<PAGE>
File Numbers 33-12047 and 811-5027
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment Number
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Post-Effective Amendment Number 11
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment Number 11
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(Check appropriate box or boxes)
MIMLIC CASH FUND, INC.
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(Exact name of Registrant as Specified in Charter)
400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101
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(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 665-3826
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ERIC J. BENTLEY, 400 ROBERT STREET NORTH, ST. PAUL, MINNESOTA 55101
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(Name and Address of Agent for Service)
Copy to:
Michael J. Radmer, Esquire
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402-1498
APPROXIMATE DATE OF PROPOSED OFFERING: As soon as practicable after this
Registration Statement becomes effective.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
immediately upon filing pursuant to paragraph (b)
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X On January 30, 1998 pursuant to paragraph (b)
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60 days after filing pursuant to paragraph (a)(1)
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on (date) pursuant to paragraph (a)(1)
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75 days after filing pursuant to paragraph (a)(2)
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on (date) pursuant to paragraph (a)(2) of Rule 485.
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IF APPROPRIATE, CHECK THE FOLLOWING BOX:
this post-effective amendment designates a new effective date
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for a previously filed post-effective amendment.
TITLE OF SECURITIES BEING REGISTERED:
Common Shares, Par Value $.01 Per Share
<PAGE>
MIMLIC CASH FUND, INC.
Registration Statement on Form N-1A
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CROSS REFERENCE SHEET
Pursuant to Rule 481(a)
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ITEM NO. PROSPECTUS HEADING
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1. Cover Page . . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . . Fees and Expenses
3. Condensed Financial Information . . . . . Condensed Financial
Information; Investment
Performance
4. General Description of Registrant . . . . Investment Objectives and
Policies; Investment
Restrictions; Risks of
Investing in the Fund;
Management of the Fund;
General Information
5. Management of the Fund . . . . . . . . . . Management of the Fund;
General Information
6. Capital Stock and Other Securities . . . . Dividends; Taxes; General
Information
7. Purchase of Securities Being Offered . . . Purchase of Fund Shares
8. Redemption or Repurchase . . . . . . . . . Redemption of Fund Shares
9. Pending Legal Proceedings . . . . . . . . Not Applicable
STATEMENT OF ADDITIONAL
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ITEM NO. INFORMATION HEADING
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10. Cover Page . . . . . . . . . . . . . . . . Cover Page
11. Table of Contents . . . . . . . . . . . . Table of Contents
12. General Information and History . . . . . Not Applicable
13. Investment Objectives and Policies . . . . Investment Objectives and
Policies; Investment
Restrictions
14. Management of the Fund . . . . . . . . . . Directors and Executive
Officers; Director Liability
15. Control Persons and Principal Holders
of Securities . . . . . . . . . . . . . . Capital Stock and Ownership of
Shares
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16. Investment Advisory and Other Services . . Investment Advisory and Other
Services
17. Brokerage Allocation . . . . . . . . . . . Portfolio Transactions and
Brokerage
18. Capital Stock and Other Securities . . . . Capital Stock and Ownership of
Shares
19. Purchase, Redemption and Pricing
of Securities Being Offered . . . . . . . Shareholder Services;
Redemptions; Amortized Cost
Method of Portfolio Valuation
20. Tax Status . . . . . . . . . . . . . . . . Distributions and Tax Status
21. Underwriters . . . . . . . . . . . . . . . Investment Advisory and Other
Services
22. Calculation of Performance Data . . . . . Calculation of Performance
Data
23. Financial Statements . . . . . . . . . . . Financial Statements
<PAGE>
PART A. INFORMATION REQUIRED IN A PROSPECTUS
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<PAGE>
PROSPECTUS
MIMLIC CASH FUND, INC.
400 Robert Street North
St. Paul, Minnesota 55101
(612) 665-3826
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MIMLIC Cash Fund, Inc. (the "Fund") is a "no-load" mutual fund seeking
a high level of current income consistent with preservation of capital and
maintenance of liquidity. The Fund invests exclusively in debt securities
maturing in 397 calendar days or less from the date of acquisition by the Fund.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
Shares of the Fund are not offered to the general public. They are
sold only to persons who have previously entered into investment advisory
agreements (the "Advisory Clients") directly with the Fund's investment adviser
or with other affiliated investment advisers (the "Qualifying Advisers"), and
may be purchased only with funds managed by the Qualifying Advisers. No
investment advisory fee or other expenses, except custodian fees and brokerage
commissions (if any), are charged to the Fund. Other than custodian fees and
brokerage commissions, expenses associated with the Fund's operations and the
registration and sale of its shares are assumed by the Fund's investment adviser
or by its underwriter.
This Prospectus concisely describes the information which you ought to
know before investing. Please read it carefully and keep it for future
reference.
A Statement of Additional Information about the Fund dated
January 30, 1998, is available free of charge. Write to the Fund at 400 Robert
Street North, St. Paul, Minnesota 55101, or telephone (612) 665-3826. The
Statement has been filed with the Securities and Exchange Commission and is
incorporated by reference in this Prospectus.
Shares of the Fund are offered for sale by Ascend Financial
Services, Inc. ("Ascend Financial"). There is no sales charge. Ascend
Financial is a subsidiary of The Minnesota Mutual Life Insurance Company
("Minnesota Mutual").
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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.
Dated January 30, 1998
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FEES AND EXPENSES
The purpose of this table is to assist the investor in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly.
Shareholder Transaction Expenses
Maximum sales load imposed on purchases (as a
percentage of offering price). . . . . . . . . . . 0%
Sales load imposed on reinvested dividends. . . . . . . 0
Redemption fees . . . . . . . . . . . . . . . . . . . 0
Annual Fund Operating Expenses
(as a percentage of average net assets)
Investment advisory fees. . . . . . . . . . . . . . . . 0%
Other expenses. . . . . . . . . . . . . . . . . . . . . .07%
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Total Fund Operating Expenses. . . . . . . . . . . . . . . . .07%
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Example
An investor would pay the following expenses on a $1,000 investment
assuming (1) 5% annual return and (2) redemption at the end of each time period.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$1 $2 $4 $9
The example contained in the table should not be considered a
representation of past or future expenses. Actual expenses may be greater or
less than those shown.
Because shares of the Fund will be sold only to the Advisory Clients,
and may be purchased only with funds managed by the Qualifying Advisers for the
Advisory Clients, the Fund pays no advisory fee. In addition, Advantus Capital
pays all expenses of the Fund, except custodian fees, brokerage commissions and
those expenses expressly assumed by the Fund's underwriter.
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FINANCIAL HIGHLIGHTS
The following financial highlights table shows certain per share data and
selected important financial information for evaluating the Fund's results.
This information has been audited by KPMG Peat Marwick LLP, independent
auditors, and should be read in conjunction with the audited financial
statements contained in the Fund's Annual Report to Shareholders.
<TABLE>
<CAPTION>
Period from
November 1,
Years ended September 30, 1993 to Years ended October 31,
-------------------------- September 30, ---------------------------
1997 1996 1995(f) 1994 (a) 1993 1992
------- ------- ------- ------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------------- ------- -------
Income from investment operations:
Net investment income..................... .0556 .0547 0.0571 0.0342 0.0320 0.0402
-------- ------- ------- ------------- ------- -------
Total from investment operations........ .0556 .0547 0.0571 0.0342 0.0320 0.0402
-------- ------- ------- ------------- ------- -------
Less distributions:
Dividends from net investment income...... (.0556) (.0547) (0.0571) (0.0342) (0.0320) (0.0402)
-------- ------- ------- ------------- ------- -------
Total distributions..................... (.0556) (.0547) (0.0571) (0.0342) (0.0320) (0.0402)
-------- ------- ------- ------------- ------- -------
Net asset value, end of period................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- ------- ------- ------------- ------- -------
-------- ------- ------- ------------- ------- -------
Total return (c) ............................. 5.69% 5.61% 5.87% 3.49% 3.25% 4.10%
Net assets, end of period (in thousands) ..... $14,194 $9,541 $10,922 $12,316 $16,927 $21,047
Ratio of expenses to average daily
net assets (d)............................ .07%(g) .09%(g) 0.10%(g) 0.08%(e) 0.07% 0.06%
Ratio of net investment income to
average daily net assets (d) ............. 5.51% 5.52% 5.71% 3.68%(e) 3.20% 4.12%
Period from
August 14,
Years ended October 31, 1987 (b) to
------------------------------------ October 31,
1991 1990 1989 1988 1987
------- ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- ------- ------- ------- ------------
Income from investment operations:
Net investment income..................... 0.0638 0.0818 0.0902 0.0569 0.0100
-------- ------- ------- ------- ------------
Total from investment operations........ 0.0638 0.0818 0.0902 0.0569 0.0100
-------- ------- ------- ------- ------------
Less distributions:
Dividends from net investment income...... (0.0638) (0.0818) (0.0902) (0.0569) (0.0100)
-------- ------- ------- ------- ------------
Total distributions..................... (0.0638) (0.0818) (0.0902) (0.0569) (0.0100)
-------- ------- ------- ------- ------------
Net asset value, end of period................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
-------- ------- ------- ------- ------------
-------- ------- ------- ------- ------------
Total return (c) ............................. 6.57% 8.49% 9.40% 5.85% 1.04%
Net assets, end of period (in thousands) ..... $32,691 $21,452 $21,865 $10,328 $150
Ratio of expenses to average daily
net assets (d)............................ 0.08% 0.09% 0.13% 0.13% --
Ratio of net investment income to
average daily net assets (d) ............. 6.21% 8.18% 8.98% 7.68% 5.84%(e)
</TABLE>
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(a) During 1994, the Fund changed its fiscal year end from October 31 to
September 30.
(b) The inception of the Fund was January 26, 1987. However, the Fund's
shares did not become effectively registered under the Securities Act of
1933 until August 14, 1987. Financial highlights are not presented for
the period from January 26, 1987 to August 13, 1987 as the Fund's shares
were not registered during that period.
(c) Total return figures are based on a share outstanding throughout the
period and assumes reinvestment of distributions at net asset value. For
periods less than one year, total return presented has not been annualized.
(d) The Fund's Adviser voluntarily absorbed $215 and $2,115 in expenses for the
years ended October 31, 1989 and 1988, respectively. If the Fund had been
charged for these expenses the ratio of expenses to average daily net
assets would have been .13% and .17%, respectively, and the ratio of net
investment income to average daily net assets would have been 8.98% and
7.64%, respectively. The Fund did not begin to accrue expenses until
August 31, 1988.
(e) Adjusted to an annual basis.
(f) Effective March 1, 1995, the Fund entered into a new investment advisory
agreement with Advantus Capital Management, Inc. Prior to March 1,
1995, the Fund had an investment advisory agreement with MIMLIC Asset
Management Company.
(g) Effective fiscal year 1995, the ratio of expenses to average daily net
assets is based on total expenses of the Fund before reduction of interest
credits earned on cash balances.
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<PAGE>
INVESTMENT PERFORMANCE
From time to time the Fund advertises its "current yield" and
"effective yield." Both yield figures are based on historical earnings, show
the performance of a hypothetical investment, and are not intended to indicate
future performance. The "current yield" of the Fund refers to the income
generated by an investment in the Fund over a seven-day 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 that week is assumed
to be generated each week over a 52-week period and is shown as a percentage of
the investment. The "effective yield" is calculated similarly but, when
annualized, the income earned by an investment in the Fund is assumed to be
reinvested. The "effective yield" will be higher than the "current yield"
because of the compounding effect of this assumed reinvestment. "Current yield"
and "effective yield" will vary based upon, among other things, changes in
market conditions, the level of interest rates and the level of the Fund's
expenses.
For additional information regarding the calculation of yield see the
Statement of Additional Information.
INVESTMENT OBJECTIVES AND POLICIES
MIMLIC Cash Fund, Inc. is a mutual fund designed to meet the short-
term investment needs of the Advisory Clients by seeking a high level of current
income to the extent consistent with preservation of capital and maintenance of
liquidity. This investment objective of the Fund may not be changed without the
approval of a majority of the outstanding shares of the Fund. The Fund's other
investment policies may be changed at any time without shareholder approval,
although shareholders will be notified of those changes.
The Fund plans to achieve its objective by pooling daily the Advisory
Clients' cash available for short-term investment and investing in a diversified
portfolio of money market instruments. There can be no assurance that the Fund
will achieve its objective.
The Fund is subject to the investment restrictions of Rule 2a-7 under
the Investment Company Act of 1940, as amended (the "1940 Act"), in addition to
its other policies and restrictions discussed below. Pursuant to Rule 2a-7, the
Fund is required to invest exclusively in securities that mature within 397 days
from the date of purchase and to maintain an average weighted maturity of not
more than 90 days. Rule 2a-7 also requires that all investments by the Fund be
limited to United States dollar-denominated investments that (a) present
"minimal credit risk" and (b) are at the time of acquisition "Eligible
Securities." Eligible Securities include, among others, securities that are
rated by two Nationally Recognized Statistical Rating Organizations ("NRSROs")
in one of the two highest categories for short-term debt obligations, such as
A-1 or A-2 by Standard & Poor's Corporation, or Prime-1 or Prime-2 by Moody's
Investors Service, Inc.
Rule 2a-7 also requires, among other things, that the Fund may not
invest, other than in United States "Government securities" (as defined in the
1940 Act), (a) more than 5% of its total assets in Second Tier Securities (i.e.,
Eligible Securities that are not rated by two NRSROs
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<PAGE>
in the highest category such as A-1 and Prime-1) and (b) more than the greater
of 1% of its total assets or $1,000,000 in Second Tier Securities of any one
issuer. The Fund's present practice is not to purchase any Second Tier
Securities.
Subject to these limitations, the Fund will invest in a managed
portfolio of money market instruments as follows:
- Obligations issued or guaranteed as to principal or interest by the
United States Government, or any agency or authority controlled or
supervised by and acting as an instrumentality of the United States
Government pursuant to authority granted by Congress.
- Obligations (including certificates of deposit and bankers
acceptances) of United States banks, savings and loan associations and
savings banks which at the date of the investment have total assets (as of
the date of their most recent annual financial statements) of not less than
$2 billion; U.S. dollar denominated obligations of Canadian chartered
banks, London branches of United States banks, and United States branches
or agencies of foreign banks if such banks meet the above-stated asset size
(see "Risks of investing in the Fund"); and obligations of any United
States banks, savings and loan associations and savings banks, regardless
of the amount of their total assets, provided that the amount of the
obligations does not exceed $100,000 for any one United States bank,
savings and loan association or savings bank and the payment of the
principal is insured by the Federal Deposit Insurance Corporation.
- Obligations of the International Bank for Reconstruction and
Development.
- Commercial paper (including variable amount master demand notes)
issued by United States limited partnerships, corporations or affiliated
foreign corporations.
- Other corporate debt obligations that at the time of issuance were
long-term securities, but that have remaining maturities of 397 calendar
days or less.
- Repurchase agreements with respect to any of the foregoing
obligations.
- Forward purchase arrangements committing the Fund to purchase any of
the foregoing obligations at an agreed upon price and future date.
By limiting the maturity of its investments as described above, the
Fund seeks to lessen the changes in the value of its assets caused by market
factors. The Fund intends to maintain a constant net asset value of $1.00 per
share, but there can be no assurance it will be able to do so.
U.S. Government obligations are bills, certificates of indebtedness,
notes and bonds issued or guaranteed as to principal or interest by the United
States or by agencies or authorities controlled or supervised by and acting as
instrumentalities of the U.S. Government established under the authority granted
by Congress, including, but not limited to, the Government National Mortgage
Association, the Export-Import Bank, the Student Loan Marketing Association, the
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<PAGE>
U.S. Postal Service, the Tennessee Valley Authority, the Bank for Cooperatives,
the Farmers Home Administration, the Federal Home Loan Bank, the Federal
Financing Bank, the Federal Intermediate Credit Banks, the Federal Land Banks,
the Farm Credit Banks and the Federal National Mortgage Association. Some
obligations of U.S. Government agencies, authorities and other instrumentalities
are supported by the full faith and credit of the U.S. Treasury, such as
securities of the Government National Mortgage Association and the Export-Import
Bank; others by the right of the issuer to borrow from the Treasury, such as
securities of the Student Loan Marketing Association, the Federal Financing Bank
and the U.S. Postal Service; and others only by the credit of the issuing
agency, authority or other instrumentality, such as securities of the Federal
Home Loan Bank and the Federal National Mortgage Association.
Securities issued or guaranteed as to principal and interest by the
United States Government may also be acquired in the form of custodial receipts
that evidence ownership of future interest payments, principal payments or both
on certain United States Treasury notes or bonds. Such notes and bonds are held
in custody by a bank on behalf of the owners. These custodial receipts are
known by various names, including "Treasury Receipts," "Treasury Investment
Growth Receipts" ("TIGR's") and "Certificates of Accrual on Treasury Securities"
("CATS"). The Fund may also invest in separately traded principal and interest
components of securities issued or guaranteed by the United States Treasury.
The principal and interest components of selected securities are traded
independently under the Separate Trading of Registered Interest and Principal of
Securities program ("STRIPS"). Under the STRIPS program, the principal and
interest components are individually numbered and separately issued by the U.S.
Treasury at the request of depository financial institutions, which then trade
the component parts independently.
Custodial receipts (including Treasury Receipts, TIGR's and CATS) and
STRIPS are sold on a yield basis which represents a compounded rate of return
(bond equivalent yield). The amount of discount therefore depends upon the
maturity of the custodial receipt or STRIP--the longer the maturity the deeper
the discount. Certain of these instruments are available in maturities as long
as thirty years, but the Fund will purchase custodial receipts and STRIPS only
where the time remaining to maturity does not exceed one year. Although these
instruments provide certainty as to the amount and timing of cash flows, the
rate of return on a custodial receipt or STRIP is guaranteed only if it is held
to maturity. There is no income (or reinvestment decision) between the purchase
date and maturity inasmuch as each custodial receipt or STRIP represents a
single interest (coupon) or principal component of an underlying U.S. Treasury
obligation, payable at maturity. A secondary market exists for custodial
receipts and STRIPS, and such instruments are generally thought to be liquid.
Variable amount master demand notes refer to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
They allow the investment of fluctuating amounts by the Fund at varying market
rates of interest pursuant to direct arrangements between the Fund, as lender,
and the borrower. Variable amount master demand notes permit a series of short-
term borrowings under a single note. The lender has the right to increase the
amount under the note at any time up to the full amount provided by the note
agreement. Both the lender and the borrower have the right to reduce the amount
of outstanding indebtedness at any time. Because variable amount master demand
notes are direct lending
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<PAGE>
arrangements between the lender and borrower, it is not generally contemplated
that such instruments will be traded and there is no secondary market for the
notes. Typically, agreements relating to such notes provide that the lender
shall not sell or otherwise transfer the note without the borrower's consent.
Thus, variable amount master demand notes are illiquid assets. Such notes
provide that the interest rate on the amount outstanding varies on a daily basis
depending upon a stated short-term interest rate barometer. The Fund's
investment adviser will monitor the creditworthiness of the borrower throughout
the term of the variable amount master demand note.
Repurchase agreements are agreements by which the Fund purchases a
security and obtains a simultaneous commitment from the seller (a member bank of
the Federal Reserve System or, if permitted by law or regulation and if the
Board of Directors of the Fund has evaluated its creditworthiness through
adoption of standards of review or otherwise, a securities dealer) to repurchase
the security at an agreed upon price and date. The resale price is in excess of
the purchase price and reflects an agreed upon market rate unrelated to the
coupon rate on the purchased security. Such transactions afford the Fund the
opportunity to earn a return on temporarily available cash. While the
underlying security may be a bill, certificate of indebtedness, note or bond
issued by an agency, authority or instrumentality of the United States
Government, the obligation of the seller is not guaranteed by the U.S.
Government. See "Risks of Investing in the Fund."
Forward commitments are arrangements by which the Fund agrees to
purchase a security at a fixed price on a specified future date. Delivery of
and payment for the security normally takes place 15 to 45 days after the date
of the commitment. Such arrangements might be entered into, for example, when
the Fund anticipates a decline in the yield of securities of a certain issuer
and is able to obtain a higher yield by committing currently to purchase such
securities to be issued at a later date. The Fund may enter into forward
commitments if it holds, and maintains until the settlement date in a segregated
account, cash or high-grade, short-term debt obligations in an amount sufficient
to meet the purchase price. Forward commitments involve a risk of loss if the
value of the security to be purchased declines prior to the settlement date,
which risk is in addition to the risk of decline in value of the Fund's other
assets. Although the Fund generally enters into forward commitments with the
intention of acquiring the security for its portfolio, the Fund may dispose of a
commitment prior to settlement if its investment adviser deems it appropriate to
do so. No more than 5% of the Fund's total assets may be subject to forward
commitments. Moreover, the Fund will not enter into forward commitments if and
to the extent such investments would, as determined by the Fund's investment
adviser, materially increase the risk of a significant deviation in the Fund's
net asset value per share. See "Amortized Cost Method of Portfolio Valuation"
in the Statement of Additional Information.
The Fund may also enter into reverse repurchase agreements with
respect to any of the foregoing obligations. Reverse repurchase agreements are
the counterparts of repurchase agreements, by which the Fund sells a security
and agrees to repurchase the security from the buyer at an agreed upon price and
future date. Because certain of the incidents of ownership of the security are
retained by the Fund, reverse repurchase agreements may be considered a form of
borrowing by the Fund from the buyer, collateralized by the security. The Fund
uses the proceeds of a reverse repurchase agreement to purchase other money
market securities either maturing, or under an agreement to resell, at a date
simultaneous with or prior to the expiration of the reverse
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<PAGE>
repurchase agreement. The Fund utilizes reverse repurchase agreements when the
interest income to be earned from investment of the proceeds of the reverse
repurchase transaction exceeds the interest expense of the transaction.
ILLIQUID SECURITIES AND RULE 144A PAPER--The Fund is permitted to
invest up to 10% of its net assets in illiquid investments. See "Investment
Restrictions," below. An investment is generally deemed to be "illiquid" if it
cannot be disposed of within seven days in the ordinary course of business at
approximately the amount at which the investment company is valuing the
investment. "Restricted securities" are securities which were originally sold
in private placements and which have not been registered under the Securities
Act of 1933 (the "1933 Act"). Such securities generally have been considered
illiquid by the staff of the Securities and Exchange Commission (the "SEC"),
since such securities may be resold only subject to statutory restrictions and
delays or if registered under the 1933 Act.
The SEC has acknowledged, however, that a market exists for certain
restricted securities (for example, securities qualifying for resale to certain
"qualified institutional buyers" pursuant to Rule 144A under the 1933 Act).
Additionally, Advantus Capital and the Fund believe that a similar market exists
for commercial paper issued pursuant to the private placement exemption of
Section 4(2) of the 1933 Act. The Fund may invest without limitation in these
forms of restricted securities if such securities are deemed by Advantus Capital
to be liquid in accordance with standards established by the Fund's Board of
Directors. Under these guidelines, Advantus Capital must consider (a) the
frequency of trades and quotes for the security, (b) the number of dealers
willing to purchase or sell the security and the number of other potential
purchasers, (c) dealer undertakings to make a market in the security, and (d)
the nature of the security and the nature of the marketplace trades (for
example, the time needed to dispose of the security, the method of soliciting
offers and the mechanics of transfer). At the present time, it is not possible
to predict with accuracy how the markets for certain restricted securities will
develop. Investing in restricted securities could have the effect of increasing
the level of the Fund's illiquidity to the extent that qualified purchasers of
the securities become, for a time, uninterested in purchasing these securities.
See the Statement of Additional Information for more information on
the Fund's investment policies, including additional descriptions of money
market obligations and ratings.
PORTFOLIO TURNOVER
The Fund, consistent with its investment objective, attempts to
maximize yield through portfolio trading. This may involve selling portfolio
instruments and purchasing different instruments to take advantage of
disparities of yields in different segments of the high grade money market or
among particular instruments within the same segment of the market. As a
result, the Fund may have significant portfolio turnover. There usually is no
brokerage commissions paid by the Fund for such purchases since such securities
are purchased on a net basis. Since securities with maturities of less than one
year are excluded from required portfolio turnover rate calculations, the Fund's
portfolio turnover rate for reporting purposes is zero.
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<PAGE>
INVESTMENT RESTRICTIONS
The Fund has certain investment restrictions, set forth in their
entirety in the Statement of Additional Information, some of which are
fundamental policies and may not be changed without the approval of the holders
of a majority of the outstanding shares of the Fund. The Fund will not:
- Purchase any security (other than securities issued or guaranteed by
the United States Government, its agencies or instrumentalities) if, as a
result, more than 5% of the Fund's total assets would be invested in
securities of a single issuer.
- Purchase any security if, as a result, more than 25% of the Fund's
total assets would be invested in the securities of issuers conducting
their principal business activities in a single industry; provided that (a)
telephone, gas, and electric public utilities are each regarded as separate
industries and (b) United States banks, savings and loan associations,
savings banks, and finance companies are each regarded as separate
industries for the purpose of this limitation. There are no limitations
with respect to the concentration of investments in securities issued or
guaranteed by the United States Government, its agencies or
instrumentalities, or certificates of deposit and bankers acceptances of
United States banks or their domestic branches.
- Make short sales except short sales against the box where it owns
the securities sold or, by virtue of ownership of other securities, it has
the right to obtain without payment of further consideration, securities
equivalent in kind and amount to those sold, and only to the extent that
the Fund's short positions will not at the time of any short sale aggregate
in total sale prices more than 10% of its total assets.
- Borrow money or enter into reverse repurchase agreements in excess
of 5% of its net assets and, with respect to borrowing money, only as a
temporary measure for extraordinary or emergency purposes.
- Invest more than 5% of its total assets in securities of businesses
(including predecessors) less than three years old.
- Enter into repurchase agreements maturing in more than seven days,
purchase certificates of deposit of banks and savings and loan associations
which at the date of the investment have total assets (as of the date of
their most recent annual financial statements) of less than $2 billion,
purchase variable amount master demand notes, or invest in any other
illiquid assets, if such investments taken together exceed 10% of the
Fund's net assets (this restriction is not fundamental).
RISKS OF INVESTING IN THE FUND
As with any money market fund, the value of the securities in the
Fund's portfolio can be expected to vary inversely to changes in prevailing
interest rates, with the amount of such variation depending primarily on the
period of time remaining to maturity of the security. Longer-
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<PAGE>
term obligations may fluctuate more in value than shorter-term obligations. If
the security is held to maturity, no gain or loss will be realized as a result
of interest rate fluctuations, although the day-to-day valuation of the
portfolio could fluctuate which would affect the amounts of net income available
for distribution to shareholders.
All of the Fund's investments will mature in 397 calendar days or less
from the date of acquisition by the Fund. By limiting the maturity of its
investments, the Fund seeks to lessen the changes in the value of its assets
caused by market factors. However, substantial redemptions or revised
evaluations of the issuer of portfolio securities could require the Fund to sell
portfolio securities at a time when a sale might not otherwise be favorable, and
thereby decrease the value of the Fund's assets.
Obligations of Canadian chartered banks, London branches of United
States banks, and U.S. branches and agencies of foreign banks may involve
somewhat greater opportunity for income than the other money market instruments
in which the Fund invests, but may also involve investment risks in addition to
any risks associated with direct obligations of domestic banks. These
additional risks include future political and economic developments, the
possible imposition of withholding taxes on interest income payable on such
obligations, the possible seizure or nationalization of foreign deposits, the
possible establishment of exchange controls or the adoption of other
governmental restrictions, as well as market and other factors which may affect
the market for or the liquidity of such obligations. Generally, Canadian
chartered banks, London branches of U.S. banks, and U.S. branches and agencies
of foreign banks are subject to fewer U.S. regulatory restrictions than those
applicable to domestic banks, and London branches of U.S. banks may be subject
to less stringent reserve requirements than domestic branches. Canadian
chartered banks, U.S. branches and agencies of foreign banks, and London
branches of U.S. banks may provide less public information than, and may not be
subject to the same accounting, auditing and financial record-keeping standards
as, domestic banks. The Fund will not invest more than a total of 25% of its
total assets in obligations of Canadian chartered banks, London branches of
United States banks, and U.S. branches and agencies of foreign banks.
Repurchase agreements involve the risk that the seller may fail to
repurchase the underlying security. In such event, the Fund would attempt to
dispose of the underlying security in the market or would hold the underlying
security until maturity. However, in the case of a repurchase agreement
construed by the courts as a collateralized loan, the Fund may be subject to
various delays and risks of loss in attempting to dispose of the underlying
security, including (a) possible declines in the value of the underlying
security during the period while the Fund seeks to enforce its rights thereto,
and (b) possible reduced levels of income and lack of access to income during
this period.
The use of reverse repurchase agreements by the Fund allows it to
leverage its portfolio. While leveraging offers the potential for increased
yield, it magnifies the risks associated with the Fund's investments and reduces
the stability of the Fund's net asset value per share. To limit this risk, the
Fund will not enter into a reverse repurchase agreement if all such
transactions, together with any money borrowed, exceed 5% of the Fund's net
assets. Moreover, the Fund will not enter into reverse repurchase agreements if
and to the extent such transactions would, as determined by the Fund's
investment adviser, materially increase the risk of a significant
-10-
<PAGE>
deviation in the Fund's net asset value per share. See "Amortized Cost Method
of Portfolio Valuation" in the Statement of Additional Information.
MANAGEMENT OF THE FUND
The Fund's investment adviser is Advantus Capital Management, Inc.
("Advantus Capital"). Advantus Capital commenced its business in June 1994,
and provides investment advisory services to eleven other mutual funds
(Advantus Horizon Fund, Inc., Advantus Spectrum Fund, Inc., Advantus Money
Market Fund, Inc., Advantus Mortgage Securities Fund, Inc., Advantus Bond
Fund, Inc., Advantus Cornerstone Fund, Inc., Advantus Enterprise Fund, Inc.,
Advantus International Balanced Fund, Inc., Advantus Venture Fund, Inc.,
Advantus Index 500 Fund, Inc. and Advantus Series Fund, Inc.) and various
private accounts. Advantus Capital is a wholly-owned subsidiary of MIMLIC
Asset Management Company ("MIMLIC Management"). MIMLIC Management commenced
its current business in January, 1984, and provides investment advisory
services to Minnesota Mutual and to various other private accounts. MIMLIC
Management is a subsidiary of Minnesota Mutual. Minnesota Mutual was
organized in 1880 and has assets of more than $13 billion. The address of
the Fund, Advantus Capital, MIMLIC Management, Ascend Financial, and
Minnesota Mutual is 400 Robert Street North, St. Paul, Minnesota 55101.
Advantus Capital selects and reviews the Fund's investments, and
provides executive and other personnel for the management of the Fund. The
Fund's board of directors supervises the affairs of the Fund as conducted by
Advantus Capital.
The name and title of the portfolio manager employed by Advantus
Capital who is primarily responsible for the day-to-day management of the Fund's
portfolio, the length of time employed in that position, and other business
experience during the past five years are set forth below:
<TABLE>
<CAPTION>
Portfolio Manager Primary Portfolio Business Experience During
and Title Manager Since Past Five Years
- ----------------- ----------------- --------------------------
<S> <C> <C>
Wayne R. Schmidt May 1, 1991 Vice President of Advantus Capital;
Vice President and Investment Officer of MIMLIC Management;
Portfolio Manager
</TABLE>
Because shares of the Fund will be sold only to the Advisory Clients,
and may be purchased only with funds managed by the Qualifying Advisers for the
Advisory Clients, the Fund pays no advisory fee to Advantus Capital. Advantus
Capital, under the Advisory Agreement with the Fund, acts as investment adviser
and manager for the Fund, and furnishes the Fund office space and all necessary
office facilities, equipment and personnel for servicing the investments of the
Fund. In addition, Advantus Capital pays all expenses of the Fund, except
custodian fees,
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<PAGE>
brokerage commissions and those expenses expressly assumed by the Fund's
underwriter, including the salaries and fees of all officers and directors of
the Fund, auditing and accounting fees, legal fees, and the Fund's transfer
agent, dividend disbursing agent and redemption agent expenses. Minnesota
Mutual acts as the Fund's transfer agent, dividend disbursing agent and
redemption agent.
For the fiscal year ended September 30, 1997, the expenses paid by
the Fund, as a percentage of average daily net assets, were .07%.
Ascend Financial, the underwriter of the Fund's shares, bears all
promotional expenses in connection with the distribution of the Fund's shares,
including paying for prospectuses and statements of additional information for
new shareholders, shareholder reports for new shareholders and the costs of
sales literature.
PURCHASE OF FUND SHARES
GENERALLY
Shares of the Fund may be purchased only with funds of the Advisory
Clients managed by the Qualifying Advisers. The purchase of shares of the Fund
will therefore be initiated only by the Qualifying Advisers in accordance with
the terms of the investment advisory agreements with the Advisory Clients. The
Advisory Clients, under the terms of their respective advisory agreements with
the Qualifying Advisers, have authority to instruct the Qualifying Advisers to
refrain from purchasing shares of the Fund.
The Fund's shares may be purchased from Ascend Financial (the
underwriter of the Fund's shares) at a price equal to their asset value,
which will normally be constant at $1.00 per share. There is no assurance
that the Fund can maintain the $1.00 per share value. There is no sales
charge. Ascend Financial reserves the right to reject any purchase order.
Certificates representing shares purchased are not ordinarily
issued. However, shareholders will receive written confirmation of their
purchases. Shareholders will have the same rights of ownership with respect
to such shares as if certificates had been issued. A shareholder may receive
a certificate representing shares purchased by written request to Ascend
Financial. No charge is made for any certificate issued.
MINIMUM INVESTMENTS
There is no minimum amount required for either initial or subsequent
investments.
PUBLIC OFFERING PRICE
The public offering price of Fund shares is equal to the Fund's net
asset value per share next to be determined after an order is received by the
Fund and becomes effective. The Fund's net asset value per share is determined
by adding the current value of all securities and all other assets, subtracting
liabilities, and dividing the remainder by the number of shares outstanding.
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<PAGE>
The net asset value of the Fund's shares is determined once daily,
after the declaration of daily dividend, as of the primary closing time for
business on the New York Stock Exchange (as of the date of this Prospectus the
primary close of trading is 3:00 p.m. (Central Time), but this time may be
changed), on each day, Monday through Friday, except (i) days on which changes
in the value of the Fund's portfolio securities will not materially affect the
current net asset value of Fund shares, (ii) days during which no Fund shares
are tendered for redemption and no order to purchase or sell Fund shares is
received by the Fund and (iii) customary national business holidays on which the
New York Stock Exchange is closed for trading (as of the date hereof, New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day).
The Fund values its portfolio investments at amortized cost in
accordance with Rule 2a-7 under the Investment Company Act of 1940, as amended.
See "Amortized Cost Method of Portfolio Valuation" in the Statement of
Additional Information.
REDEMPTION OF FUND SHARES
Registered holders of Fund shares may redeem their shares without any
charge at the per share net asset value (which will usually be $1.00) next
determined, at the time described in "Purchase of Fund Shares - Public Offering
Price," following receipt by the Fund (at its mailing address listed on the back
cover page) of proper notice of redemption in accordance with the procedures set
forth below. A check will normally be sent on the next business day but not
later than the seventh day following receipt of such notice. If all of the
shares in an account are redeemed, dividends accrued and unpaid at the date of
redemption will be paid when the redemption proceeds are paid.
The Qualifying Advisers, acting in accordance with the terms of the
investment advisory agreements with the Advisory Clients, will ordinarily
initiate all redemption requests with respect to shares of the Fund. The
Advisory Clients may redeem their shares directly, however, by writing to the
Fund. Such requests should be signed exactly as the account registration
appears on the account statement. If the redemption proceeds are less than
$25,000 and are to be paid to the registered holder and sent to the address of
record for that account, or if the written redemption request is from pre-
authorized trustees of plans, trusts and other tax-exempt organizations and the
redemption proceeds are less than $25,000, no signature guarantee is required.
However, if the redemption proceeds are $25,000 or more or are to be paid to
someone other than the registered holder, or are to be mailed to an address
other than the registered shareholder's address, or the shares are to be
transferred, or the request does not come from such a plan trustee, the owner's
signature must be guaranteed by an eligible guarantor institution, including (1)
national or state banks, savings associations, savings and loan associations,
trust companies, savings banks, industrial loan companies and credit unions; (2)
national securities exchanges, registered securities associations and clearing
agencies; (3) securities broker-dealers which are members of a national
securities exchange or a clearing agency or which have minimum net capital of
$100,000; or (4) institutions that participate in the Securities Transfer Agent
Medallion Program ("STAMP") or other recognized signature medallion program. A
signature guarantee is also required in connection with any redemption if,
within the 30-day period prior to
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<PAGE>
receipt of the redemption request, instructions have been received to change the
shareholder's address of record. The Fund reserves the right to require
signature guarantees on all redemptions.
DIVIDENDS
Shareholders begin earning income on the day following investment of
their funds. The net income of the Fund is determined as of the primary close
of business on the New York Stock Exchange (the "Exchange") on each day on which
the Exchange is open, and is immediately declared payable to shareholders of
record as of the close of business on the preceding day. The Fund's net income
for Saturdays, Sundays and other days on which the Exchange is closed will be
declared as dividends on the next business day. Net income includes (i) all
earned interest on portfolio investments of the Fund, plus or minus (ii) all
gains and losses on portfolio investments of the Fund, less (iii) provision for
the expenses of the Fund.
The net income of the Fund is declared as dividends daily, and is paid
on or about the last day of each month. The net income is automatically
reinvested in additional shares of the Fund (valued at net asset value on the
date of such payment, normally $1.00 per share) unless a shareholder
specifically requests the Fund in writing that the payment be made in cash.
Shareholders who redeem all of their shares at any time during the month are
paid all dividends through the date of redemption together with the proceeds of
the redemption. Shareholders who redeem less than all of their shares are paid
the proceeds of the redemption in cash; dividends with respect to the redeemed
shares are paid on the normal monthly payment date in additional shares or cash,
as the shareholder has elected.
TAXES
The following is a general summary of certain federal tax
considerations affecting the Fund and its shareholders. No attempt is made to
present a detailed explanation of the tax treatment of the Fund or its
shareholders, and the discussion here is not intended as a substitute for
careful tax planning.
During the fiscal year ended September 30, 1997, the Fund fulfilled,
and the Fund intends to continue to fulfill, the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), as a regulated
investment company. If so qualified, the Fund will not be liable for federal
income taxes to the extent it distributes its taxable income to its
shareholders.
Distributions from the Fund representing its interest income and any
short-term capital gains will be taxable to shareholders as ordinary income,
whether they are received by shareholders in cash or reinvested in additional
shares of the Fund. Such distributions will not qualify for the 70% dividend
received deduction for corporations. The Fund does not expect to realize net
long-term capital gains or losses.
Before investing in the Fund, an investor should consult a tax adviser
concerning the consequences of any local and state tax laws, and of any
retirement plan offering tax benefits.
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<PAGE>
Fund shareholders receive an annual statement detailing federal tax
information. Distributions by the Fund, including the amount of any
redemptions, will be reported to Fund shareholders in such annual statement and
to the Internal Revenue Service to the extent required by the Code. The Fund
is required by federal law to withhold 31% of reportable payments (including
dividends, capital gain distributions, and redemptions) paid to certain
accounts whose owners have not complied with IRS regulations. In order to
avoid this backup withholding requirement, each shareholder will be asked to
certify on the shareholder's account application that the social security or
taxpayer identification number provided is correct and that the shareholder
is not subject to backup withholding for previous underreporting to the IRS.
GENERAL INFORMATION
The Fund was organized in January 1987 as a Minnesota corporation.
The Fund's authorized capital stock is of only one class, common shares, with a
par value of $.01 per share. All shares of the Fund are nonassessable, fully
transferable and have one vote and equal rights to share in dividends and assets
of the Fund. The shares of the Fund possess no preemptive or conversion rights.
Cumulative voting is not authorized for the Fund. This means that the holders
of more than 50% of the shares of the Fund voting for the election of directors
of the Fund can elect 100% of the directors of the Fund if they choose to do so,
and in such event the holders of the remaining shares of the Fund will be unable
to elect any directors of the Fund.
On September 30, 1997, there were 14,268,271 Fund shares
outstanding. As of September 30, 1997 the following persons held of record
25% or more of the outstanding shares of the Fund:
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<PAGE>
Number of Percent of
Name of Shareholder Shares Class
- ------------------- --------- ----------
Minnesota Mutual and Subsidiaries 11,592,163 81.2%
Due to their ownership of more than 25% of the outstanding shares
of the Fund, the shareholders identified above may be said to control the
Fund. Minnesota Mutual, Advantus Capital, MIMLIC Management and Ascend
Financial are all organized as Minnesota corporations.
The Fund does not hold annual or periodically scheduled regular
meetings of shareholders. Regular and special shareholder meetings are held
only at such times and with such frequency as required by law. Minnesota
corporation law does not require an annual meeting; instead, it provides for the
Board of Directors to convene shareholder meetings when it deems appropriate.
In addition, if a regular meeting of shareholders has not been held during the
immediately preceding fifteen months, a shareholder or shareholders holding 3
percent or more of the voting shares of the Fund may demand a regular meeting of
shareholders of the Fund by written notice of demand given to the chief
executive officer or the chief financial officer of the Fund. Within thirty
days after receipt of the demand by one of those officers, the Board of
Directors shall cause a regular meeting of shareholders to be called and held no
later than ninety days after receipt of the demand, all at the expense of the
Fund. Additionally, the Investment Company Act of 1940 requires shareholder
votes for all amendments to fundamental investment policies and restrictions and
for all investment advisory contracts and amendments thereto.
The Fund sends to its shareholders a six-month unaudited and annual
audited financial report of the Fund, which includes a list of investment
securities held by the Fund. Shareholder inquires should be directed to the
Underwriter or the Fund at the telephone number or mailing address listed on the
cover of this Prospectus.
COUNSEL AND INDEPENDENT AUDITORS
The firm of Dorsey & Whitney LLP, 220 South Sixth Street,
Minneapolis, Minnesota 55402-1498, is the general counsel for the Fund. KPMG
Peat Marwick LLP, 4200 Norwest Center, 90 South Seventh Street, Minneapolis,
Minnesota 55402, are the independent auditors for the Fund.
CUSTODIAN
Bankers Trust Company, 280 Park Avenue, New York, New York 10017 acts
as custodian of the securities held by the Fund.
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<PAGE>
No dealer, sales representative or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus (and/or in the Statement of Additional Information referred to on the
cover page of this Prospectus), and if given or made, such information or
representations must not be relied upon as having been authorized by the Fund or
Ascend Financial. This Prospectus does not constitute an offer or solicitation
by anyone in any state in which such offer or solicitation is not authorized,
or in which the person making such offer or solicitation is not qualified to do
so, or to any person to whom it is unlawful to make such offer or solicitation.
INVESTMENT ADVISER INDEPENDENT AUDITORS
ADVANTUS CAPITAL MANAGEMENT, KPMG PEAT MARWICK LLP
INC.
400 Robert Street North
St. Paul, Minnesota 55101
UNDERWRITER CUSTODIAN
ASCEND FINANCIAL SERVICES, INC. BANKERS TRUST COMPANY
P.O. Box 64809 280 Park Avenue
St. Paul, Minnesota 55101-0809 New York, New York 10017
(612) 665-4833
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT
THE MINNESOTA MUTUAL LIFE
INSURANCE COMPANY
P.O. Box 64132
St. Paul, Minnesota 55164-0132
(800) 665-6005
GENERAL COUNSEL
DORSEY & WHITNEY LLP
Prospectus dated January 30, 1998
<PAGE>
PART B. INFORMATION REQUIRED IN A STATEMENT
OF ADDITIONAL INFORMATION
<PAGE>
MIMLIC CASH FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
January 30, 1998
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the Prospectus dated January
30, 1998 and should be read in conjunction therewith. A copy of the
Prospectus may be obtained from Ascend Financial Services, Inc., 400 Robert
Street North, St. Paul, Minnesota 55101.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Investment Objectives and Policies . . . . . . . . . . . . . . . 1
Investment Restrictions. . . . . . . . . . . . . . . . . . . . . 2
Commercial Paper and Bond Ratings. . . . . . . . . . . . . . . . 3
A-1 and P-1 Commercial Paper Ratings. . . . . . . . . . . . 4
Bond Ratings. . . . . . . . . . . . . . . . . . . . . . . . 4
Directors and Executive Officers . . . . . . . . . . . . . . . . 5
Director Liability . . . . . . . . . . . . . . . . . . . . . . . 6
Investment Advisory and Other Services . . . . . . . . . . . . . 7
General . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Control and Management of Advantus Capital and
Ascend Financial. . . . . . . . . . . . . . . . . . . . . 7
Investment Advisory Agreement . . . . . . . . . . . . . . . 8
Distribution Agreement. . . . . . . . . . . . . . . . . . . 9
Amortized Cost Method of Portfolio Valuation . . . . . . . . . . 9
Portfolio Transactions and Allocation of Brokerage . . . . . . . 10
Calculation of Performance Data. . . . . . . . . . . . . . . . . 12
Capital Stock and Ownership of Shares. . . . . . . . . . . . . . 13
Shareholder Services . . . . . . . . . . . . . . . . . . . . . . 14
Open Accounts . . . . . . . . . . . . . . . . . . . . . . . 14
Redemptions. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Distributions and Tax Status . . . . . . . . . . . . . . . . . . 15
Financial Statements . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of MIMLIC Cash Fund, Inc. (the
"Fund") are summarized on the front page of the Prospectus and in the text of
the Prospectus following the caption "Investment Objectives and Policies." The
types of investments that the Fund will make are described in the Prospectus. A
more detailed description of certain types of obligations in which the Fund
invests is as follows:
CERTIFICATES OF DEPOSIT --are certificates issued against funds
deposited in a bank, are for a definite period of time, earn a specified rate of
return, and are normally negotiable.
BANKER'S ACCEPTANCES --are short-term credit instruments issued by
corporations to finance the import, export, transfer or storage of goods. They
are termed "accepted" when a bank guarantees their payment at maturity. These
instruments reflect the obligations of both the bank and drawer to pay the face
amount of the instrument at maturity.
COMMERCIAL PAPER --refers to promissory notes issued by corporations
to finance their short-term credit needs.
REPURCHASE AGREEMENTS --are agreements by which the Fund purchases a
security and obtains a simultaneous commitment from the seller to repurchase the
security at an agreed upon price and date. The Fund's custodian, or a duly
appointed subcustodian, will hold the securities underlying any repurchase
agreement in a segregated account or such securities may be part of the Federal
Reserve Book Entry System. The market value of the collateral underlying the
repurchase agreement will be determined on each business day. If at any time
the market value of the collateral falls below the repurchase price of the
repurchase agreement (including any accrued interest), the Fund will promptly
receive additional collateral, so that the total collateral is in an amount at
least equal to the repurchase price plus accrued interest.
CORPORATE OBLIGATIONS --include bonds and notes issued by corporations
in order to finance longer term credit needs.
The Fund, consistent with its investment objective, attempts to
maximize yield through portfolio trading. This may involve selling portfolio
instruments and purchasing different instruments to take advantage of
disparities of yields in different segments of the high grade money market or
among particular instruments within the same segment of the market. Since the
Fund's assets are invested in securities with short maturities and the Fund
manages its portfolio as described above, the Fund's portfolio of money market
instruments turns over several times a year. However, this does not generally
increase the Fund's costs, since brokerage commissions as such are not usually
paid in connection with the purchase or sale of the instruments in which the
Fund invests. Rather, the Fund pays a spread between the bid and asked prices.
See "Portfolio Transactions and Allocation of Brokerage."
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<PAGE>
INVESTMENT RESTRICTIONS
Except as otherwise noted, the investment restrictions set forth
below, certain of which are described in the Prospectus, are "fundamental"
policies of the Fund and, accordingly, may not be changed without the approval
of the holders of a majority of the outstanding shares of the Fund. A
"majority" of the outstanding shares of the Fund means the lesser of (i) 67% of
the shares of the Fund represented at the meeting at which more than 50% of the
outstanding shares are represented or (ii) more than 50% of the outstanding
shares. An investment restriction which is not fundamental may be changed by
vote of the Board of Directors without further shareholder approval. Except as
otherwise noted, each of the investment restrictions below is fundamental. The
Fund will not:
(1) Purchase any security (other than securities issued or guaranteed by
the United States Government, its agencies or instrumentalities) if,
as a result, more than 5% of the Fund's total assets would be invested
in securities of a single issuer;
(2) Purchase any security if, as a result, more than 25% of the Fund's
total assets would be invested in the securities of issuers conducting
their principal business activities in a single industry; provided
that (a) telephone, gas, and electric public utilities are each
regarded as separate industries and (b) United States banks, savings
and loan associations, savings banks and finance companies are each
regarded as separate industries for the purpose of this limitation.
There are no limitations with respect to the concentration of
investments in securities issued or guaranteed by the United States
Government, its agencies or instrumentalities, or certificates of
deposit and bankers acceptances of United States banks or their
domestic branches;
(3) Purchase securities on margin (but it may obtain such short-term
credits as may be necessary for the clearance of purchases and sales
of securities); or make short sales except short sales against the box
where it owns the securities sold or, by virtue of ownership of other
securities, it has the right to obtain, without payment of further
consideration, securities equivalent in kind and amount to those sold,
and only to the extent that the Fund's short positions will not at the
time of any short sale aggregate in total sale prices more than 10% of
its total assets;
(4) Acquire more than 10% of any class of securities of an issuer (taking
all preferred stock issues of an issuer as a single class and all debt
issues of an issuer as a single class) or acquire more than 10% of the
outstanding voting securities of an issuer;
(5) Borrow money or enter into reverse repurchase agreements in excess of
5% of its net assets and, with respect to borrowing money, only from
banks and only as a temporary measure for extraordinary or emergency
purposes;
(6) Mortgage, pledge, hypothecate, or in any manner transfer, as security
for indebtedness, any assets of the Fund;
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<PAGE>
(7) Invest more than 5% of its total assets in securities of businesses
(including predecessors) less than three years old;
(8) Purchase or retain securities of any company if officers and directors
of the Fund or of its investment adviser who individually own more
than 1/2 of 1% of the shares or securities of that company, together
own more than 5%;
(9) Make loans, except by purchase of bonds, debentures, commercial paper,
corporate notes, repurchase agreements and similar evidences of
indebtedness, which are a part of an issue to the public or to
financial institutions;
(10) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts, real estate or interests in real estate which are not
readily marketable, commodities or commodity contracts. (This does
not prevent the Fund from purchasing securities of companies investing
in the foregoing.);
(11) Act as an underwriter of securities, except to the extent the Fund may
be deemed to be an underwriter in connection with the disposition of
portfolio securities;
(12) Make investments for the purpose of exercising control or management;
(13) Participate on a joint or joint and several basis in any trading
account in securities;
(14) Write or purchase put or call options, or combinations thereof;
(15) Enter into repurchase agreements maturing in more than seven days,
purchase certificates of deposit of banks and savings and loan
associations which at the date of the investment have total assets (as
of the date of their most recent annual financial statements) of less
than $2 billion, purchase variable amount master demand notes, or
invest in any other illiquid assets, if such investments taken
together exceed 10% of the Fund's net assets (This restriction is non-
fundamental.); or
(16) Invest in the securities of other investment companies, with an
aggregate value in excess of 5% of the Fund's total assets, except
securities acquired as a result of a merger, consolidation or
acquisition of assets.
Any investment policy or restriction which involves a maximum
percentage of securities or assets shall not be considered to be violated unless
an excess over the percentage occurs immediately after an acquisition of
securities or utilization of assets and results therefrom.
COMMERCIAL PAPER AND BOND RATINGS
As is described in the Prospectus, the Fund's investments in high
quality commercial paper and corporate obligations are limited by reference to
the applicable Standard & Poor's and Moody's ratings. These ratings are
described as follows:
-3-
<PAGE>
A-1 AND P-1 COMMERCIAL PAPER RATINGS. The rating A-1 is the highest
rating assigned by Standard & Poor's Corporation ("S&P") to commercial paper
which is considered by S&P to have the following characteristics:
Liquidity ratios of the issuer are adequate to meet cash
redemptions. Long-term senior debt is rated "A" or better. The
issuer has access to at least two additional channels of borrowing.
Basic earnings and cash flow have an upward trend with allowance made
for unusual circumstances. Typically, the issuer's industry is well
established and the issuer has a strong position within the industry.
The reliability and quality of management are unquestioned.
The rating P-1 is the highest commercial paper rating assigned by
Moody's Investors Service, Inc. ("Moody's"). Among the factors
considered by Moody's in assigning the ratings are the following:
(1) evaluation of the management of the issuer, (2) economic
evaluation of the issuer's industry or industries and an
appraisal of speculative-type risks which may be inherent in
certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity;
(5) amount and quality of long-term debt; (6) trend of earnings
over a period of ten years; (7) financial strength of a parent
company and the relationships which exist with the issuer; and
(8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and
preparations to meet such obligations.
BOND RATINGS. Moody's describes its three highest ratings for
corporate bonds as follows:
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." 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.
Bonds which are rated 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.
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 some time in the future.
Standard & Poor's describes its three highest ratings for corporate
bonds as follows:
-4-
<PAGE>
AAA. Debt rated "AAA" has the highest rating assigned by Standard &
Poor's. 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 higher rated categories.
DIRECTORS AND EXECUTIVE OFFICERS
The names, addresses, principal occupations, and other affiliations of
directors and executive officers of the Fund are given below:
<TABLE>
<CAPTION>
Position with Principal Occupation and other
Name and Address the Fund Affiliations (past 5 years)
- ---------------- ------------- ------------------------------
<S> <C> <C>
Paul H. Gooding* President Vice President and Treasurer of
Advantus Capital and Director Minnesota Mutual; President and
Management, Inc. Director of Advantus Capital;
400 Robert Street North President, Treasurer and Director
St. Paul, Minnesota 55101 of MIMLIC Management
Frederick P. Feuerherm* Vice President, Second Vice President of Minnesota
The Minnesota Mutual Treasurer and Mutual; Vice President and Assistant
Life Insurance Company Director Secretary of MIMLIC Management
400 Robert Street North
St. Paul, Minnesota 55101
Ralph D. Ebbott Director Retired, Vice President and Treasurer
409 Birchwood Avenue of Minnesota Mining and Manufacturing
White Bear Lake, Company (tape, adhesive, photographic,
Minnesota 55110 and electrical products) through June
1989
Charles E. Arner Director Retired, Vice Chairman of The First
E-1218 First National National Bank of Saint Paul from
Bank Building November 1983 through June 1984;
332 Minnesota Street Chairman and Chief Executive Officer
St. Paul, Minnesota 55101 of The First National Bank of Saint Paul
from October 1980 through November
1983
-5-
<PAGE>
Ellen S. Berscheid Director Regents' Professor of Psychology at the
University of Minnesota University of Minnesota
N309 Elliott Hall
Minneapolis, Minnesota 55455
Michael J. Radmer Secretary Partner with the law firm of
Dorsey & Whitney LLP Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
</TABLE>
- --------------------------
*Denotes directors of the Fund who are "interested persons" (as defined
under the Investment Company Act of 1940) of the Fund.
- --------------------------
Legal fees and expenses are paid by Advantus Capital to the law
firm of which Michael J. Radmer is a partner. As of September 30, 1997, the
officers and directors of the Fund owned no shares of the Fund. The Fund
does not pay any compensation to any of its officers or directors. Advantus
Capital, however, pays certain fees to Directors who are not affiliated with
Advantus Capital or MIMLIC Management. Each Director of the Fund who is not
affiliated with Advantus Capital or MIMLIC Management is also a director of
the other 11 investment companies of which Advantus Capital is the investment
adviser (12 investment companies in total - the "Fund Complex"). As of the
date hereof, such Directors receive compensation in connection with all such
investment companies which, in the aggregate, is equal to $8,000 per year and
$2,000 per meeting attended (and reimbursement of travel expenses to attend
directors' meetings). The portion of such compensation borne by any
investment company is a PRO RATA portion based on the ratio that such
investment company's total net assets bears to the total net assets of the
Fund Complex. Advantus Capital bears the Fund's PRO RATA portion. During
the fiscal year ended September 30, 1997, each Director not affiliated with
Advantus Capital or MIMLIC Management was compensated by Advantus Capital in
accordance with the following table:
<TABLE>
<CAPTION>
Pension or
Retirement Total Compensation
Aggregate Benefits Estimated from Advantus
Compensation Accrued Annual Capital and
Name of from Advantus as Part of Benefits Upon Fund Complex
Director Capital Fund Expenses Retirement Paid to Directors
- -------- ------- ------------- ---------- -----------------
<S> <C> <C> <C> <C>
Charles E. Arner $68.22 N/A N/A $13,000
Ellen S. Berscheid $68.22 N/A N/A $13,000
Ralph D. Ebbott $68.22 N/A N/A $13,000
</TABLE>
DIRECTOR LIABILITY
Under Minnesota law, the Board of Directors of the Fund owes certain
fiduciary duties to the Fund and to its shareholders. Minnesota law provides
that a director "shall discharge the duties of the position of director in good
faith, in a manner the director reasonably believes to be in the best interest
of the corporation, and with the care an ordinarily prudent person in a like
position would exercise under similar circumstances." Fiduciary duties of a
director of a Minnesota corporation include, therefore, both a duty of "loyalty"
(to act in good faith and act in a manner reasonably believed to be in the best
interests of the corporation) and a duty of "care"
-6-
<PAGE>
(to act with the care an ordinarily prudent person in a like position would
exercise under similar circumstances). Minnesota law also authorizes
corporations to eliminate or limit the personal liability of a director to the
corporation or its shareholders for monetary damages for breach of the fiduciary
duty of "care." Minnesota law does not, however, permit a corporation to
eliminate or limit the liability of a director (i) for any breach of the
directors' duty of "loyalty" to the corporation or its shareholders, (ii) for
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) for authorizing a dividend, stock repurchase or
redemption or other distribution in violation of Minnesota law or for violation
of certain provisions of Minnesota securities laws, or (iv) for any transaction
from which the director derived an improper personal benefit. The Articles of
Incorporation of the Fund limit the liability of directors to the fullest extent
permitted by Minnesota statutes, except to the extent that such liability cannot
be limited as provided in the Investment Company Act of 1940 (which Act
prohibits any provisions which purport to limit the liability of directors
arising from such directors' willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of their role as
directors).
Minnesota law does not eliminate the duty of "care" imposed upon a
director. It only authorizes a corporation to eliminate monetary liability for
violations of that duty. Minnesota law, further, does not permit elimination or
limitation of liability of "officers" to the corporation for breach of their
duties as officers (including the liability of directors who serve as officers
for breach of their duties as officers). Minnesota law does not permit
elimination or limitation of the availability of equitable relief, such as
injunctive or rescissionary relief. Further, Minnesota law does not permit
elimination or limitation of a director's liability under the Securities Act of
1933 or the Securities Exchange Act of 1934, and it is uncertain whether and to
what extent the elimination of monetary liability would extend to violations of
duties imposed on directors by the Investment Company Act of 1940 and the rules
and regulations adopted under such Act.
INVESTMENT ADVISORY AND OTHER SERVICES
GENERAL
- -------
Advantus Capital Management, Inc. ("Advantus Capital") has been the
investment adviser and manager of the Fund since March 1, 1995. Prior to
that date the Fund's investment adviser was MIMLIC Asset Management Company
("MIMLIC Management"). Advantus Capital is a wholly-owned subsidiary of
MIMLIC Management. The same portfolio manager and other personnel who
previously provided investment advisory services to the Fund through MIMLIC
Management continue to provide the same services through Advantus Capital.
Ascend Financial acts as the Fund's underwriter. Both Advantus Capital and
Ascend Financial act as such pursuant to written agreements that will be
periodically considered for approval by the directors or shareholders of the
Fund. The address of both is 400 Robert Street North, St. Paul, Minnesota
55101.
CONTROL AND MANAGEMENT OF ADVANTUS CAPITAL AND ASCEND FINANCIAL
- ---------------------------------------------------------------
-7-
<PAGE>
Advantus Capital was incorporated in Minnesota in June, 1994, and is a
wholly-owned subsidiary of MIMLIC Management. MIMLIC Management is a
subsidiary of The Minnesota Mutual Life Insurance Company ("Minnesota
Mutual"), which was organized in 1880, and has assets of more than $13
billion. Ascend Financial is a subsidiary of MIMLIC Management. Paul H.
Gooding, President and a director of the Fund, is President and a director of
Advantus Capital and President, Treasurer and a director of MIMLIC
Management. Frederick P. Feuerherm, Vice President, Treasurer and a director
of the Fund, is a Vice President and Assistant Secretary of MIMLIC
Management. James P. Tatera, Senior Vice President and Director of Advantus
Capital, is also Vice President of MIMLIC Management.
INVESTMENT ADVISORY AGREEMENT
Advantus Capital acts as investment adviser and manager of the Fund
under an Investment Advisory Agreement (the "Advisory Agreement") dated March 1,
1995, and which was approved by shareholders on February 14, 1995. The Advisory
Agreement was last approved by the Board of Directors (including a majority of
the directors who are not parties to the contract, or interested persons of any
such party) on January 14, 1998. The Advisory Agreement will terminate
automatically in the event of its assignment. In addition, the Advisory
Agreement is terminable at any time, without penalty, by the Board of Directors
of the Fund or by vote of a majority of the Fund's outstanding voting securities
on not more than 60 days' written notice to Advantus Capital, and by Advantus
Capital on 60 days' written notice to the Fund. Unless sooner terminated, the
Advisory Agreement shall continue in effect for more than two years after its
execution only so long as such continuance is specifically approved at least
annually by either the Board of Directors of the Fund or by a vote of a majority
of the outstanding voting securities, provided that in either event such
continuance is also approved by the vote of a majority of the directors who are
not parties to the Advisory Agreement, or interested persons of such parties,
cast in person at a meeting called for the purpose of voting on such approval.
Shares of the Fund will be sold only to the Advisory Clients and may
be purchased only with funds managed by Advantus Capital, MIMLIC Management or
other affiliated investment advisers for the Advisory Clients. For that reason,
the Fund does not pay an advisory fee to Advantus Capital under the Advisory
Agreement. Advantus Capital, under the Advisory Agreement with the Fund, acts as
investment adviser and manager for the Fund, and furnishes the Fund office space
and all necessary office facilities, equipment and personnel for servicing the
investments of the Fund. In addition, Advantus Capital pays all expenses of the
Fund, except custodian fees, brokerage commissions (if any), and those expenses
expressly assumed by the Fund's underwriter, including the salaries and fees of
all officers and directors of the Fund, auditing and accounting fees, legal
fees, and the Fund's transfer agent, dividend disbursing agent and redemption
agent expenses. Minnesota Mutual acts as the Fund's transfer agent, dividend
disbursing agent and redemption agent.
Ascend Financial, the Fund's underwriter, bears all promotional
expenses in connection with the distribution of the Fund's shares, including
paying for prospectuses and statements of additional information for new
shareholders, and shareholder reports for new shareholders, and the costs of
sales literature.
-8-
<PAGE>
DISTRIBUTION AGREEMENT
- ----------------------
On January 14, 1998, the Board of Directors (including a majority
of the directors who are not parties to the contract, or interested persons
of any such party) last approved the Distribution Agreement with Ascend
Financial (the "Distribution Agreement") dated February 25, 1987. The
Distribution Agreement may be terminated by the Fund or Ascend Financial at
any time by the giving of 60 days' written notice, and terminates
automatically in the event of its assignment. Unless sooner terminated, the
Distribution Agreement shall continue in effect for more than two years after
its execution only so long as such continuance is specifically approved at
least annually by either the Board of Directors of the Fund or by a vote of a
majority of the outstanding voting securities, provided that in either event
such continuance is also approved by the vote of a majority of the directors
who are not parties to the Distribution Agreement, or interested persons of
such parties, cast in person at a meeting called for the purpose of voting on
such approval.
The Distribution Agreement requires Ascend Financial to pay all
advertising and promotional expenses in connection with the distribution of the
Fund's shares including paying for Prospectuses and Statements of Additional
Information (if any) for new shareholders, shareholder reports for new
shareholders, and the costs of sales literature.
In the Distribution Agreement, Ascend Financial undertakes to
indemnify the Fund against all costs of litigation and other legal
proceedings, and against any liability incurred by or imposed upon the Fund
in any way arising out of or in connection with the sale or distribution of
the Fund's shares, except to the extent that such liability is the result of
information which was obtainable by Ascend Financial only from persons
affiliated with the Fund but not with Ascend Financial.
AMORTIZED COST METHOD OF PORTFOLIO VALUATION
The Fund values its portfolio securities at amortized cost in
accordance with Rule 2a-7 under the Investment Company Act of 1940, as amended.
This method 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 fluctuations in interest rates on the market value of the instrument
and regardless of any unrealized capital gains or losses. While this method
provides certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold the instrument. During periods of declining interest rates,
the daily yield on shares of the Fund computed by dividing the annualized daily
income of the Fund by the net asset value computed as described above may tend
to be higher than a like computation made by the Fund with identical investments
utilizing a method of valuation based upon market prices and estimates of market
prices for all of its securities.
Pursuant to Rule 2a-7, the Board of Directors of the Fund has
determined, in good faith based upon a full consideration of all material
factors, that it is in the best interests of the Fund and its shareholders to
maintain a stable net asset value per share by virtue of the amortized
-9-
<PAGE>
cost method of valuation. The Fund will continue to use this method only so
long as the Board of Directors believes that it fairly reflects the market-based
net asset value per share. In accordance with Rule 2a-7, the Board of Directors
has undertaken, as a particular responsibility within the overall duty of care
owed to the Fund's shareholders, to establish procedures reasonably designed,
taking into account current market conditions and the Fund's investment
objectives, to stabilize the Fund's net asset value per share at a single value.
These procedures include the periodic determination of any deviation of current
net asset value per share calculated using available market quotations from the
Fund's amortized cost price per share, the periodic review by the Board of the
amount of any such deviation and the method used to calculate any such
deviation, the maintenance of records of such determinations and the Board's
review thereof, the prompt consideration by the Board if any such deviation
exceeds 1/2 of 1%, and the taking of such remedial action by the Board as it
deems appropriate where it believes the extent of any such deviation may result
in material dilution or other unfair results to investors or existing
shareholders. Such remedial action may include redemptions in kind, selling
portfolio instruments prior to realizing capital gains or losses, shortening the
average portfolio maturity, withholding dividends or utilizing a net asset value
per share as determined by using available market quotations.
The Fund will, in further compliance with Rule 2a-7, maintain a
dollar-weighted average portfolio maturity not exceeding 90 days and will limit
its portfolio investments to those United States dollar-denominated instruments
which the Board determines present minimal credit risks and which are eligible
securities. The Fund will limit its investments in the securities of any one
issuer to no more than 5% of Fund assets and it will limit investment in
securities of less than the highest rated categories to 5% of Fund assets.
Investment in the securities of any issuer of less than the highest rated
categories will be limited to the greater of 1% of Fund assets or one million
dollars. In addition, the Fund will reassess promptly any security which is in
default or downgraded from its rating category to determine whether that
security then presents minimal credit risks and whether continuing to hold the
securities is in the best interests of the Fund. In addition, the Fund will
record, maintain, and preserve a written copy of the above-described procedures
and a written record of the Board's considerations and actions taken in
connection with the discharge of its above-described responsibilities.
PORTFOLIO TRANSACTIONS AND ALLOCATION OF BROKERAGE
Most transactions in portfolio securities are purchases from
issuers or dealers in money market instruments acting as principal. There
usually are no brokerage commissions paid by the Fund for such purchases
since securities are purchased on a net price basis. During the fiscal years
ended September 30, 1997, 1996 and 1995, the Fund paid no brokerage
commissions. Trading does, however, involve transaction costs. Transactions
with dealers serving as primary market makers reflect the spread between the
bid and asked prices of securities. Purchases of underwritten issues may be
made which reflect a fee paid to the underwriter.
Decisions with respect to the placement of the Fund's portfolio
transactions are made by Advantus Capital. The primary criteria in making these
decisions are efficiency in the execution of orders and obtaining the most
favorable net prices for the Fund. Most Fund
-10-
<PAGE>
transactions are with the issuer or with major dealers acting for their own
account and not as brokers. When consistent with these objectives, business may
be placed with broker-dealers who furnish investment research services to
Advantus Capital. Such research services include advice, both directly and in
writing, as to the value of securities, the advisability of investing in,
purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities, as well as analyses and reports concerning
issues, industries, securities, economic factors and trends, portfolio strategy,
and the performance of accounts. By allocating brokerage business in order to
obtain research services for Advantus Capital, the Fund enables Advantus Capital
to supplement its own investment research activities and allows Advantus Capital
to obtain the views and information of individuals and research staffs of many
different securities research firms prior to making investment decisions for the
Fund. To the extent such commissions are directed to these other brokers who
furnish research services to Advantus Capital, Advantus Capital receives a
benefit, not capable of evaluation in dollar amounts, without providing any
direct monetary benefit to the Fund from these commissions.
There is no formula for the allocation by Advantus Capital of the
Fund's brokerage business to any broker-dealers for brokerage and research
services. While it is not expected that the Fund will pay brokerage
commissions, if it does, Advantus Capital will authorize the Fund to pay an
amount of commission for effecting a securities transaction in excess of the
amount of commission another broker would have charged only if Advantus Capital
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker viewed in terms of either that particular transaction or Advantus
Capital's overall responsibilities with respect to the accounts as to which it
exercises investment discretion. During the fiscal year ended September 30,
1997, the Fund paid no brokerage commissions and directed no transactions to
brokers because of research services they provided.
No brokerage is allocated for the sale of Fund shares. Advantus
Capital believes that most research services obtained by it generally benefit
one or more of the investment companies which it manages and also benefits
accounts which it manages. Normally research services obtained through managed
funds and managed accounts investing in common stocks would primarily benefit
such funds and accounts; similarly, services obtained from transactions in fixed
income securities would be of greater benefit to the managed funds and managed
accounts investing in debt securities.
The same security may be suitable for the Fund and the other funds or
accounts managed by Advantus Capital or its affiliates. If and when two or more
funds or accounts simultaneously purchase or sell the same security, the
transactions will be allocated as to price and amount in accordance with
arrangements equitable to each fund or account. The simultaneous purchase or
sale of the same securities by the Fund and other funds or accounts may have a
detrimental effect on the Fund, as this may affect the price paid or received by
the Fund or the size of the position obtainable by the Fund.
The Fund will not execute portfolio transactions through any
affiliate, unless such transactions, including the frequency thereof, the
receipt of commissions payable in connection therewith and the selection of the
affiliated broker-dealer effecting such transactions are not unfair
-11-
<PAGE>
or unreasonable to the shareholders of the Fund. In the event any transactions
are executed on an agency basis, Advantus Capital will authorize the Fund to pay
an amount of commission for effecting a securities transaction in excess of the
amount of commission another broker-dealer would have charged only if Advantus
Capital determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or the
overall responsibilities of Advantus Capital with respect to the Fund as to
which it exercises investment discretion. If the Fund executes any transactions
on an agency basis, it will generally pay higher than the lowest commission
rates available.
In determining the commissions to be paid to an affiliated broker-
dealer, it is the policy of the Fund that such commissions will, in the judgment
of Advantus Capital, subject to review by the Fund's Board of Directors, be both
(a) at least as favorable as those which would be charged by other qualified
brokers in connection with comparable transactions involving similar securities
being purchased or sold on an exchange during a comparable period of time, and
(b) at least as favorable as commissions contemporaneously charged by such
affiliated broker-dealers on comparable transactions for their most favored
comparable unaffiliated customers. While the Fund does not deem it practicable
and in its best interest to solicit competitive bids for commission rates on
each transaction, consideration will regularly be given to posted commission
rates as well as to other information concerning the level of commissions
charged on comparable transactions by other qualified brokers. During the year
ended September 30, 1997, the Fund did not execute any portfolio transactions
with an affiliated broker-dealer.
Information regarding the acquisition by the Fund during the fiscal
year ended September 30, 1997, of securities of the Fund's regular brokers or
dealers, or the parents of those broker or dealers that derive more than 15
percent of their gross revenue from securities-related activities, is presented
below:
Approximate
Value of Securities Owned
Name of Issuer at End of Fiscal Year
-------------- -------------------------
Associates Corporation $890,092
Ford Motor Credit Company $796,232
General Electric Capital Corporation $792,542
CALCULATION OF PERFORMANCE DATA
The Fund may issue "current yield" and "effective yield" quotations.
"Current yields" are computed by determining the net change in the value of a
hypothetical account having a balance of one share at the beginning of a recent
seven calendar day period, and multiplying that change by 365/7. "Effective
yields" are computed by determining the net change in the value of a
hypothetical account having a balance of one share at the beginning of a recent
seven calendar day period, dividing that change by seven, adding one to the
quotient, raising the sum to the 365th power, and subtracting one from the
result. For purposes of the foregoing calculations, the value
-12-
<PAGE>
of the hypothetical account includes accrued interest income plus or minus
amortized purchase discount or premium less accrued expenses, but does not
include realized gains and losses or unrealized appreciation and depreciation.
The Fund will also quote the average dollar-weighted portfolio maturity for the
corresponding seven-day period.
Although there can be no assurance that the net asset value of the
Fund's shares will always be $1.00, Advantus Capital does not expect that the
net asset value of its shares will fluctuate since the Fund uses the amortized
cost method of valuation to maintain a stable $1.00 net asset value. See
"Amortized Cost Method of Portfolio Valuation." Principal is not, however,
insured. Yield is a function of portfolio quality and composition, maturity,
and operating expenses. Yield information is useful in reviewing the Fund's
performance, but it may not provide a basis for comparison with bank deposits or
other investments, which pay a fixed yield for a stated period of time, or other
investment instruments, which may use a different method of calculating yield.
For the seven calendar days ended September 30, 1997, the Fund's
annualized current yield was 4.70% and its annualized effective yield was 4.81%.
CAPITAL STOCK AND OWNERSHIP OF SHARES
The Fund's shares of common stock have a par value of $.01 per share,
and have equal rights to share in dividends and assets. The shares possess no
preemptive or conversion rights. Cumulative voting is not authorized. This
means that the holders of more than 50% of the shares voting for the election of
directors can elect 100% of the directors if they choose to do so, and in such
event the holders of the remaining shares will be unable to elect any directors.
The Fund has the following authorized capital and numbers of shares
outstanding:
Number of
authorized shares Par value Shares outstanding
of common stock per share at September 30, 1997
----------------- --------- ---------------------
1,000,000,000 $.01 14,268,271
As of September 30, 1997, no person held of record, to the knowledge
of the Fund, or owned more than 5% of the outstanding shares of the Fund, except
as set forth in the following table:
Number of Percent of
Name and Address of Shareholder Shares Class
- ------------------------------- --------- ----------
Minnesota Mutual and affiliates 11,592,163 81.2%
400 Robert Street North
St. Paul, Minnesota 55101
-13-
<PAGE>
SHAREHOLDER SERVICES
OPEN ACCOUNTS
A shareholder's investment is automatically credited to an open
account maintained for the shareholder by Minnesota Mutual. Stock certificates
are issued only upon written request to Minnesota Mutual but will not be issued
for fractional shares. Following each transaction in the account, a shareholder
will receive a confirmation statement disclosing the current balance of shares
owned and the details of recent transactions in the account. After the close of
each calendar year Minnesota Mutual sends to each shareholder a statement
providing federal tax information on dividends and distributions paid to the
shareholder during the year. This should be retained as a permanent record.
The open account system provides for full and fractional shares
expressed to four decimal places and, by making the issuance and delivery of
stock certificates unnecessary, eliminates problems of handling and safekeeping,
and the cost and inconvenience of replacing lost, stolen, mutilated or destroyed
certificates.
The costs of maintaining the open account system are paid by Advantus
Capital, and no direct charges are made to shareholders. Although the Fund has
no present intention of making such direct charges to shareholders, it reserves
the right to do so. Shareholders will receive prior notice before any such
changes are made.
REDEMPTIONS
The procedures for redemption of Fund shares are summarized in the
Prospectus in the text following the questions "How are Fund shares redeemed?"
The obligation of the Fund to redeem its shares when called upon to do
so by the shareholder is mandatory with the following exceptions.
The Fund will pay in cash all redemption requests by any shareholder
of record, limited in amount during any 90-day period to the lesser of $250,000
or 1% of the net asset value of the Fund at the beginning of such period. When
redemption requests exceed such amount, however, the Fund reserves the right to
make part or all of the payment in the form of securities or other assets of the
Fund. An example of when this might be done is in case of emergency, such as in
those situations enumerated in the following paragraph, or at any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. Any securities being so distributed would be valued in
the same manner as the portfolio of the Fund is valued. If the recipient sold
such securities, he or she probably would incur brokerage charges. The Fund has
filed with the Securities and Exchange Commission a notification of election
pursuant to Rule 18f-1 under the Investment Company Act of 1940 in order to make
such redemptions in kind.
Redemption of shares, or payment, may be suspended at times (a) when
the New York Stock Exchange is closed for other than customary weekend or
holiday closings, (b) when trading on said Exchange is restricted, (c) when an
emergency exists, as a result of which disposal by the
-14-
<PAGE>
Fund of securities owned by it is not reasonably practicable, or it is not
reasonably practicable for the Fund fairly to determine the value of its net
assets, or during any other period when the Securities and Exchange Commission,
by order, so permits; provided that applicable rules and regulations of the
Securities and Exchange Commission shall govern as to whether the conditions
prescribed in (b) or (c) exist.
DISTRIBUTIONS AND TAX STATUS
The tax status of the Fund and the distributions which it may make are
summarized in the text of the Prospectus following the caption "Taxes." During
the fiscal year ended September 30, 1997, the Fund fulfilled, and the Fund
intends to continue to fulfill, the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), as a regulated investment
company. If so qualified, the Fund will not be liable for federal income taxes
to the extent it distributes its taxable income to its shareholders.
The Fund is subject to a non-deductible excise tax equal to 4 percent
of the excess, if any, of the amount required to be distributed pursuant to the
Code for each calendar year over the amount actually distributed. In order to
avoid the imposition of this excise tax, the Fund generally must declare
dividends by the end of a calendar year representing 98 percent of the Fund's
ordinary income for the calendar year and 98 percent of its capital gain net
income (both long-term and short-term capital gains) for the twelve-month period
ending October 31 of the calendar year.
The foregoing relates only to federal taxation. Prospective
shareholders should consult their tax advisers as to the possible application of
state and local income tax laws to Fund distributions.
FINANCIAL STATEMENTS
The Fund's financial statements for the year ended September 30,
1997, including the financial highlights for each of the respective periods
presented, appearing in the Fund's Annual Report to shareholders, and the
report thereon of the Fund's independent auditors, KPMG Peat Marwick LLP,
also appearing therein, are incorporated by reference in this Statement of
Additional Information. The Fund's 1997 Annual Report to Shareholders is
enclosed with this Statement of Additional Information.
-15-
<PAGE>
PART C. OTHER INFORMATION
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements: The Registrant's financial statements for
the year ended September 30, 1997, including the financial highlights for each
of the respective periods presented, appearing in the Registrant's Annual Report
to Shareholders, and the report thereon of the Registrant's independent
auditors, KPMG Peat Marwick LLP, also appearing therein, are incorporated by
reference in the Statement of Additional Information included in Part B of this
Registration Statement. The following financial statements are included in such
Annual Report to Shareholders:
(1) Investments in Securities as of September 30, 1997.
(2) Statement of Assets and Liabilities as of September 30,
1997.
(3) Statement of Operations for the year ended September 30,
1997.
(4) Statement of Changes in Net Assets for the years ended
September 30, 1997 and September 30, 1996.
(5) Notes to Financial Statements, including Financial
Highlights for the periods presented ended September 30,
1997.
(6) Independent Auditors' Report.
(b) Exhibits:
(1) Articles of Incorporation of the Registrant(1)
(2) Revised Bylaws of the Registrant(1)
(4) Specimen common shares of the Registrant(1)
(5) Investment Advisory Agreement between the Registrant and
Advantus Capital Management, Inc.(1)
(6) Distribution Agreement between the Registrant and Ascend
Financial Services, Inc.(1)
(8) Custodian Agreement between the Registrant and Bankers Trust
Company(1)
(10) Opinion and Consent of Dorsey & Whitney LLP(1)
(11) Consent of KPMG Peat Marwick LLP
(13) Letter of Investment Intent regarding the Registrant's
initial capital(1)
(16) Calculation of Yield of the Registrant(1)
(17) Financial Data Schedule
(19) Power of Attorney to sign Registration Statement executed by
Directors of Registrant
__________________
<PAGE>
(1) Incorporated by reference to the Registrant's Registration
Statement on Form N-1A filed January 26, 1996.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Wholly-owned subsidiaries of The Minnesota Mutual Life Insurance Company:
MIMLIC Asset Management Company
The Ministers Life Insurance Company
MIMLIC Corporation
Northstar Life Insurance Company (New York)
Robert Street Energy, Inc.
HomePlus Insurance Company
Open-end registered investment company offering shares solely to separate
accounts of The Minnesota Mutual Life Insurance Company:
Advantus Series Fund, Inc.
Wholly-owned subsidiaries of MIMLIC Asset Management Company:
Ascend Financial Services, Inc.
Advantus Capital Management, Inc.
Wholly-owned subsidiaries of MIMLIC Corporation:
DataPlan Securities, Inc. (Ohio)
MIMLIC Imperial Corporation
MIMLIC Funding, Inc.
MIMLIC Venture Corporation
Personal Finance Company (Delaware)
Wedgewood Valley Golf, Inc.
Ministers Life Resources, Inc.
Enterprise Holding Corporation
HomePlus Insurance Agency, Inc.
MCM Funding 1997-1, Inc.
Wholly-owned subsidiaries of Enterprise Holding Corporation:
Oakleaf Service Corporation
Lafayette Litho, Inc.
Financial Ink Corporation
Concepts in Marketing Research Corporation
Concepts in Marketing Services Corporation
Wholly-owned subsidiary of Ascend Financial Services, Inc.:
MIMLIC Insurance Agency of Massachusetts, Inc. (Massachusetts)
Majority-owned subsidiaries of MIMLIC Imperial Corporation:
J. H. Shoemaker Advisory Corporation
Consolidated Capital Advisors, Inc.
<PAGE>
Majority-owned subsidiary of Ascend Financial Services, Inc.:
MIMLIC Insurance Agency of Ohio, Inc.
Fifty percent-owned subsidiary of MIMLIC Imperial Corporation:
C.R.I. Securities, Inc.
Majority-owned subsidiaries of The Minnesota Mutual Life Insurance Company:
MIMLIC Life Insurance Company (Arizona)
MIMLIC Cash Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Advantus Venture Fund, Inc.
Advantus Index 500 Fund, Inc.
Less than majority owned, but greater than 25% owned, subsidiaries of The
Minnesota Mutual Life Insurance Company:
Advantus Money Market Fund, Inc.
Less than 25% owned subsidiaries of The Minnesota Mutual Life Insurance Company:
Advantus Bond Fund, Inc.
Advantus Horizon Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Unless indicated otherwise parenthetically, each of the above
corporations is a Minnesota corporation.
<PAGE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of November 30, 1997, a date within 90 days of the date of filing of
this amendment to the Registration Statement:
Title of Class Number of Record Holders
-------------- ------------------------
Common Shares 13
ITEM 27. INDEMNIFICATION
The Articles of Incorporation and Bylaws of the Registrant provide that the
Registrant shall indemnify such persons, for such expenses and liabilities, in
such manner, under such circumstances, to the full extent permitted by Section
302A.521, Minnesota Statutes, as now enacted or hereafter amended, provided that
no such indemnification may be made if it would be in violation of Section 17(h)
of the Investment Company Act of 1940, as now enacted or hereafter amended.
Section 302A.521 of the Minnesota Statutes, as now enacted, provides that a
corporation shall indemnify a person made or threatened to be made a party to a
proceeding against judgments, penalties, fines, settlements and reasonable
expenses, including attorneys' fees and disbursements, incurred by the person in
connection with the proceeding, if, with respect to the acts or omissions of the
person complained of in the proceeding, the person has not been indemnified by
another organization for the same judgments, penalties, fines, settlements and
reasonable expenses incurred by the person in connection with the proceeding
with respect to the same acts or omissions; acted in good faith; received no
improper personal benefit and the Minnesota Statute dealing with directors'
conflicts of interest, if applicable, has been satisfied; in the case of a
criminal proceeding, had no reasonable cause to believe the conduct was unlawful
and reasonably believed that the conduct was in the best interests of the
corporation or, in certain circumstances, reasonably believed that the conduct
was not opposed to the best interests of the corporation.
Section 17(h) of the Investment Company Act of 1940 provides that neither
the charter, certificate of incorporation, articles of association, indenture
of trust, nor the by-laws of any registered investment company, nor any other
instrument pursuant to which such company is organized or administered, shall
contain any
<PAGE>
provisions which protects or purports to protect any director or officer of such
company against any liability to the company or to its security holders to which
he would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of duties involved in the conduct of his
office. The staff of the Securities and Exchange Commission has stated that it
is of the view that an indemnification provision does not violate Section 17(h)
if it precludes indemnification for any liability arising by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of duties
("Disabling conduct") and sets forth reasonable and fair means for determining
whether indemnification shall be made. In the staff's view, "reasonable and
fair means" would include (1) a final decision on the merits by a court or other
body before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct or, (2) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the indemnitee was not liable by reason of disabling conduct, by
(a) the vote of a majority of a quorum of directors who are neither "interested
persons" of the company as defined in Section 2(a)(19) of the Investment Company
Act of 1940 nor parties to the proceeding ("disinterested, non-party directors")
or (b) an independent legal counsel in a written opinion. The dismissal of
either a court action or administrative proceeding against an indemnitee for
insufficiency of evidence of any disabling conduct with which he has been
charged would, in the staff's view, provide reasonable assurance that he was not
liable by reason of disabling conduct. The staff also believes that a
determination by the vote of a majority of a quorum of disinterested, non-party
directors would provide reasonable assurance that the indemnitee was not liable
by reason of disabling conduct.
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 Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted 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 ADVISER
Directors and Officers Office with
of Investment Adviser Investment Adviser Other Business Connections
Paul H. Gooding President and President, Treasurer and
Director Director, MIMLIC Asset
Management Company; President,
Secretary and Director, MIMLIC
Corporation; Director, MIMLIC
Imperial Corporation;
Director, MIMLIC Venture
Corporation;
<PAGE>
Vice President and Director,
MIMLIC Funding, Inc.; Vice
President and Director, Robert
Street Energy, Inc.; Chairman
of the Board and Director,
Personal Finance Company; Vice
President and Treasurer, The
Minnesota Mutual Life
Insurance Company; President,
MCM Funding 1997-1, Inc.
James P. Tatera Senior Vice President, Vice President and Equity
Treasurer and Director Portfolio Manager, MIMLIC
Asset Management Company;
Vice President, MIMLIC
Funding, Inc.; Second Vice
President, The Minnesota
Mutual Life Insurance Company;
Vice President and Assistant
Secretary, MCM Funding
1997-1, Inc.
Richard W. Worthing Vice President Vice President and Head of
Equities, MIMLIC Asset
Management Company; Vice
President, MCM Funding
1997-1, Inc.
Thomas A. Gunderson Vice President Investment Officer, MIMLIC
Asset Management Company
Kent R. Weber Vice President Investment Officer, MIMLIC
Asset Management Company
Wayne R. Schmidt Vice President Secretary and Treasurer,
MIMLIC Funding, Inc.;
Treasurer and Assistant
Secretary, Robert Street
Energy, Inc.; Vice President
and Secretary, MIMLIC Imperial
Corporation; Investment
Officer, MIMLIC Asset
Management Company;
Assistant Secretary, MCM
Funding 1997-1, Inc.
Matthew D. Finn Vice President Investment Officer, MIMLIC
Asset Management Company
Jeffrey R. Erickson Vice President Investment Officer, MIMLIC
Asset Management Company
Kevin J. Hiniker Secretary Associate General Counsel,
MIMLIC Asset Management
Company; Assistant Secretary,
Robert Street Energy, Inc.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Ascend Financial currently acts as a principal underwriter for the
following investment companies:
Advantus Horizon Fund, Inc.
Advantus Spectrum Fund, Inc.
Advantus Mortgage Securities Fund, Inc.
Advantus Money Market Fund, Inc.
Advantus Bond Fund, Inc.
Advantus Cornerstone Fund, Inc.
Advantus Enterprise Fund, Inc.
Advantus International Balanced Fund, Inc.
Advantus Venture Fund, Inc.
Advantus Index 500 Fund, Inc.
MIMLIC Cash Fund, Inc.
Minnesota Mutual Variable Fund D
Minnesota Mutual Variable Annuity Account
Minnesota Mutual Variable Life Account
Minnesota Mutual Group Variable Annuity Account
Minnesota Mutual Variable Universal Life Account
<PAGE>
(b) The name and principal business address, positions and offices
with Ascend Financial, and positions and offices with the Registrant of each
director and officer of Ascend Financial is as follows:
Positions and Positions and
Name and Principal Offices Offices
Business Address with Underwriter with Registrant
- ------------------ ---------------- ---------------
Robert E. Hunstad Director None
The Minnesota Mutual
Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
George I. Connolly President, Chief None
Ascend Financial Executive Officer and
Services, Inc. Director
400 Robert Street North
St. Paul, Minnesota 55101
Margaret Milosevich Vice President, Chief None
Ascend Financial Operations Officer and
Services, Inc. Treasurer
400 Robert Street North
St. Paul, Minnesota 55101
D.Ann Degenshein Vice President, Compliance None
Ascend Financial
Services, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Dennis E. Prohofsky Secretary None
The Minnesota Mutual
Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
Thomas L. Clark Assistant Secretary None
Ascend Financial and Assistant Treasurer
Services, Inc.
400 Robert Street North
St. Paul, Minnesota 55101
Margaret A. Berg Assistant Secretary None
The Minnesota Mutual
Life Insurance Company
400 Robert Street North
St. Paul, Minnesota 55101
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The physical possession of the accounts, books and other documents
required to be maintained by Section 3(a) of the Investment Company Act of 1940
and Rules 31a-1 to 31a-3 promulgated thereunder is maintained by Minnesota
Mutual, 400 Robert Street North, St. Paul, Minnesota 55101; except that the
physical possession of certain accounts, books and other documents related to
the custody of the Registrant's securities is maintained by Bankers Trust
Company, 280 Park Avenue, New York, NY 10017.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-
Effective Amendment to its Registration Statement to be signed on its behalf by
the undersigned, thereto duly authorized, in the City of St. Paul and the State
of Minnesota on the 14th day of January, 1998.
MIMLIC CASH FUND, INC.
Registrant
By /s/ Paul H. Gooding
-----------------------------------
Paul H. Gooding, President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by the
following persons in the capacities and on the date indicated.
/s/ Paul H. Gooding President (principal
- ----------------------------- executive officer) January 14, 1998
Paul H. Gooding and Director
/s/ Frederick P. Feuerherm Director and Treasurer
- ------------------------------ (principal financial) January 14, 1998
Frederick P. Feuerherm and accounting officer)
RALPH D. EBBOTT* Director)
- ------------------------------ )
Ralph D. Ebbott ) By /s/ Paul H. Gooding
) ----------------------------
) Paul H. Gooding
) Attorney-in-Fact
CHARLES E. ARNER* Director)
- ------------------------------ )
Charles E. Arner ) Dated: January 14, 1998
)
)
Ellen S. Berscheid* Director)
- ------------------------------ )
Ellen S. Berscheid )
- ---------------
*Registrant's director executing power of attorney dated July 31, 1996, a copy
of which is filed herewith.
<PAGE>
MIMLIC CASH FUND, INC.
EXHIBITS
<PAGE>
Exhibit Index
Exhibit Number and Description
- ------------------------------
1 Articles of Incorporation of the Registrant(1)
2 Revised Bylaws of the Registrant(1)
4 Specimen common shares of the Registrant(1)
5 Investment Advisory Agreement between the Registrant and Advantus Capital
Management, Inc. (1)
6 Distribution Agreement between the Registrant and Ascend Financial
Services, Inc.(1)
8 Custodian Agreement between the Registrant and Bankers Trust Company(1)
10 Opinion and Consent of Dorsey & Whitney LLP(1)
11 Consent of KPMG Peat Marwick LLP
13 Letter of Investment Intent(1)
16 Calculation of Yield of the Registrant(1)
17 Financial Data Schedule
19 Power of Attorney to sign Registration Statement executed by Directors of
Registrant
- -------------------
(1) Incorporated by reference to the Registrant's Registration Statement on
Form N-1A filed January 26, 1996.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM
N-SAR AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM N-SAR.
</LEGEND>
<RESTATED>
<CIK> 0000810899
<NAME> MIMLIC CASH FUND, INC.
<MULTIPLIER> 1000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 21464
<INVESTMENTS-AT-VALUE> 21464
<RECEIVABLES> 62
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21527
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 7259
<TOTAL-LIABILITIES> 7259
<SENIOR-EQUITY> 143
<PAID-IN-CAPITAL-COMMON> 14126
<SHARES-COMMON-STOCK> 14268
<SHARES-COMMON-PRIOR> 9541
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 14268
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 733
<OTHER-INCOME> 0
<EXPENSES-NET> 7
<NET-INVESTMENT-INCOME> 726
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 726
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 726
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 106671
<NUMBER-OF-SHARES-REDEEMED> 102549
<SHARES-REINVESTED> 605
<NET-CHANGE-IN-ASSETS> 4728
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 8
<AVERAGE-NET-ASSETS> 13138
<PER-SHARE-NAV-BEGIN> 1
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> .06
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1
<EXPENSE-RATIO> .06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
MIMLIC Cash Fund, Inc.:
We consent to the use of our report included herein and the references to our
Firm under the headings "FINANCIAL HIGHLIGHTS" and "COUNSEL AND INDEPENDENT
AUDITORS" in Part A and "FINANCIAL STATEMENTS" in Part B of the Registration
Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
January 14, 1998
<PAGE>
ADVANTUS MUTUAL FUNDS
AND MIMLIC CASH FUND
POWER OF ATTORNEY
TO SIGN REGISTRATION STATEMENT
The undersigned, Directors of Advantus Horizon Fund, Inc., Advantus
Spectrum Fund, Inc., Advantus Mortgage Securities Fund, Inc., Advantus Money
Market Fund, Inc., Advantus Bond Fund, Inc., Advantus Cornerstone Fund, Inc.,
Advantus Enterprise Fund, Inc., Advantus International Balanced Fund, Inc.,
Advantus Venture Fund, Inc., Advantus Index 500 Fund, Inc., and MIMLIC Cash
Fund, Inc. (the "Funds"), appoint Paul H. Gooding, Eric J. Bentley and
Michael J. Radmer, and each of them individually, as attorney-in-fact for the
purpose of signing in their names and on their behalf as Directors of the
Funds and filing with the Securities and Exchange Commission Registration
Statements on Form N-1A, or any amendments thereto, for the purpose of
registering shares of Common Stock of the Funds for sale by the Funds and to
register the Funds under the Investment Company Act of 1940.
Dated: July 31, 1996
/s/ Charles E. Arner
---------------------------------
Charles E. Arner
/s/ Ellen S. Berscheid
---------------------------------
Ellen S. Berscheid
/s/ Ralph D. Ebbott
---------------------------------
Ralph D. Ebbott
/s/ Frederick P. Feuerherm
---------------------------------
Frederick P. Feuerherm
/s/ Paul H. Gooding
---------------------------------
Paul H. Gooding
