any business day
through and including the date of the liquidating distribution. Shareholders are
directed to the section titled "Redeeming Shares" in the Fund's Prospectus for
more information on redemptions. No shareholder will have any dissenter's rights
or right of appraisal with respect to the liquidation and dissolution of the
Fund.
5
<PAGE>
Tax Consequences of the Plan to Shareholders
The following is a summary of the federal income tax consequences of
implementing the Plan to shareholders. Shareholders should consult with their
own tax advisers for advice regarding the application of current federal tax law
in their particular situations and with respect to state, local, foreign, and
other tax consequences of the plan.
The liquidation will be a taxable transaction to shareholders.
Shareholders will recognize a gain or loss with respect to liquidation proceeds
they receive, based on the difference between the value of those proceeds and
the shareholder's tax basis in the Fund shares surrendered in the liquidation.
The gain or loss will be a long-term capital gain or loss if a shareholder has
held the Fund shares as a capital asset for more than one year.
The deduction of capital losses in excess of capital gains is limited. All
capital gains and losses recognized by a shareholder in a year must be totaled,
and any capital loss will be deductible only to the extent of capital gains
plus, in the case of a non-corporate taxpayer, up to $3,000 of ordinary income.
Non-corporate shareholders may carry forward their net capital loss in future
years until the loss is exhausted. A corporation may not use a capital loss to
offset ordinary income, but generally may carry a capital loss back three years
and forward for five years. Currently the maximum federal ordinary income tax
rate for an individual is 39.6%, and the maximum long-term capital gains tax
rate is 20%. Short-term capital gains that are not offset against capital losses
are taxed at the taxpayer's ordinary income tax rate.
Immediately prior to completion of the liquidation, the Fund will make a
final distribution of its net investment income and short-term capital gains, if
any, which will be taxable to each shareholder as ordinary income. The Fund
will also recognize gain or loss on the disposition of its portfolio securities
in connection with the liquidation. It is expected that the Fund will have net
capital losses at the time of liquidation. Therefore, if there are any net
capital gains recognized by the Fund from such disposition, those gains will
likely be offset by the Fund's capital loss carry forwards and thus will not
need to be recognized by the shareholders for tax purposes. The balance of the
Fund's net capital loss carry forwards, if any, after disposition of its
portfolio securities will not carry over or otherwise be available to offset any
capital gains that the Fund shareholders may have in the future.
The consummation of these and the other transactions contemplated by the
Plan will be treated as a plan of complete liquidation for tax purposes.
The Board of Directors of the Fund recommends that you vote FOR approval of
the plan of liquidation.
OTHER BUSINESS
6
<PAGE>
The Board of Directors has not been informed and is not aware that any
other business will be brought before the Meeting other than the matter set
forth in this Proxy Statement. However, it is the intention of the persons
acting pursuant to the enclosed Proxy card to vote the shares represented by
such Proxies in accordance with their best judgment with respect to any other
matter that may be properly presented to the Meeting or any adjournment thereof.
By signing and returning your Proxy card, you give the Proxy holder
discretionary authority as to any such matter or matters.
SECURITY OWNERSHIP
The following table sets forth information with respect to each shareholder
that was known to hold of record or beneficially own 5% or more of the
outstanding shares of the Fund as of September 17, 1999:
<TABLE>
<CAPTION>
Number of Shares
Name and Address and Nature of Ownership Percent of Fund
---------------- ----------------------- ---------------
<S> <C> <C>
Charles Schwab &
Co., Inc. 209,578 21.7%
Attn: Mutual Funds
101 Montgomery Street
San Francisco,
CA 94104-4122
</TABLE>
As of September 17, 1999, the current Directors and Executive Officers of
the Fund beneficially owned shares of the Fund as follows:
<TABLE>
<CAPTION>
Name Number of Shares Beneficially Owned
---- -----------------------------------
<S> <C>
William J. Nasgouitz 9,344
Kenneth J. Della 1,136
Patrick J. Retzer 18,703
Paul T. Beste 1,035
Directors and Executive Officers as a group
(11 Persons) 30,218
</TABLE>
(1) Includes 18,703 shares as to which the reporting person had sole voting
power, but as to which he disclaims beneficial ownership.
7
<PAGE>
ADDITIONAL INFORMATION
Financial Statements
The Fund's audited financial statements, the related footnotes and the
Report thereon of PricewaterhouseCoopers, LLP, independent public accountants,
contained in the Fund's Annual Report to Shareholders as of December 31, 1998
and for the fiscal year then ended are hereby incorporated by reference. The
unaudited financial statements and related notes of the Fund contained in its
Semi-Annual Report to Shareholders as of June 30, 1999 and for the period then
ended are hereby incorporated by reference. The Fund's Annual and Semi-Annual
Reports to Shareholders may be obtained as described below under the caption
"Reports to Shareholders".
Service Providers
Heartland Advisors, 790 North Milwaukee, Street, Milwaukee, Wisconsin
53202, is the Fund's investment advisor. It also serves as the Fund's
principal distributor and administrator. Firstar Bank Milwaukee, N.A., 777 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202, is the Fund's custodian, and
Firstar Mutual Fund Services, LLC, 615 East Michigan Street, Milwaukee,
Wisconsin 53202, is the Fund's transfer and dividend disbursing agent.
PricewaterhouseCoopers LLP, 100 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, serves as independent accountants and auditors to the Fund.
Representatives of PricewaterhouseCoopers are expected to be present at the
Meeting, and will be provided an opportunity to make a statement if they so
choose and will be available to respond to appropriate questions.
Shareholder Meetings
The Fund is not required to hold annual meetings of shareholders. The Fund
is not required to hold a shareholder meeting in any year in which the election
of directors, approval of an investment advisory agreement or ratification of
the selection of independent public accountants is not required to be acted
upon. Meetings of shareholders of the Fund will be held when and as determined
to be necessary by the Board of Directors and as required by the Investment
Company Act of 1940. However, shareholders of the Fund wishing to submit
proposals for inclusion in a proxy statement for any future shareholder meetings
should send their written proposals to the Secretary of the Fund, c/o Heartland
Advisors, Inc., 790 North Milwaukee Street, Milwaukee, Wisconsin 53202.
Reports to Shareholders
The Fund's Annual Report dated December 31, 1998, and Semi-Annual Report
dated June 30, 1999, have been sent to shareholders of the Fund. Upon request,
the Fund will furnish to shareholders, without a charge, a copy of its Annual
and Semi-Annual Reports. All shareholder requests should be directed to
Heartland Advisors, Inc., 790 North Milwaukee Street, Milwaukee, Wisconsin
53202, by telephoning 1-800-432-7856 or by contacting our website at
www.heartlandfunds.com. The SEC also maintains a website at www.sec.gov that
contains documents filed by the Fund. Shareholders can read and print them by
entering the EDGAR database on the SEC's website and following the
directions.
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By Order of the Board of Directors
JILAINE HUMMEL BAUER
Secretary
Milwaukee, Wisconsin
October 11, 1999
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Appendix A
HEARTLAND GROUP, INC.
HEARTLAND MID CAP VALUE FUND
PLAN OF LIQUIDATION
The following Plan of Liquidation (the "Plan") of the Heartland Mid Cap
Value Fund (the "Fund") shall be effective only upon the approval of the Plan at
a Special Meeting of Shareholders by the affirmative vote of the holders of a
majority of the outstanding shares of the Fund as of the Record Date.
Article I. Actions to be Taken Prior to Liquidation of the Fund:
(a) As directed by the Board of Directors, the Fund shall proceed with
the business of winding up its affairs.
(b) The proper officers of the Fund are hereby authorized to perform
such acts, execute and deliver such documents, and do all the
things as may be reasonably necessary or advisable to complete
the liquidation and dissolution of the Fund, including, but not
limited to, the following: (i) fulfill or discharge the contracts
of the Fund; (ii) collect the Fund's assets; (iii) sell, convey,
assign, exchange, transfer or otherwise dispose of all or any part
of the remaining property and assets of the Fund to one or more
persons at public or private sale for consideration which may
consist in whole or in part of cash, securities or other property
of any kind; (iv) discharge or pay the liabilities of the Fund;
(v) prosecute, settle or compromise claims of the Fund or to which
the Fund is subject; (vi) file final state and federal tax returns
and any amendments thereto; and (vii) do or cause to be done all
other acts necessary or appropriate to liquidate the business of
the Fund.
Article II. State and Regulatory Filings; Delisting
(a) The proper officer(s) shall prepare (or have prepared) and file
with the Maryland Department of Assessments and Taxation Articles
Supplementary to Heartland Group, Inc.'s Articles of Incorporation
reflecting the elimination of the series of Heartland Group,
Inc.'s Common Stock known as the Heartland Mid Cap Value Fund.
(b) The proper officer(s) shall make any other filings that are
required under the Maryland General Corporation Law in order for
the Fund to be liquidated.
(c) The proper officer(s) will notify the Commodity Futures Trading
Commission and the National Futures Association of the Fund's
termination, if necessary or appropriate.
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Article III. Liquidation Procedures
(a) The proper officer(s) of the Fund shall cause to be prepared a
notice to shareholders to prove their interests in the Fund, and
to mail such notice, together with a form of letter of transmittal
for the surrender of share certificates and such other information
as said officers shall find necessary or desirable, to
shareholders of record of the Fund as of October 4, 1999, selected
by the said officers.
(b) The proper officer(s) of the Fund shall apply the Fund's assets to
the payment, satisfaction and discharge of all existing debts and
obligations of the Fund, including necessary expenses of
liquidation, and distribute in one or more payments the remaining
assets and all dividend income and investment company net capital
gain among the shareholders of the Fund, with each shareholder
receiving his proportionate share of each payment.
(c) The proper officer(s) of the Fund may, if such officers deem it
appropriate, establish a reserve to meet the costs of its
liquidation, including the costs of its deregistration as an
investment company under the 1940 Act and its required tax
filings, and any contingent liabilities of the Fund, including any
claims or actions to which the Fund is or may be subject, and any
amount that is placed in such reserve shall be deducted from the
net assets distributable to shareholders until the contingent
liabilities have been settled or otherwise determined and
discharged.
(d) In the event that the Fund is unable to distribute all of the net
assets distributable to shareholders because of the inability to
locate shareholders to whom liquidation distributions are payable,
the proper officer(s) of the Fund may create in the name and on
behalf of the Fund a liquidation trust with a financial
institution and, subject to applicable abandoned property laws,
deposit any remaining assets of the Fund in such trust for the
benefit of the stockholders that cannot be located. The expense of
any such trust shall be charged against the assets held therein.
HEARTLAND GROUP, INC.,
Heartland Mid Cap Value Fund
By:
/s/ William J. Nasgovitz
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William J. Nasgovitz, President
ATTEST:
/s/ Jilaine Hummel Bauer
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Jilaine Hummel Bauer, Secretary
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[Heartland
Logo] Heartland Funds
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AMERICA'S VALUE INVESTOR
CONTROL NUMBER:
999 999 999 9
To Vote By Telephone:
Heartland Mid Cap Value Fund
1. Read the Proxy Statement and have
your Proxy Card at hand.
2. Call Toll-free 1-888-221-0607.
3. Enter the 14-digit Control Number
found on your Proxy Card.
4. Follow the simple instructions.
Revocable Proxy for Special Meeting of Shareholders. This Proxy Is Solicited on
Behalf of the Board of Directors
The undersigned hereby appoints William J. Nasgovitz, Patrick J. Retzer and
Williard H. Davidson, 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 Shareholders of the Heartland Mid Cap Value Fund to be held on the
Eighth Floor of the Milwaukee Athletic Club, 758 North Broadway, Milwaukee,
Wisconsin at 10:00 a.m. on Tuesday, November 30, 1999, 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.
The Proposal affecting your Fund is listed on the reverse side. Be sure to read
the detailed discussion of this proposal in the Proxy Statement.
Dated: ___________________, 1999
(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.)
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BE SURE TO SIGN YOUR PROXY CARD!
HEARTLAND
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Shares represented by this proxy will be voted as directed by the Shareholder.
IF NO DIRECTION IS SUPPLIED, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
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Please vote by filling in the appropriate box below using blue or black ink or
dark pencil. Do Not use red ink.
FOR AGAINST ABSTAIN
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1. To consider and adopt a Plan of [_] [_] [_]
Liquidation pursuant to which the
Fund's assets will be liquidated,
known liabilities satisfied and
remaining proceeds distributed to
shareholders.
2. To transact such other business as [_] [_] [_]
may properly come before the
meeting.
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