<PAGE>
As filed with the Securities and Exchange Commission on October 31, 1996
Securities Act registration no. 33-23997
Investment Company Act file no. 811-5602
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 8 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 10 [X]
FASCIANO FUND, INC.
(Registrant)
190 S. LaSalle Street, Suite 2800
Chicago, Illinois 60603
Telephone number: 312/444-6050
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Michael F. Fasciano Janet D. Olsen
Fasciano Company, Inc. Bell, Boyd & Lloyd
Suite 2800 Suite 3200
190 S. LaSalle Street 70 West Madison Street
Chicago, Illinois 60603 Chicago, Illinois 60602
(Agents for service)
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Amending Parts A, B and C and filing exhibits
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It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of rule 485
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X on November 1, 1996 pursuant to paragraph (b) of rule 485
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60 days after filing pursuant to paragraph (a)(1) rule 485(a)
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on __________ pursuant to paragraph (a)(1) rule 485(a)
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75 days after filing pursuant to paragraph (a)(2) of rule 485
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on __________ pursuant to paragraph (a)(2) of rule 485
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Registrant has elected to register an indefinite number of securities pursuant
to Rule 24f-2. Registrant filed its Rule 24f-2 Notice for the fiscal year ended
June 30, 1996 on August 29, 1996.
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<PAGE>
FASCIANO FUND, INC.
Cross-reference sheet pursuant to rule 495(a) of Regulation C
Item Location or caption*
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PART A (PROSPECTUS)
1(a) & (b) Front cover
2(a) Fund Expenses
(b)-(c) Not applicable
3(a) Financial Highlights
(b) Not applicable
(c)-(d) Performance Information
4(a)(i) Other Information
(a)(ii)&(b) Investment Objectives and Policies;
Investment Restrictions
(c) Investment Risks
5(a) Management of the Fund
(b) Management of the Fund; back cover
(c) Management of the Fund
(d) Management of the Fund
(e) Back cover
(f) Management of the Fund
(g) Not applicable
5A The information called for is contained in the
fund's annual report.
6(a) Other Information
(b)-(d) Not applicable
(e) Other Information
(f) Dividends and Distributions
(g) Taxation
7 Purchasing Shares
(a) Not Applicable
(b) Purchasing Shares; Net Asset Value
(c) Purchasing Shares
(d) Purchasing Shares; front cover
(e)-(f) Not Applicable
8(a) Redeeming Shares
(b) Purchasing Shares
(c) & (d) Redeeming Shares
9 Not applicable
<PAGE>
Item Location or caption*
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PART B (STATEMENT OF ADDITIONAL INFORMATION)
10(a) & (b) Front cover
11 Table of Contents
12 History of the Fund
13(a)-(c) Investment Policies; Investment Restrictions
(d) Not applicable
14(a) & (b) Directors and Officers
(c) Not applicable
15(a) Not applicable
(b) Certain Shareholders
(c) Directors and Officers
16(a) & (b) Investment Adviser
(c) Not applicable
(d) Administrator, Custodian and Transfer Agent
(e)-(g) Not applicable
(h) Administrator, Custodian and Transfer Agent,
Independent Public Accountants
(i) Not applicable
17(a) Portfolio Transactions
(b) Not applicable
(c) & (d) Portfolio Transactions
(e) Not applicable
18 Not applicable
19(a) Purchasing and Redeeming Shares
(b) Purchasing and Redeeming Shares;
Financial Statements
(c) Purchasing and Redeeming Shares
20 Additional Tax Information
21(a)-(c) Not applicable
22(a) Not applicable
(b) Performance Information
23 Financial Statements
<PAGE>
Item Location or caption
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PART C (OTHER INFORMATION)
24 Financial statements and exhibits
25 Persons controlled by or under common control
with registrant
26 Number of holders of securities
27 Indemnification
28 Business and other connections of
investment adviser
29 Principal underwriters
30 Location of accounts and records
31 Management services
32 Undertakings
<PAGE>
PROSPECTUS
FASCIANO FUND, INC.
A NO-LOAD FUND NOVEMBER 1, 1996
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[LOGO]
190 South LaSalle Street
Suite 2800
Chicago, Illinois 60603
(312) 444-6050
(800) 848-6050
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INVESTMENT OBJECTIVE: LONG-TERM CAPITAL GROWTH
NO SALES OR 12b-1 CHARGES
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MINIMUM INVESTMENT PLANS AVAILABLE
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REGULAR AND IRA ACCOUNTS: - INDIVIDUAL RETIREMENT ACCOUNT (IRA)
Initial investment: $1,000
Subsequent investments: $100 - AUTOMATIC INVESTMENT PLAN
AUTOMATIC INVESTMENT PLAN: - SYSTEMATIC WITHDRAWAL PLAN
No initial investment required
Each automatic investment: $50
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION YOU SHOULD KNOW BEFORE
INVESTING. PLEASE READ IT CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE. A
STATEMENT OF ADDITIONAL INFORMATION DATED THE DATE OF THIS PROSPECTUS, AND
CONTAINING MORE INFORMATION ABOUT THE FUND, HAS BEEN FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION AND (TOGETHER WITH ANY SUPPLEMENTS THERETO) IS
INCORPORATED HEREIN BY REFERENCE. THE STATEMENT OF ADDITIONAL INFORMATION IS
AVAILABLE WITHOUT CHARGE AT THE ADDRESS AND TELEPHONE NUMBER SET FORTH ABOVE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
TABLE OF CONTENTS
FUND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Shareholder Transaction Expenses . . . . . . . . . . . . . . . . . . 1
Annual Fund Operating Expenses . . . . . . . . . . . . . . . . . . . 1
FINANCIAL HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . 3
INVESTMENT RISKS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
INVESTMENT RESTRICTIONS. . . . . . . . . . . . . . . . . . . . . . . . . 4
PERFORMANCE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 4
PURCHASING SHARES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
REDEEMING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ACCOUNT REGISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . 7
NET ASSET VALUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
IRA PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
MANAGEMENT OF THE FUND . . . . . . . . . . . . . . . . . . . . . . . . . 7
Directors and Investment Adviser . . . . . . . . . . . . . . . . . . 7
Administrator. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Fees and Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 8
Portfolio Transactions . . . . . . . . . . . . . . . . . . . . . . . 8
DIVIDENDS AND DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . 8
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SHARE PURCHASE APPLICATION . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
FUND EXPENSES
The following table illustrates all expenses and fees that a shareholder of the
Fund will bear.
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees (a) None
ANNUAL FUND OPERATING EXPENSES
(stated as a percentage of average net assets)
Management Fees 1.0%
12b-1 Fees None
Other Expenses 0.5%
----
Total Fund Operating Expenses 1.5%
(a) A shareholder requesting payment of redemption proceeds by
wire must pay the cost of the wire (currently $10). That
charge and any similar service fee may be changed without
prior notice to shareholders.
EXAMPLE
You would pay the following expenses on a $1,000 investment in the Fund,
assuming (1) a 5% annual rate of return (as required by the Securities and
Exchange Commission for purposes of this example), (2) the same operating
expense percentage that the Fund experienced in the past fiscal year, (3)
reinvestment of all dividends and capital gain distributions and (4) redemption
at the end of each period:
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
$15 $47 $82 $179
The table and example are intended to help you understand the costs and
expenses that an investor in the Fund bears, directly or indirectly. THIS
EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR
PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
Although information such as that shown above is useful in reviewing the
Fund's expenses and in providing a basis for comparison with other mutual funds,
it should not be used for comparison with other investments using different
assumptions or time periods.
-1-
<PAGE>
FINANCIAL HIGHLIGHTS
The table below reflects the results of the Fund's operations for a share
outstanding throughout the periods shown below and has been audited by Arthur
Andersen LLP, the Fund's independent public accountants. This table should be
read in conjunction with the Fund's financial statements and notes thereto,
which are incorporated by reference into the statement of additional information
and which may be obtained from the Fund upon request without charge.
<TABLE>
<CAPTION>
Year Ended June 30,
-----------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989(a)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of year $20.17 $17.34 $17.74 $16.30 $15.67 $14.20 $12.72 $11.22
Income from investment operations
Net investment income (loss) (0.05) (0.24) (0.05) (0.05) 0.03 0.11 0.11 0.25
Net realized and unrealized gain
on securities 5.55 4.21 0.65 1.95 0.99 1.87 1.57 1.94
------ ------ ------ ------ ------ ------ ------ ------
Total from investment operations 5.50 3.97 0.60 1.90 1.02 1.98 1.68 2.19
Less distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00 (0.02) (0.12) (0.12) (0.12)
Distributions from realized gains
on securities (1.34) (1.14) (1.00) (0.46) (0.36) (0.38) (0.03) (0.56)
Provision for income tax on
realized gains 0.00 0.00 0.00 0.00 (0.01) (0.01) (0.05) (0.01)
------ ------ ------ ------ ------ ------ ------ ------
Total distributions and taxes (1.34) (1.14) (1.00) (0.46) (0.39) (0.51) (0.20) (0.69)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value at end of year $24.33 $20.17 $17.34 $17.74 $16.30 $15.67 $14.20 $12.72
------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN 28.3% 24.1% 3.3% 11.8% 6.5% 14.8% 12.9% 30.4%*
Ratios/Supplemental Data:
Net assets at end of period
(in thousands) $28,981 $20,868 $16,582 $15,458 $10,564 $7,445 $5,196 $3,574
Expenses, excluding provision for
taxes, to average net assets (b) 1.5% 1.7% 1.7% 1.7% 1.7% 1.9% 2.0% 0.6%*
Net investment income (loss) before
taxes to average net assets (c) (0.3)% (0.6)% (0.3)% (0.3)% 0.2% 0.7% 0.9% 3.3%*
Portfolio turnover rate 45.6% 37.9% 99.0% 43.2% 29.0% 7.7% 57.2% 25.1%
</TABLE>
* Annualized.
(a) From November 10, 1988, the date on which shares were first offered for
sale to the public.
(b) If the Fund had paid all of its expenses, excluding provision for Federal
income tax, and there had been no reimbursement by the investment adviser,
this ratio would have been 2.7% for the period ended June 30, 1989 and 2.1%
for the year ended June 30, 1990.
(c) If the Fund had paid all of its expenses, excluding provision for Federal
income tax, and there had been no reimbursement by the investment adviser,
this ratio would have been 1.2% for the period ended June 30, 1989 and 0.8%
for the year ended June 30, 1990.
-2-
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The primary investment objective of the Fund is long-term capital growth.
Current income is considered in selecting securities, but its importance is
secondary to capital growth. There can be no assurance that the Fund will
achieve its investment objective.
Fasciano Company, Inc. (the "Adviser") believes long-term capital growth can
best be achieved by investing in the common stock of companies with unique
competitive advantages and leadership positions in growing niche markets.
Typically, these companies are highly profitable, providing management with
ample cash flow to capitalize on business opportunities. The Adviser considers
other investment aspects to be important, particularly insider ownership and
stock valuations. The Adviser prefers companies where management is motivated by
stock ownership to enhance stockholders' wealth, and the Adviser evaluates
management on that basis. The Adviser is attentive to stock valuations,
especially price-to-earnings ratios as a means of regulating risk and enhancing
long-term returns. While the Adviser may select investments with other
attributes for the Fund, in general, the Adviser selects common stocks of
closely-held public companies with strong earnings and moderate price-to-
earnings ratios.
In the opinion of the Adviser, smaller companies (having market
capitalizations of less than one billion dollars) are more likely to sustain
higher long-term rates of growth, and therefore present better opportunities for
long-term capital growth than larger companies. Furthermore, smaller companies
are not as widely followed by institutional investors and are more likely to be
undervalued. However, the Fund may invest in larger companies that present
attractive opportunities for long-term capital growth.
The Fund invests in companies on a long-term basis and emphasizes long-term
investment performance. The Adviser has an investment time horizon of three to
five years. Prospective investors should invest in the Fund with a time horizon
of three years or longer to be consistent with the Adviser. From time to time,
however, the Fund may invest on a short-term basis or may sell within a few
months securities purchased on a long-term basis.
The Fund is ordinarily substantially fully invested and does not attempt to
invest based on a market timing strategy. The Fund expects that the major
portion of its portfolio will at all times be invested in common stocks and
securities having common stock characteristics, including securities convertible
into common stocks, and rights and warrants to purchase common stocks. The Fund
may invest in corporate or government obligations or hold cash or cash
equivalents if a temporary defensive position is considered advisable.
INVESTMENT RISKS
All investments, including those in mutual funds, have risks and the Fund is
not intended to present a balanced investment program. The Fund is designed for
long-term investors who can accept the fluctuations in portfolio value and other
risks associated with seeking long-term capital growth through investments in
securities. The securities in which the Fund invests are subject to individual
market fluctuations.
The securities of small companies, as a class, have shown market behavior
which has had periods of favorable results and other periods of less favorable
results relative to larger companies as a class. Stocks of small companies tend
to be more volatile and less liquid than stocks of large companies. Small
companies, as compared to larger companies, may have a shorter history of
operations, may not have as great an ability to raise additional capital, may
have a less diversified product line making them susceptible to market pressure,
and may have a smaller public market for their shares.
The Fund's investment objective may be changed by the board of directors
without shareholder approval. The Fund will notify shareholders at least 30 days
prior to a change in the Fund's investment objective. If there is a change in
the Fund's investment objective, you should consider whether the Fund remains an
appropriate investment in light of your then current financial position and
needs. There can be no assurance that the Fund will achieve its objective.
-3-
<PAGE>
INVESTMENT RESTRICTIONS
The Fund will not:
1. Invest more than 5% of its assets (valued at the time of
investment) in securities of any one issuer, except in U.S.
government obligations;
2. Acquire securities of any one issuer which at the time of
investment (a) represent more than 10% of the voting securities
of the issuer or (b) have a value greater than 10% of the value
of the outstanding securities of the issuer;
3. Invest more than 10% of its net assets (valued at the time of
investment) in securities for which there is no ready market
(including restricted securities and repurchase agreements
maturing in more than seven days); or
4. Borrow, except in amounts up to 10% of its total assets, provided
(i) that the total of reverse repurchase agreements and such
borrowings will not exceed 5% of the Fund's total assets and (ii)
the Fund will not purchase securities when its borrowings exceed
5% of total assets.
These restrictions cannot be changed without the approval of a "majority of
the outstanding" shares of the Fund as defined in the Investment Company Act of
1940. All of the Fund's investment restrictions are listed in the Statement of
Additional Information.
PERFORMANCE INFORMATION
From time to time, in advertisements or sales literature, the Fund may present
information about its performance, including "total return" and "average annual
total return" on a hypothetical investment in Fund shares.
Total return for a period is the percentage change in value during the period
of an investment in Fund shares, including the value of shares acquired through
reinvestment of all dividends and capital gain distributions. Average annual
total return is the average annual compounded rate of change in value
represented by the total return for the period. The effect of income taxes will
not be taken into account. Performance information supplied by the Fund may not
provide a basis of comparison with other investments using different
reinvestment assumptions or time periods.
The Fund may also compare its performance to various stock indices (groups of
unmanaged common stocks), such as the New York Stock Exchange Composite Index,
S&P 500, the NASDAQ Composite Index and Dow Jones Industrial Average, or to the
Consumer Price Index or groups of comparable mutual funds, including ranking
determined by Lipper Analytical Services, Inc., Morningstar, Inc., or another
independent service.
Performance of the Fund will vary from time to time, and past results are not
necessarily indicative of future results. Information about the Fund's
performance is contained in the Fund's annual report which may be obtained free
of charge by calling 1-800-848-6050.
PURCHASING SHARES
You may purchase shares of the Fund at net asset value by check, by wire or
through the Fund's Automatic Investment Plan. There are no sales commissions or
underwriting discounts. The minimum initial investment is $1,000 (except for an
Automatic Investment Plan) and minimum subsequent investments are $100
(excluding reinvestments of dividends and capital gain distributions), or $50
under the Automatic Investment Plan described below. The purchase price of Fund
shares is the net asset value per share next determined after your Share
Purchase Application (for a new account) and funds are received in proper order
and accepted by the Fund. See "Net Asset Value."
PURCHASING SHARES BY CHECK. To purchase shares by check, complete and sign the
Share Purchase Application at the back of this prospectus and mail it, with a
check in U.S. dollars drawn on a U.S. bank for the total purchase price, to the
Fund's transfer agent, FIRSTAR TRUST COMPANY, P. O. BOX 701, MILWAUKEE,
WISCONSIN 53201-0701.
PURCHASING SHARES BY WIRE. You may also pay for Fund shares by wire transfer of
the purchase price. Before wiring funds, call Firstar Trust Company ("Firstar")
at (800) 338-1579 to ensure prompt and accurate handling of your investment.
Then instruct your bank to wire the purchase price to "Firstar Bank-Milwaukee
-4-
<PAGE>
N.A., ABA number 075000022, Credit Firstar Trust Company, Account 112-952-137,
Further Credit: Fasciano Fund, Inc., Attention: Mutual Fund Department
(shareholder name; account number)". Your bank may charge you a fee for sending
the wire. The Fund is not responsible for the consequences of delays, including
delays in the banking or Federal Reserve wire system.
AUTOMATIC INVESTMENT PLAN. The Automatic Investment Plan allows you to purchase
shares by an electronic transfer of funds at regular monthly intervals from your
bank checking account, money market account, NOW account or savings account.
There is no minimum initial investment if you enroll in the Automatic
Investment Plan when you open your account. Your account will be debited and
shares will be purchased at regular monthly intervals of your choosing. You may
join the Automatic Investment Plan by completing that portion of the Share
Purchase Application or filling out a separate Automatic Investment Plan
Application which you may obtain from the Fund or the transfer agent. You may
cancel your participation in the Plan or change the amount of purchase or the
day each month on which shares are purchased at any time by calling (800) 338-
1579 or by writing to the Fund, c/o Firstar Trust Company, P. O. Box 701,
Milwaukee, Wisconsin 53201-0701. The change or cancellation will be effective
five business days following receipt. For details on how to change your Plan
options or terminate the Plan by telephone, see "Account Registration."
Each investment through the Automatic Investment Plan must be at least $50 and
not more than $50,000. For you to participate in the Plan, your bank or other
financial institution must be an Automated Clearing House member. It will take
about 15 days for Firstar to process your Automatic Investment Plan enrollment.
The Fund may modify or terminate the Automatic Investment Plan at any time or
charge a service fee, although no such fee is currently contemplated.
GENERAL. Each investment in shares of the Fund, including dividends and capital
gain distributions reinvested in Fund shares, is acknowledged by a statement
showing the number of shares purchased, the net asset value at which the shares
are purchased, and the new balance of Fund shares owned. Generally the Fund does
not issue stock certificates for the shares, although stock certificates in full
share amounts will be furnished upon your written request. Fractional shares, if
any, will be carried on the books of the Fund without the issuance of
certificates.
The Fund reserves the right not to accept purchase orders under circumstances
or in amounts considered disadvantageous to existing shareholders, or which do
not include properly certified social security or taxpayer identification
numbers. In addition to any loss sustained by the Fund, Firstar will charge a
fee (currently $15) against any person whose check is returned for insufficient
funds.
The Fund does not consider the U.S. Postal Service or other independent
delivery services to be its agents. Therefore, deposit in the mail or with such
services, or receipt at Firstar Trust Company's Post Office Box of purchase
applications does not constitute receipt by Firstar Trust Company or the Fund.
DO NOT mail letters by overnight courier to the Post Office Box address.
Correspondence mailed by overnight courier should be sent to Firstar Trust
Company, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
PURCHASES AND REDEMPTIONS THROUGH DEALERS. You may purchase or redeem shares of
the Fund through an investment dealer, bank or other institution. Any such
purchase or redemption generally will not be effective until the order or
request is received by the Fund's transfer agent. However, the Fund may enter
into an agreement with such an institution allowing the institution to process
purchase orders or redemption requests for its customers with the Fund on an
expedited basis, including requesting share redemptions by telephone. Although
these arrangements might permit you to effect a purchase or redemption of Fund
shares through the institution more quickly than would otherwise be possible,
the institution may impose charges for its services. Any such charges could
constitute a substantial portion of a smaller account, and may not be in your
best interest. You may purchase or redeem shares of the Fund directly from or
with the Fund without imposition of any charges other than those described in
this prospectus.
REDEEMING SHARES
The Fund will redeem all or any part of your shares upon your written request
delivered to the Fund's transfer agent, Firstar Trust Company, P. O. Box 701,
Milwaukee, Wisconsin 53201-0701.
-5-
<PAGE>
Your redemption request must:
(1) SPECIFY THE NUMBER OF SHARES OR DOLLAR AMOUNT TO BE REDEEMED, if less
than all shares are to be redeemed;
(2) BE SIGNED BY ALL OWNERS exactly as their names appear on the account;
(3) if the shares to be redeemed have a value of more than $20,000, or if the
redemption proceeds are to be sent to an address different from the
address in the Fund's records, include a SIGNATURE GUARANTEE (the
guarantor must be a bank, member firm of a national securities exchange,
savings and loan association, credit union, or other entity authorized by
state law to guarantee signatures; a notary public is not an acceptable
guarantor); and
(4) be accompanied by properly endorsed STOCK CERTIFICATES representing the
shares to be redeemed, if they are represented by certificates
In the case of shares held by a corporation, the redemption request must be
signed in the name of the corporation by an officer whose title must be stated,
and a certified bylaw provision or resolution of the board of directors
authorizing the officer to so act must be furnished. In the case of a trust or a
partnership, the signature must include the name of the registered shareholder
and the title of the person signing on its behalf. Redemption requirements for
shares held under a Fasciano Fund IRA are described in separate disclosure
information for the plan. Under certain circumstances, before the shares can be
redeemed, additional documents may be required in order to verify the authority
of the person seeking to redeem.
The Fund does not consider the U.S. Postal Service or other independent
delivery services to be its agents. Therefore, deposit in the mail or with such
services, or receipt at Firstar Trust Company's Post Office Box of redemption
requests does not constitute receipt by Firstar Trust Company or the Fund. Do
not mail letters by overnight courier to the Post Office Box address.
Correspondence mailed by overnight courier should be sent to Firstar Trust
Company, Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
SYSTEMATIC WITHDRAWAL PLAN. The Systematic Withdrawal Plan allows you to set up
automatic redemptions at regular intervals from your account if you have a
$10,000 minimum account balance. You may join the Systematic Withdrawal Plan by
completing that portion of the Share Purchase Application or filling out a
separate Systematic Withdrawal Plan Application which you may obtain from the
Fund or the transfer agent. You may cancel your participation in the Plan or
change the amount of withdrawal at any time by calling (800) 338-1579 or by
writing to the Fund at, c/o Firstar Trust Company, P. O. Box 701, Milwaukee,
Wisconsin 53201-0701. The change or cancellation will be effective five business
days following receipt. The Systematic Withdrawal Plan does not apply to Fund
shares held in Individual Retirement Accounts.
For details on how to change your Plan options or terminate the Plan by
telephone, see "Account Registration."
- --------------------------------------------------------------------------------
If you need more information on redemption procedures, including information
on redemption of shares held in IRA and other retirement accounts, please call
the Fund's transfer agent toll-free at (800) 338-1579.
- --------------------------------------------------------------------------------
The redemption price per share is the net asset value determined as described
under "Net Asset Value." There is no redemption charge. The redemption value of
the shares may be more or less than your cost depending upon the value of the
Fund's portfolio securities at the time of redemption.
You may not cancel or revoke your redemption order once instructions have been
received and accepted. Payment for shares redeemed is made within seven days
after receipt by Firstar of a request for redemption in proper form. However,
redemption payments for shares that were purchased by check may be delayed until
the Fund can verify that the payment for the shares has been collected, which
may take several days. The Fund reserves the right to suspend or postpone
redemptions during any period when (a) trading on the New York Stock Exchange is
restricted, as determined by the Securities and Exchange Commission, or that
exchange is closed for other than customary weekend and holiday closings, (b)
the Commission has by order permitted such suspension, or (c) an emergency, as
determined by the Commission, exists making disposal of portfolio securities or
valuation of net assets of the Fund not reasonably practicable.
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<PAGE>
ACCOUNT REGISTRATION
ADDRESS CHANGES on your account may be made by calling (800) 338-1579. The
Fund will send you a written statement showing the change to both your new and
old addresses. Any written redemptions received within 15 days after the address
change must be accompanied by a signature guarantee.
AUTOMATIC INVESTMENT PLAN AND SYSTEMATIC WITHDRAWAL PLAN CHANGES may be made
by telephone. Plan changes that may be made by telephone include increasing or
decreasing investment/withdrawal amounts, changing the frequency of
investment/withdrawal or terminating either Plan.
DIVIDEND AND CAPITAL GAIN DISTRIBUTION CHANGES may also be made by telephone.
A telephone request changing the reinvestment of dividend and capital gain
distributions to the receipt of payment, will be honored only if the proceeds
are to be sent to the address of record on the account. For more details, see
"Dividends and Distributions."
The Fund reserves the right to record all account registration changes made by
telephone.
NET ASSET VALUE
The price per share for a purchase order or redemption request is the net
asset value next determined after receipt of the order or request in proper
form. The net asset value of a share of common stock of the Fund is determined
as of the time of the close of regular session trading on the New York Stock
Exchange on any day on which that exchange is open for trading. The net asset
value of a share of the Fund is the value of the Fund's assets, less its
liabilities, divided by the number of shares outstanding.
Securities traded on a stock exchange are ordinarily valued on the basis of
the last sale price on the date of valuation or, in the absence of any sale on
that day, the closing bid price. Other securities are generally valued at the
current bid price. Any securities for which there are no readily available
market quotations and all assets other than securities will be valued at a fair
value, as determined in good faith by the board of directors.
IRA PLAN
The Fund has a master individual retirement account (IRA) plan which allows
you to invest in the Fund. Income and capital gains earned by an IRA are
sheltered from taxation until withdrawal. There is a $1,000 initial minimum
investment. The plan also permits you to "roll over" to a Fasciano Fund IRA a
lump sum distribution from a qualified pension or profit-sharing plan, including
by a direct transfer from the plan trustee, thereby postponing your federal
income tax on the distribution if rolled over within 60 days. Many distributions
from qualified plans are subject to income tax withholding unless transferred
directly from the plan to an IRA or another plan.
If your employer has a Simplified Employee Pension Plan (SEP), you may
establish an IRA with the Fund to which your employer may contribute annually up
to the lesser of 15% of your earned income or $30,000, subject to special rules
designed to avoid discrimination. The Fund's IRA plan also permits establishment
of salary reduction SEPs (SAR-SEPs) through December 31, 1997, and Savings
Incentive Match Plan IRAs (SIMPLE-IRAs) beginning January 1, 1997.
Detailed information about the IRA, including related documents and charges of
Firstar, as custodian, may be obtained from the Fund.
MANAGEMENT OF THE FUND
DIRECTORS AND INVESTMENT ADVISER
The board of directors has overall responsibility for the conduct of the
Fund's affairs. Subject to the authority of the board of directors, the
investment adviser, Fasciano Company, Inc. (the "Adviser"), furnishes continuous
investment supervision and management to the Fund under an investment advisory
agreement. The Adviser, which is wholly-owned by Michael F. Fasciano, is a
registered investment adviser organized in November 1986. As of the date of this
prospectus, the Fund is the Adviser's only investment advisory client.
Mr. Fasciano, who is president of the Fund and the Adviser, has been
responsible for management of the Fund's portfolio since the Fund began
operations. Mr. Fasciano is a Chartered Financial Analyst and has been employed
in the securities industry since 1978. Before organizing Fasciano Company, Mr.
Fasciano was a securities analyst and portfolio manager.
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<PAGE>
ADMINISTRATOR
Beginning January 1, 1997, Firstar Trust Company will be the Fund's
Administrator and, under the supervision of the Adviser and the Fund's board of
directors, will generally assist the Fund in all aspects of its administration
and operations. Firstar will receive a monthly fee at the annual rate of 0.06%
of the Fund's average daily net assets, subject to certain minimum annual fees
described in the statement of additional information.
FEES AND EXPENSES
The Adviser manages the investment and reinvestment of the Fund's assets. At
its own expense, the Adviser provides office space to the Fund and all necessary
facilities, equipment and personnel for managing the assets of the Fund. For
these services, the Adviser receives a monthly fee at the annual rate of 1% of
the Fund's average daily net assets. The Fund pays all of its operating expenses
not specifically assumed by the Adviser, which amounted to 1.5% of the Fund's
average net assets during the fiscal year ended June 30, 1996, including the
advisory fee. The Fund's investment advisory agreement also includes the
conditions under which the Fund may use "Fasciano" in its name.
PORTFOLIO TRANSACTIONS
The Adviser places the orders for the purchase and sale of the Fund's
portfolio securities. In doing so, the Adviser seeks to obtain the best
combination of net price and execution, which involves a number of judgmental
factors. When the Adviser believes that more than one broker or dealer is
capable of providing the best combination of price and execution in a particular
portfolio transaction, the Adviser often selects a broker or dealer that has
furnished it with research services.
DIVIDENDS AND DISTRIBUTIONS
The Fund intends to distribute substantially all its net investment income and
any net capital gain realized from sales of the Fund's portfolio securities at
least annually. Dividends and capital gain distributions, if any, are reinvested
in additional shares of the Fund unless you have requested in writing or on your
Share Purchase Application to have them paid to you by check or by automatic
deposit to your bank account. For details on how to change your distribution
option by telephone, see "Account Registration."
TAXATION
The Fund intends to continue to qualify, as it has since it began offering its
shares to the public, as a regulated investment company under the Internal
Revenue Code, so as to be relieved of federal income tax on its net investment
income and net capital gains, to the extent that it distributes such amounts to
shareholders.
Dividends from net investment income and net short-term capital gains are
taxable as ordinary income. Distributions of long-term capital gains are taxable
as long-term capital gains regardless of the length of time you have held your
shares in the Fund. Distributions will be taxable to you whether received in
cash or reinvested in shares of the Fund.
If you purchase shares shortly before a record date for a distribution you
will, in effect, receive a return of a portion of your investment, but the
distribution will be taxable to you even if the net asset value of your shares
is reduced below your cost. However, for federal income tax purposes your
original cost would continue as your tax basis. If you redeem shares within six
months, any loss on the sale of those shares would be long-term capital loss to
the extent of any distributions of long-term capital gain that you have received
on those shares.
If you fail to furnish your social security or other taxpayer identification
number or to certify properly that it is correct, the Fund may be required to
withhold federal income tax ("backup withholding") from dividend, capital gain,
and redemption payments to you. Your dividend and capital gain payments may also
be subject to backup withholding if you fail to certify properly that you are
not subject to backup withholding due to the underreporting of certain income.
These certifications are contained in the Share Purchase Application which you
should complete and return to the Fund when you make your initial investment.
-8-
<PAGE>
OTHER INFORMATION
The Fund was incorporated in Maryland on May 28, 1987, and commenced
operations as a private investment company on August 1, 1987 at $10.00 per
share. On June 30, 1988 the Fund registered as a diversified open-end management
investment company under the Investment Company Act of 1940 and began offering
its shares to the public on November 10, 1988. Each share of the Fund's capital
stock, $.01 par value, is entitled to share pro rata in any dividends and other
distributions on shares declared by the board of directors, to one vote per
share in elections of directors and other matters presented to shareholders, and
to equal rights per share in the event of liquidation.
As a Maryland corporation registered as an investment company under the
Investment Company Act of 1940, the Fund is not required to hold routine annual
meetings and does not expect to do so. Maryland law permits shareholders to
remove directors under certain circumstances and requires the Fund to assist in
shareholder communications.
Inquiries about purchases and redemptions of Fund shares, or about your
account, should be directed to the Fund's transfer agent. Other inquiries
regarding the Fund should be directed to the Fund. The addresses and telephone
numbers of the Fund and its transfer agent are shown on the back cover.
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<PAGE>
THIS PAGE LEFT INTENTIONALLY BLANK
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<PAGE>
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FASCIANO FUND, INC.
- --------------------------------------------------------------------------------
SHARE PURCHASE APPLICATION
NOTE: Please read the application and the terms below carefully. [LOGO]
THIS APPLICATION IS NOT TO BE USED FOR IRA ACCOUNTS.
Make checks payable to, and mail to: Fasciano Fund, Inc.,
c/o Firstar Trust Company, P.O. Box 701, Milwaukee,
Wisconsin 53201-0107
A. PURCHASE ------------------------------------------------------------------
Purchase by:
/ / Check for $___________________($1,000 minimum for new account)
/ / Automatic Investment Plan transfer of $_______________________
(please complete the Automatic Investment Plan section below)
/ / Wire for $_____________________to Firstar Bank-Milwaukee N.A., ABA
number 075000022, Credit Firstar Trust Company, Account Number
112-952-137, Further Credit: Fasciano Fund, Inc., Attention: Mutual
Fund Department (shareholder name, account number)
B. REGISTRATION (check one) --------------------------------------------------
/ / Individual or Joint Account: _________________ ______________________
(Individual) (Joint Tenant, if any)
/ / Corporations, Trusts or Others:
______________________________________________________
(Trustee(s), corporation, partnership or other entity)
/ / Gift to Minor:______________________ Custodian for____________________
(Custodian) (Minor)
Under the Uniform Gift to Minors Act of ______________________________
(State)
SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER: _____________________________
(If this is a Uniform Gift to Minor account, use the minor's Social Security
number)
I AM A CITIZEN OF / / U.S. / / OTHER (SPECIFY)_____________________________
(If shares are to be registered jointly, all owners must sign. Any registration
in the names of two or more co-owners will, unless otherwise specified, be as
joint tenants with right of survivorship and not as tenants in common.)
- --------------------------------------------------------------------------------
C. ADDRESS OF RECORD _________________________________________________________
Zip Code______________ Telephone ( )___________________
D. DIVIDEND ELECTION _________________________________________________________
All dividends and capital gain distributions on all shares held by you will
be reinvested in additional shares, as set forth in the
prospectus, unless you check this box.
/ / Dividends and capital gain distribution in cash. ATTACH AN UNSIGNED
VOIDED CHECK (FOR CHECKING ACCOUNTS) OR A SAVINGS ACCOUNT DEPOSIT SLIP
FOR YOUR BACK ACCOUNT, AND YOUR CASH PAYMENT WILL BE DIRECTLY
DEPOSITED TO THIS ACCOUNT.
E. AUTOMATIC INVESTMENT PLAN _________________________________________________
AN UNSIGNED VOIDED CHECK (FOR CHECKING ACCOUNTS) OR A SAVINGS ACCOUNT
DEPOSIT SLIP IS REQUIRED WITH YOUR APPLICATION.
Please start my Automatic Investment Plan as described in the prospectus
beginning:________________________ (Month and Year). I hereby instruct
Firstar Trust Company, Transfer Agent for the Fund, to automatically
transfer $_____________ (minimum $50, maximum $50,000) directly from my
checking, NOW or savings account named below on the ______ of each month or
the first business day thereafter. I understand that I will be assessed a
$15 fee if the automatic purchase cannot be made due to insuffficient
funds, stop payment, or for any other reason.
Name(s) on Bank Account ___________________________________________________
Bank Name ______________________________ Bank Routing Number ______________
Bank Address ______________________________________________________________
Signature of Bank Account Owner ___________________________________________
Signature of Joint Owner __________________________________________________
F. SYSTEMATIC WITHDRAWAL PLAN
A BALANCE OF AT LEAST $10,000 IS REQUIRED FOR THIS OPTION.
I would like to withdraw $______________ ($100 minimum) as follows:
/ / I would like to have payments made to me on or about the
day of each month, OR
/ / I would like to have payments made on or about the _____ day of the
months that I have circled below:
Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
/ / I would like to have my payments automatically deposited to my
checking or savings account. I have attached a voided check or deposit
slip. (A check will be mailed to the above Account registration
address if this box is not checked)
- --------------------------------------------------------------------------------
G. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE
I am (We are) of legal age, have received and read a current prospectus of
Fasciano Fund, Inc., and agree to the terms therein. Under the penalty of
perjury, I certify that (1) the Social Security Number or Taxpayer
Identification Number shown on this form is my correct Taxpayer
Identification Number, and (2) I am not subject to backup withholding
either because I have not been notified by the Internal Revenue Service
(IRS) that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or the IRS has notified me that I am no
longer subject to backup withholding. The IRS does not require your consent
in my provision of this document other than the certifications required to
avoid backup withholding. I (We) certify that (we) have full authority and
legal capacity to purchase Fund shares.
___________________________________ ___________________________________
Signed* Signature of Co-Owner, If Any
___________________________________
Date
*If shares are to be registered: 1) in joint names, both persons should
sign; 2) by a custodian for a minor, the custodian should sign; 3) by a
trust, the trustee(s) should sign; or 4) by a corporation or other entity,
an officer should sign and indicate title.
<PAGE>
PROSPECTUS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FASCIANO FUND, INC.
INVESTMENT ADVISER
Fasciano Company, Inc.
ADDRESS OF FUND AND ADVISER
190 South LaSalle Street
Suite 2800
Chicago, Illinois 60603
(312) 444-6050
(800) 848-6050
TRANSFER AGENT, DIVIDEND
DISBURSING AGENT AND CUSTODIAN
Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201
(414) 765-4124
(800) 338-1579
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
Chicago, Illinois
LEGAL COUNSEL
Bell, Boyd & Lloyd
Chicago, Illinois
MEMBER OF
- -------------------- [LOGO]
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NO-LOAD-TM- Chicago, Illinois
100% MUTUALFUND November 1, 1996
COUNCIL
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
November 1, 1996
FASCIANO FUND, INC.
190 S. LaSalle Street
Suite 2800
Chicago, Illinois 60603
(312) 444-6050
(800) 848-6050
This statement of additional information is not a prospectus, but provides
information about Fasciano Fund, Inc. (the "Fund") that should be read in
conjunction with the Fund's prospectus dated November 1, 1996 and any
supplements to the prospectus and the Fund's financial statements included in
its annual report to shareholders for the fiscal year ended June 30, 1996, a
copy of which accompanies this statement of additional information.
The prospectus and additional copies of the annual report may be obtained
without charge by writing or telephoning the Fund at the address or telephone
number set forth above.
TABLE OF CONTENTS
Page
----
History of the Fund. . . . . . . . . . . . . . . . . . . . .B-2
Investment Policies. . . . . . . . . . . . . . . . . . . . .B-2
Investment Restrictions. . . . . . . . . . . . . . . . . . .B-7
Performance Information. . . . . . . . . . . . . . . . . . .B-9
Investment Adviser . . . . . . . . . . . . . . . . . . . . .B-10
Directors and Officers . . . . . . . . . . . . . . . . . . .B-11
Certain Shareholders . . . . . . . . . . . . . . . . . . . .B-12
Purchasing and Redeeming Shares. . . . . . . . . . . . . . .B-12
Additional Tax Information . . . . . . . . . . . . . . . . .B-13
Portfolio Transactions . . . . . . . . . . . . . . . . . . .B-13
Administrator, Custodian and Transfer Agent. . . . . . . . .B-15
Independent Public Accountants . . . . . . . . . . . . . . .B-16
Financial Statements . . . . . . . . . . . . . . . . . . . .B-16
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . .B-17
<PAGE>
HISTORY OF THE FUND
The Fund began operations as a private investment company, not registered
under the Investment Company Act of 1940 (the "1940 Act"), on August 1, 1987.
The Fund registered under the 1940 Act on June 30, 1988 and began offering its
shares to the public on November 10, 1988.
INVESTMENT POLICIES
The primary investment objective of the Fund is long-term capital growth.
Current income is considered in selecting securities for the portfolio, but
its importance is secondary to capital growth. The Fund's investment
objective may be changed by the board of directors without shareholder approval.
DEBT SECURITIES
The Fund may invest in debt securities, including debt securities that are
not rated or are rated below investment grade by the recognized rating agencies
(i.e., BBB or higher by Standard & Poor's Corporation ("S&P") or Baa or higher
by Moody's Investor Services, Inc. ("Moody's")). There are no restrictions as
to the ratings of debt securities acquired by the Fund or the portion of the
Fund's assets that may be invested in debt securities in a particular ratings
category, except that the Fund will not invest more than 5% of its assets in
securities rated below investment grade ("junk bonds"). The Fund has no present
intention of investing in junk bonds.
Securities rated BBB or Baa are considered to be medium grade and to have
speculative characteristics. Lower-rated debt securities are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal. Investment in medium- or lower-quality debt securities involves
greater investment risk, including the possibility of issuer default or
bankruptcy. An economic downturn could severely disrupt the market for such
securities and adversely affect the value of such securities. In addition,
lower-quality bonds are less sensitive to interest rate changes than higher-
quality instruments and generally are more sensitive to adverse economic changes
or individual corporate developments. During a period of adverse economic
changes, including a period of rising interest rates, issuers of such bonds may
experience difficulty in servicing their principal and interest payment
obligations.
To the extent the Fund invests in lower-rated debt securities, achievement
by the Fund of its investment objective will be more dependent on the
Adviser's credit analysis than would be the case if the Fund were investing
in higher-quality debt securities. Since the ratings of rating services
(which evaluate the safety of principal and interest payments, not market
risks) are used only as preliminary indicators of investment quality, the
Adviser employs its own credit research and analysis. These analyses may
take into consideration such quantitative factors as an issuer's present and
potential liquidity, profitability, internal capability to generate funds,
debt/equity ratio and debt servicing capabilities, and such qualitative
factors as an assessment of management, industry characteristics, accounting
methodology, and foreign business exposure.
<PAGE>
Medium- and lower-quality debt securities tend to be less marketable than
higher-quality debt securities because the market for them is less broad. The
market for unrated debt securities is even narrower. During periods of thin
trading in these markets, the spread between bid and asked prices is likely to
increase significantly, and the Fund may have greater difficulty selling its
portfolio securities. The market value of these securities and their liquidity
may be affected by adverse publicity and investor perceptions. At June 30,
1996 the Fund held no debt securities other than short-term demand notes.
A description of the ratings used by S&P and Moody's is included as an
appendix to this statement of additional information.
FOREIGN SECURITIES
The Fund may invest in foreign securities, which may entail a greater
degree of risk (including risks relating to exchange rate fluctuations, exchange
controls, tax provisions, political instability, expropriation of assets, other
governmental restrictions and regulations and less available financial
information) than does investment in securities of domestic issuers.
The Fund will not invest more than 5% of its assets in foreign securities
and will not invest in securities traded only or primarily in emerging markets.
For this purpose, foreign securities do not include American Depository Receipts
(ADRs) or securities guaranteed by a United States person. ADRs are receipts
typically issued by an American bank or trust company evidencing ownership of
the underlying securities. As of June 30, 1996, the Fund held no foreign
securities.
To the extent positions in portfolio securities are denominated in foreign
currencies, the Fund's investment performance is affected by the strength or
weakness of the U.S. dollar against these currencies. For example, if the
dollar falls in value relative to the Japanese yen, the dollar value of a
Japanese stock held in the portfolio will rise even though the price of the
stock remains unchanged. Conversely, if the dollar rises in value relative to
the yen, the dollar value of the Japanese stock will fall. (See discussion of
transaction hedging under "Currency Exchange Transactions.")
Investors should understand and consider carefully the risks involved in
foreign investing. Investing in foreign securities, which are generally
denominated in foreign currencies, and utilization of forward foreign currency
exchange contracts involve both risks and opportunities not typically associated
with investing in U.S. securities. These considerations include: fluctuations
in exchange rates of foreign currencies; possible imposition of exchange control
regulation or currency restrictions that would prevent cash from being brought
back to the United States; less public information with respect to issuers of
securities; less governmental supervision of stock exchanges, securities
brokers, and issuers of securities; lack of uniform accounting, auditing, and
financial reporting standards; lack of uniform settlement periods and trading
practices; less liquidity and frequently greater price volatility in foreign
markets than in the United States; possible imposition of foreign taxes;
possible investment in securities of companies in developing as well as
developed countries; and sometimes less advantageous legal, operational, and
financial protections applicable to foreign sub-custodial arrangements.
<PAGE>
Although the Fund intends to invest in companies and governments of
countries having stable political environments, there is the possibility of
expropriation or confiscatory taxation, seizure or nationalization of foreign
bank deposits or other assets, establishment of exchange controls, the adoption
of foreign government restrictions, or other adverse political, social, or
diplomatic developments that could affect investment in these nations.
CURRENCY EXCHANGE TRANSACTIONS. Currency exchange transactions may be
conducted either on a spot (I.E., cash) basis at the spot rate for purchasing or
selling currency prevailing in the foreign exchange market or through forward
currency exchange contracts ("forward contracts"). Forward contracts are
contractual agreements to purchase or sell a specified currency at a specified
future date (or within a specified time period) and price set at the time of the
contract. Forward contracts are usually entered into with banks and broker-
dealers, are not exchange traded, and are usually for less than one year, but
may be renewed.
Forward currency transactions may involve currencies of the different
countries in which the Fund may invest and serve as hedges against possible
variations in the exchange rate between these currencies. The currency
transactions of the Fund are limited to transaction hedging involving specific
transactions. Transaction hedging is the purchase or sale of forward contracts
with respect to specific receivables or payables of a Fund accruing in
connection with the purchase and sale of its portfolio securities or the receipt
of dividends or interest thereon. The Fund's intention not to invest more than
5% of its assets in foreign securities effectively limits the extent of its
transactions in foreign currencies.
If the Fund enters into a forward contract, the Fund's custodian will
segregate assets of the Fund having a value equal to the Fund's commitment
under such forward contract. At the maturity of the forward contract, the Fund
may either sell the portfolio security related to the contract and deliver the
currency, or it may retain the security and either acquire the currency on the
spot market or terminate its contractual obligation to deliver the currency by
purchasing an offsetting contract with the same currency trader obligating it to
purchase on the same maturity date the same amount of the currency.
It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of a forward contract. Accordingly, it
may be necessary for the Fund to purchase additional currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the currency.
Conversely, it may be necessary to sell on the spot market some of the currency
received upon the sale of the portfolio security if its market value exceeds the
amount of currency the Fund is obligated to deliver.
If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. If the Fund engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell the
currency. Should forward prices decline during the period between the Fund's
entering into a forward contract for the sale of a currency and the date it
enters into an
<PAGE>
offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should
forward prices increase, the Fund will suffer a loss to the extent the price of
the currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell. A default on the contract would deprive the Fund of unrealized
profits or force the Fund to cover its commitments for purchase or sale of
currency, if any, at the current market price.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the value of a portfolio security traded in that currency or
prevent a loss if the value of the security declines. Hedging transactions also
preclude the opportunity for gain if the value of the hedged currency should
rise. Moreover, it may not be possible for the Fund to hedge against a
devaluation that is so generally anticipated that the Fund is not able to
contract to sell the currency at a price above the devaluation level it
anticipates. The cost to the Fund of engaging in currency exchange transactions
varies with such factors as the currency involved, the length of the contract
period, and prevailing market conditions. Since currency exchange transactions
are usually conducted on a principal basis, no fees or commissions are involved.
SHORT SALES
The Fund may make short sales of securities if at all times when a short
position is open the Fund owns an equal amount of such securities or securities
convertible into or exchangeable for, without payment of any further
consideration, securities of the same issue as, and equal in amount to, the
securities sold short. This technique is called selling short "against the
box." Although permitted by its investment restrictions, the Fund does not
currently intend to sell securities short.
In a short sale against the box, the Fund does not deliver from its
portfolio the securities sold and does not receive immediately the proceeds from
the short sale. Instead, the Fund borrows the securities sold short from a
broker-dealer through which the short sale is executed, and the broker-dealer
delivers such securities, on behalf of the Fund, to the purchaser of such
securities. Such broker-dealer is entitled to retain the proceeds from the
short sale until the Fund delivers to such broker-dealer the securities sold
short. In addition, the Fund is required to pay to the broker-dealer the amount
of any dividends paid on shares sold short. Finally, to secure its obligation
to deliver to such broker-dealer the securities sold short, the Fund must
deposit and continuously maintain in a separate account with the Fund's
custodian an equivalent amount of the securities sold short or securities
convertible into or exchangeable for such securities without the payment of
additional consideration. The Fund is said to have a short position in the
securities sold until it delivers to the broker-dealer the securities sold, at
which time the Fund receives the proceeds of the sale. Because the Fund
ordinarily will want to continue to hold securities in its portfolio that are
sold short, the Fund will normally close out a short position by purchasing on
the open market and delivering to the broker-dealer an equal amount of the
securities sold short, rather than by delivering portfolio securities.
Short sales may protect the Fund against the risk of losses in the value of
its portfolio securities because any unrealized losses with respect to such
portfolio securities should be
<PAGE>
wholly or partially offset by a corresponding gain in the short position.
However, any potential gains in such portfolio securities should be wholly or
partially offset by a corresponding loss in the short position. The extent
to which such gains or losses are offset will depend upon the amount of
securities sold short relative to the amount the Fund owns, either directly
or indirectly, and, in the case where the Fund owns convertible securities,
changes in the conversion premium. The Fund will incur transaction costs in
connection with short sales.
In addition to enabling the Fund to hedge against market risk, short sales
may afford a Fund an opportunity to earn additional current income to the extent
the Fund is able to enter into arrangements with broker-dealers through which
the short sales are executed to receive income with respect to the proceeds of
the short sales during the period the Fund's short positions remain open.
UNSEASONED ISSUERS
The Fund has the authority to invest up to 10% of its total assets in the
securities of unseasoned issuers, but has no present intention of investing more
than 5% of its total assets in such securities. An unseasoned issuer is an
issuer that, together with predecessors, has been in operation less than three
years. The Adviser believes that investment in securities of unseasoned issuers
may provide opportunities for long-term capital growth, although the risks of
investing in such securities are greater than with common stocks of more
established companies because unseasoned issuers have only a brief operating
history and may have more limited markets and financial resources. At June
30, 1996, the Fund held no securities of unseasoned issuers.
ILLIQUID SECURITIES
The Fund may invest up to 10% of its net assets, taken at market value, in
securities for which there is no ready market ("lliquid securities"), including
any securities that are not readily marketable either because they are
restricted securities or for other reasons. Restricted securities are
securities that have not been registered under the Securities Act of 1933 and
are thus subject to restrictions on resale. A position in restricted securities
might adversely affect the liquidity and marketability of a portion of the
Fund's portfolio, and the Fund might not be able to dispose of its holdings in
such securities promptly or at reasonable prices. In those instances where the
Fund is required to have restricted securities held by it registered prior to
sale by the Fund and the Fund does not have a contractual commitment from the
issuer or seller to pay the costs of such registration, the gross proceeds from
the sale of securities would be reduced by the registration costs and
underwriting discounts. Any such registration costs are not included in the 10%
limitation on the Fund's investment in restricted securities. The Fund does not
expect to invest in illiquid securities during the next fiscal year.
REPURCHASE AGREEMENTS
The Fund may enter into "repurchase agreements" pertaining to U.S.
Government securities with member banks of the Federal Reserve System or primary
dealers (as designated by the Federal Reserve Bank of New York) in such
securities. A repurchase agreement arises when the Fund purchases a security
and simultaneously agrees to resell it to the vendor at an agreed
<PAGE>
upon future date. The resale price is greater than the purchase price,
reflecting an agreed upon market rate of return that is effective for the
period of time the Fund holds the security and that is not related to the
coupon rate on the purchased security. Such agreements generally have
maturities of no more than seven days and could be used to permit the Fund to
earn interest on assets awaiting long term investment. The Fund requires
continuous maintenance by the custodian for the Fund's account in the Federal
Reserve/Treasury Book Entry System of collateral in an amount equal to, or in
excess of, the market value of the securities that are the subject of a
repurchase agreement. In the event of a bankruptcy or other default of a
seller of a repurchase agreement, the Fund could experience both delays in
liquidating the underlying securities and losses, including (i) possible
decline in the value of the collateral during the period while the Fund seeks
to enforce its rights thereto, (ii) possible subnormal levels of income and
lack of access to income during this period, and (iii) expenses of enforcing
its rights. The Fund will monitor the creditworthiness of firms with which
it enters into repurchase agreements. Repurchase agreements maturing in more
than seven days are considered illiquid securities. The Fund does not intend
to invest in repurchase agreements during the next fiscal year.
PORTFOLIO TURNOVER
The Fund normally invests on a long-term basis with an investment time
horizon of three to five years. The Fund's portfolio turnovers for its fiscal
years ended June 30, 1996 and 1995 were 45.6% and 37.9%, respectively.
INVESTMENT RESTRICTIONS
The Fund has adopted the following fundamental investment restrictions,
which cannot be changed without the approval of the holders of a majority of its
shares, as defined in the Investment Company Act of 1940:
1. The Fund will not invest more than 5% of its assets (valued at the
time of investment) in securities of any one issuer, except in U.S. government
obligations.
2. The Fund will not acquire securities of any one issuer which at the
time of investment (a) represent more than 10% of the voting securities of the
issuer or (b) have a value greater than 10% of the value of the outstanding
securities of the issuer.
3. The Fund will not invest more than 10% of its assets (valued at the
time of investment) in securities of issuers with less than three years'
operation (including predecessors).
4. The Fund will not invest more than 10% of its net assets (valued at
the time of investment) in securities for which there is no ready market
(including restricted securities and repurchase agreements maturing in more than
seven days).
5. The Fund will not participate in a joint trading account, purchase
securities on margin or sell securities short (unless the Fund owns
an equal amount of such securities, or owns
<PAGE>
securities that are convertible or exchangeable, without payment of further
consideration, into an equal amount of such securities).(1)
6. The Fund will not act as an underwriter or distributor of securities
other than its own capital stock, except insofar as it may be deemed an
underwriter for purposes of the Securities Act of 1933 on disposition of
securities acquired subject to legal or contractual restrictions on resale.
7. The Fund will not lend money, but this restriction shall not prevent
the Fund from investing in (i) a portion of an issue of publicly distributed
debt securities or (ii) repurchase agreements.
8. The Fund will not purchase or sell real estate or interests in real
estate, although it may invest in marketable securities of issuers that invest
in real estate or interests in real estate.
9. The Fund will not borrow, except that the Fund may borrow from banks
as a temporary measure amounts up to 10% of its total assets (at the lower of
cost or market at the time of the borrowing), provided (i) that the total of
reverse repurchase agreements(2) and such borrowings will not exceed 10% of the
Fund's total assets and (ii) the Fund will not purchase securities when its
borrowings exceed 5% of total assets.
10. The Fund will not pledge any of its assets, except to secure
indebtedness permitted by the Fund's investment restrictions.
11. The Fund will not invest for the purpose of exercising control or
management of any company.
12. Not more than 25% of the value of the Fund's total assets, taken at
market value at the time of the investment, will be concentrated in companies of
any one industry.
13. The Fund will not purchase and sell commodities or commodity
contracts, except that it may enter into forward contracts to hedge securities
transactions made in foreign currencies.
In addition to the fundamental restrictions listed above, the 1940 Act
provides that the Fund may neither purchase more than 3% of the voting
securities of any one investment company nor invest more than 10% of the Fund's
assets (valued at time of investment) in all investment company securities
purchased by the Fund.
- --------------------
(1) The Fund does not currently intend to sell securities short even under
the conditions described in investment restriction 5.
(2) The Fund does not currently intend to enter into reverse repurchase
agreements.
<PAGE>
PERFORMANCE INFORMATION
From time to time the Fund may give information about its performance by
quoting total return figures in advertisements and sales literature. "Total
return" for a period is the percentage change in value of an investment in Fund
shares, including the value of shares acquired through reinvestment of all
dividends and capital gains distributions. "Average annual total return" is the
average annual compounded rate of change in value represented by the total
return for the period.
Average annual total return is computed as follows:
n
ERV = P(1+T)
Where: P = the amount of an assumed initial investment in Fund shares
T = average annual total return
n = number of years from initial investment to the end of the period
ERV = ending redeemable value of shares held at the end of the
period
The Fund's total returns for the one-and five-year periods ended June
30, 1996 and for the period November 10, 1988 (the date Fund shares were
first offered for sale to the public) through June 30, 1996 were 28.3%, 95.8%
and 202.1%, respectively. Average annual total return for the same periods was
28.3%, 14.4% and 15.6%, respectively.
The Fund imposes no sales charges and pays no distribution expenses.
Income taxes payable by shareholders are not taken into account. The Fund's
performance is a result of conditions in the securities markets, portfolio
management, and operating expenses. Although information such as that described
above may be useful in reviewing the Fund's past performance and in providing
some basis for comparison with other investment alternatives, it is not
necessarily indicative of future performance and should not be used for
comparison with other investments using different reinvestment assumptions or
time periods.
The Fund may also compare its performance to various stock indices (groups
of unmanaged common stocks), including the New York Stock Exchange Composite
Index, Standard & Poor's 500 Stock Index, the NASDAQ Composite Index, and the
Dow Jones Industrial Average, or to the Consumer Price Index or groups of
comparable mutual funds, including rankings determined by Lipper Analytical
Services, Inc., an independent service that monitors the performance of mutual
funds, or that of another independent service, including Morningstar, Inc.
The Fund may cite its rating, recognition, or other mention by Morningstar
or any other entity. Morningstar's rating system is based on risk-adjusted
total return performance and is expressed in a star-rating format. The risk-
adjusted number is computed by subtracting a fund's risk score (which is a
function of the fund's monthly returns less the 3-month T-bill return) from the
fund's load-adjusted total return score. This numerical score is then
translated into rating categories, with the top 10% labeled five star, the next
22.5% labeled four star, the next 35% labeled three star, the next 22.5% labeled
two star, and the bottom 10% one star. A high rating reflects either above-
average returns or below-average risk or both.
<PAGE>
INVESTMENT ADVISER
The Fund's investment adviser, Fasciano Company, Inc. (the "Adviser"),
furnishes continuing investment supervision to the Fund and is responsible for
overall management of the Fund's business affairs. It furnishes office space,
equipment, and personnel to the Fund and assumes the expenses of printing and
distributing the Fund's prospectus and reports to prospective investors. The
Fund pays all of its expenses except those specifically assumed by the Adviser,
including but not limited to printing and postage charges; securities
registration, custodian and transfer agency fees; accounting services fees (paid
to the Adviser); audit and legal fees; and expenses in connection with its
organization.
For its services, the Adviser receives a monthly fee at an annual rate of
1% of the average daily net asset value of the Fund. The Investment Advisory
Agreement provides that the Adviser will reimburse the Fund to the extent that
its total annual operating expenses exceed 2%, exclusive of (i) taxes, (ii)
interest charges, (iii) litigation and other extraordinary expenses, and (iv)
brokers' commissions and other charges relating to the purchase and sale of the
Fund's portfolio securities.
The investment advisory fees of the Fund for the fiscal years ended June
30, 1996, 1995, and 1994 were $247,479, $183,008, and $167,089, respectively.
During the fiscal years ended June 30, 1996 and 1995, the Fund operated within
all applicable expense limitations without reimbursement by the Adviser:
The Adviser is a registered investment adviser organized in November 1986.
Michael F. Fasciano is the sole shareholder of the Adviser.
<PAGE>
DIRECTORS AND OFFICERS
The directors and officers of the Fund and their principal business
activities during the past five years are:
Positions Held Principal Occupations
Name, Address and Age with Fund and other Affiliations
- --------------------- -------------- ----------------------
Michael F. Director, President Director, President
Fasciano and Treasurer and Treasurer of
Suite 2800 Fasciano Company, Inc.
190 South LaSalle St. since November 1986.
Chicago, Illinois Mr. Fasciano is a
60603 Chartered Financial
Age 41 Analyst.
Susan N. Fasciano Secretary and Private investor.
Suite 2800 Director
190 South LaSalle Street
Chicago, Illinois 60603
Age 38
David R. Long Director Vice President -
The Gallagher Center Investments of Arthur J.
Two Pierce Place Gallagher & Co., Inc., a
Itasca, Illinois 60143-3141 New York Stock Exchange
Age 44 listed international
insurance and risk
management services
firm, since May 1989.
Michael F. Fasciano and Susan N. Fasciano are directors who are "interested
persons" of the Fund as defined in the 1940 Act. Michael Fasciano and Susan
Fasciano are husband and wife.
Mr. Fasciano and Ms. Fasciano serve as members of the Executive Committee
of the Board of Directors. The Executive Committee, which meets between regular
meetings of the Board, is authorized to exercise all of the powers of the Board
of Directors. The Executive Committee did not meet during the fiscal year ended
June 30, 1996.
The only compensation paid to directors and officers of the Fund for their
services as such consists of $2,000 paid to directors who are not interested
persons of the Fund or the Adviser. The Fund has no retirement or pension
plans.
<PAGE>
The following table sets forth compensation paid by the Fund during the
fiscal year ended June 30, 1996 to each of the directors of the Fund. The
Fund is not part of a fund complex and has no retirement or other benefit plans
for directors.
AGGREGATE
COMPENSATION
NAME OF DIRECTOR FROM THE FUND
---------------- -------------
Michael F. Fasciano $ 0
Susan N. Fasciano 0
David R. Long 500
At September 30, 1996 the directors and officers as a group owned
beneficially 28,104 shares, or 2.3% of the outstanding shares of the Fund.
CERTAIN SHAREHOLDERS
As of September 30, 1996, the only persons known by the Fund to own
beneficially 5% or more of the outstanding shares of the Fund were:
Outstanding Shares Owned
------------------------
Number Percent
------ -------
Albert O. Nicholas 253,157 21.1%
6002 North Highway 83
Hartland, Wisconsin 53209
Nancy J. Nicholas 289,693 24.1%
6002 North Highway 83
Hartland, Wisconsin 53209
Firwood 80,924 6.7%
c/o Amcore Trust Co.
P. O. Box 4599
Rockford, Illinois 61110
PURCHASING AND REDEEMING SHARES
Purchases and redemptions are discussed in the Fund's prospectus under the
headings "Purchasing Shares," "Redeeming Shares" and "Net Asset Value." All of
that information is incorporated herein by reference.
For purposes of computing the net asset value of a share of the Fund,
securities traded on securities exchanges, or in the over-the-counter market in
which transaction prices are reported, are valued at the last sales prices at
the time of valuation or lacking any reported sales on that
<PAGE>
day, at the most recent bid quotations. Other securities traded
over-the-counter are also valued at the most recent bid quotations.
Securities for which quotations are not available and any other assets are
valued at a fair value as determined in good faith by the board of directors.
Money market instruments having a maturity of 60 days or less from the
valuation date are valued on an amortized cost basis. Calculations of net
asset value are performed by Firstar Trust Company, the Fund's custodian.
The Fund's net asset value will not be determined on any day on which the
New York Stock Exchange is not open for trading. That Exchange is regularly
closed on Saturdays and Sundays and on New Year's Day, the third Monday in
February, Good Friday, the last Monday in May, Independence Day, Labor Day,
Thanksgiving, and Christmas. If one of these holidays falls on a Saturday or
Sunday, the Exchange will be closed on the preceding Friday or the following
Monday, respectively.
The Fund has elected to be governed by Rule 18f-1 under the 1940 Act,
pursuant to which it is obligated to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the net asset value of the Fund during any 90-day
period for any one shareholder. Redemptions in excess of the above amounts will
normally be paid in cash, but may be paid wholly or partly by a distribution in
kind of securities.
Because it can be more expensive for the Fund to maintain small accounts,
the Fund has reserved the right, on 60 days' written notice to the shareholder,
to redeem shares in any account and send the proceeds to the owner, if the
account has a value of less than a stated minimum. It is the Fund's current
policy not to exercise its right to redeem small accounts. No change in that
policy would be implemented without advance notice having been given to
shareholders.
ADDITIONAL TAX INFORMATION
The Fund intends to continue to qualify, as it has done since it first
offered its shares to the public, as a regulated investment company under
Subchapter M of the Internal Revenue Code and thus not be subject to federal
income taxes on amounts it distributes to shareholders.
The Fund was a personal holding company under the Code for the fiscal
year ended June 30, 1996 because more than 50% of its outstanding stock was
owned by five or fewer individuals. The Fund will continue to be a personal
holding company under the Code until that concentration of stock ownership no
longer exists. As a personal holding company, the Fund is subject to federal
income tax at the maximum rate on its income not currently distributed to
shareholders. Because the Fund intends to distribute all its net investment
income (if any) and realized capital gains, the Fund does not expect its
classification as a personal holding company to result in the imposition of
any tax.
PORTFOLIO TRANSACTIONS
The Adviser has discretion to select brokers and dealers to execute
portfolio transactions initiated by the Adviser and to select the markets in
which such transactions are to be executed. The primary responsibility regarding
portfolio transactions is to seek the best combination of net
<PAGE>
price and execution for the Fund. When executing transactions for the Fund,
the Adviser will consider all factors it deems relevant, including the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer and the
reasonableness of the commission. Transactions of the Fund in the
over-the-counter market are executed with primary market makers acting as
principal except where it is believed that better prices and execution may be
obtained otherwise.
In selecting brokers or dealers to execute particular transactions and in
evaluating the best net price and execution available, the Adviser is authorized
to consider "brokerage and research services" (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934), statistical quotations,
specifically the quotations necessary to determine the Fund's asset value, and
other information provided to the Fund or the Adviser. The Adviser is also
authorized to cause the Fund to pay a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction. The Adviser must
determine in good faith, however, that such commission was reasonable in
relation to the value of the brokerage and research services provided, viewed in
terms of that particular transaction or in terms of all the accounts over which
the Adviser exercises investment discretion. It is possible that certain of the
services received by the Adviser attributable to a particular transaction will
benefit one or more other accounts for which investment discretion is exercised
by the Adviser.
In valuing research services, the Adviser makes a judgment of the
usefulness of research and other information provided by a broker to the Adviser
in managing the Fund's investment portfolio. In some cases, the information,
E.G., data or recommendations concerning particular securities, relates to the
specific transaction placed with the broker, but for the greater part the
research consists of a wide variety of information concerning companies,
industries, investment strategy, and economic, financial and political
conditions and prospects, useful to the Adviser in advising the Fund.
The Adviser is the principal source of information and advice to the Fund
and is responsible for making and initiating the execution of investment
decisions by the Fund. However, the board of directors of the Fund recognizes
that it is important for the Adviser, in performing its responsibilities to the
Fund, to continue to receive and evaluate the broad spectrum of economic and
financial information that many securities brokers have customarily furnished in
connection with brokerage transactions, and that in compensating brokers for
their services, it is in the interest of the Fund to take into account the value
of the information received for use in advising the Fund. The extent, if any,
to which the obtaining of such information may reduce the expenses of the
Adviser in providing management services to the Fund is not determinable. In
addition, it is understood by the board of directors that other clients of the
Adviser might also benefit from the information obtained for the Fund, in the
same manner that the Fund might also benefit from the information obtained by
the Adviser in performing services for others.
For the fiscal years ended June 30, 1996, 1995, and 1994, the Fund paid
brokerage commissions, not including the gross underwriting spread on securities
purchased in underwritten public offerings, aggregating $18,363, $13,160, and
$22,496, respectively.
<PAGE>
Although investment decisions for the Fund would be made independently
from those for other investment advisory clients of the Adviser, if any, it
might develop that the same investment decision is made for both the Fund and
one or more other advisory clients. If both the Fund and other clients purchase
or sell the same class of securities on the same day, the transactions will be
allocated as to amount and price in a manner considered equitable to each.
ADMINISTRATOR, CUSTODIAN AND TRANSFER AGENT
ADMINISTRATOR. Firstar Trust Company, 615 East Michigan Street,
Milwaukee, Wisconsin 53202 (the "Administrator") will serve as the Fund's
Administrator beginning January 1, 1997. Firstar is not an affiliate of the
Adviser or its affiliates. The Fund Administration Servicing Agreement entered
into between the Fund and the Administrator relating to the Fund (the
"Administration Agreement") will remain in effect until terminated by either
party. The Administration Agreement may be terminated at any time, without the
payment of any penalty, by the board of directors of the Fund upon the giving of
ninety (90) days' written notice to the Administrator, or by the Administrator
upon the giving of ninety (90) days' written notice to the Fund.
Under the Administration Agreement, the Administrator shall exercise
reasonable care and is not liable for any error or judgment or mistake of law or
for any loss suffered by the Corporation in connection with the performance of
the Administration Agreement, except a loss resulting from willful misfeasance,
bad faith or negligence on the part of the Administrator in the performance of
its duties under the Administration Agreement.
The Fund will pay the Administrator a monthly fee at the annual rates of
0.06% of the Fund's average daily net assets up to $200 million, 0.05% of the
next $500 million of average daily net assets, and 0.03% of average daily net
assets in excess of $700 million, subject to the minimum annual fees described
in the next sentence. No minimum fee applies to the period January 1 through
June 30, 1997. For the fiscal year ending June 30, 1998, the minimum annual fee
will be $24,000, and for the fiscal year ending June 30, 1999, the minimum
annual fee will be $27,000; provided that the minimum annual fee will rise to
$30,000 at the earlier of (i) the time the assets of the Fund reach $50 million
and (ii) July 1, 1999.
CUSTODIAN AND FUND ACCOUNTING AGENT. Firstar Trust Company ("Firstar"),
P.O. Box 701, Milwaukee, Wisconsin 53201, acts as Custodian of the securities
and other assets of the Fund. As Custodian, Firstar is responsible for, among
other things, safeguarding and controlling the Fund's cash and securities,
handling the receipt and delivery of securities, and collecting interest and
dividends on the Fund's investments. Firstar also performs portfolio accounting
services for the Fund.
In addition the Fund has entered into a Fund Accounting Servicing Agreement
with Firstar Trust Company pursuant to which Firstar Trust Company has agreed to
maintain the financial accounts and records of the Fund and provide other
accounting services to the Fund.
TRANSFER AGENT. Firstar Trust Company also serves as transfer agent and
dividend disbursing agent for the Fund under a Shareholder Servicing Agent
Agreement. As transfer and
<PAGE>
dividend disbursing agent, Firstar Trust Company has agreed to (i) issue and
redeem shares of the Fund, (ii) make dividend and other distributions to
shareholders of the Fund, (iii) respond to correspondence by Fund
shareholders and others relating to its duties, (iv) maintain shareholder
accounts, and (v) make periodic reports to the Fund.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP, 33 West Monroe Street, Chicago, Illinois 60603, audits
and reports on the Fund's annual financial statements, reviews certain
regulatory reports, prepares the Fund's income tax returns, and performs other
professional accounting, auditing, tax, and advisory services when engaged to do
so by the Fund.
FINANCIAL STATEMENTS
The Fund's annual report for its fiscal year ended June 30, 1996, a copy
of which accompanies this statement of additional information, contains
financial statements, notes thereto and a report of independent public
accountants, all of which (but no other part of the annual report) is
incorporated herein by reference.
Additional copies of the annual report may be obtained without charge by
writing or telephoning the Fund at the address or telephone number shown on the
front cover of this statement of additional information.
<PAGE>
APPENDIX
DESCRIPTION OF BOND RATINGS
A rating of a rating service represents the service's opinion as to the credit
quality of the security being rated. However, the ratings are general and are
not absolute standards of quality or guarantees as to the creditworthiness of an
issuer. Consequently, the Fund's investment adviser believes that the quality of
debt securities in which the Fund invests should be continuously reviewed and
that individual analysts give different weightings to the various factors
involved in credit analysis. A rating is not a recommendation to purchase, sell
or hold a security, because it does not take into account market value or
suitability for a particular investor. When a security has received a rating
from more than one service, each rating should be evaluated independently.
Ratings are based on current information furnished by the issuer or obtained by
the ratings services from other sources which they consider reliable. Ratings
may be changed, suspended or withdrawn as a result of changes in or
unavailability of such information, or for other reasons.
The following is a description of the characteristics of rating used by Moody's
Investors Service, Inc. ("Moody's") and Standard & Poor's Corporation ("S&P").
Ratings by Moody's
Aaa--Bonds rated Aaa are judged to be the best quality. They carry the smallest
degree of investment risk and are generally referred to as "gilt-edge".
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. Although 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 bonds.
Aa--Bonds rated Aa are judged to be 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 bonds or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the long
term risk appear somewhat larger than in Aaa bonds.
A--Bonds rated A possess many favorable investment attributes and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa--Bonds rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba--Bonds rated Ba are judged to have speculative elements; their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and
<PAGE>
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B--Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.
Caa--Bonds rated Caa are of poor standing. Such bonds may be in default or
there may be present elements of danger with respect to principal or interest.
Ca--Bonds rated Ca represent obligations which are speculative in a high
degree. Such bonds are often in default or have other marked shortcomings.
S&P Ratings
AAA--Bonds rated AAA have the highest rating. Capacity to pay principal and
interest is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay principal and interest and
differ from AAA bonds only in small degree.
A--Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay principal and interest for bonds in this capacity
than for bonds in higher rated categories.
BB--B--CCC--CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation among such bonds and CC the highest
degree of speculation. Although such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
<PAGE>
- ------------------ COMPARISON OF FOOTNOTES -------------------FOOTNOTE 1-1
Incorporated by reference to the exhibit of the same number filed with pre-
effective amendment No. 2 to registrant's registration statement on form N-1A,
No. 33-23997 (the "Registration Statement").2 Incorporatedby reference to the
exhibit of the same number filed with the Registration Statement ^.3.
Incorporated by reference to the exhibit of the same number filed with post-
effective amendment no. 2 to the Registration Statement.4. Incorporated by
reference to the exhibit of the same number filed with post-effective amendment
no. 6 to the Registration Statement ^.36311D1.DOC October 29, 1996 5:25
PM36311D1.DOC October 29, 1996 5:25 PM36311D4.DOC C-C-
<PAGE>
PART C OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS:
(i) Financial statements included in Part A of
this registration statement: Financial Highlights.
(ii) Financial statements included in Part B of
this registration statement -- incorporated by reference to
the following portions of Registrant's annual report to
Shareholders for the fiscal year ended June 30, 1996:
- Report of independent public accountants
- Schedule of Portfolio Investments at June 30, 1996
- Statement of Assets and Liabilities at June 30, 1996
- Statement of Operations for the year ended June 30, 1996
- Statement of Changes in Net Assets for the years ended
June 30, 1996 and 1995
- Financial Highlights
- Notes to financial statements
(iii) Financial statements included in Part C of
this amendment: none
Note: - Schedule I - the required information is presented in the
Schedule of Portfolio Investments at June 30, 1996
- Schedules II, III, IV, and V have been omitted as the
required information is not present.
(b) Exhibits:
No. EDGAR Exhibit
1 Ex 99.B1 Restated articles of incorporation
2 Ex 99.B2 Bylaws
3 Ex 99.B3 None
4 Ex 99.B4 Form of common stock certificate(1)
5 Ex 99.B5 Investment advisory agreement with Fasciano Company,
Inc.
6 Ex 99.B6 None
- ---------------
(1) Incorporated by reference to the exhibit of the same number filed with pre-
effective amendment No. 2 to registrant's registration statement on form N-
1A, No. 33-23997 (the "Registration Statement").
<PAGE>
No. EDGAR Exhibit
- --- ----- -------
7 Ex 99.B7 None
8 Ex 99.B8 Custody agreement with Firstar Trust Company
(formerly First Wisconsin Trust Company)
9 Ex 99.B9A Shareholder servicing agreement with Firstar Trust
Company (formerly First Wisconsin Trust Company)4
9.1 Ex 99.B9B Accounting Services Agreement with Firstar Trust
Company
10 Ex 99.B10 Opinion of Bell, Boyd & Lloyd dated November 3,
1988
11 Ex 99.B11 Consent of independent public accountants
12 Ex 99.B12 None
13.1 Ex 99.B13A Initial 1987 Subscription Agreement for
Individuals(2)
13.2 Ex 99.B13B Initial 1987 Subscription Agreement for
Corporations,(2) Trusts and Partnerships
13.3 Ex 99.B13C Initial 1988 Subscription Agreement(2)
13.4 Ex 99.B13D Second 1988 Subscription Agreement(2)
13.5 Ex 99.B13E Third 1988 form of Subscription Agreement(2)
14 Ex 99.B14 Individual Retirement Account Prototype Plan,
Disclosure Statement and applications(2)
15 Ex 99.B15 None
16 Ex 99.B16 Schedule for computation of performance
quotations(3)
Ex 27 Financial Data Schedule
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The registrant does not consider that there are any persons directly
or indirectly controlling, controlled by, or under common control with, the
registrant within the meaning of this item. The information in the prospectus
under the caption "Management of the Fund" and in the Statement of Additional
Information under the caption "Management" is incorporated by reference.
- ---------------
(2) Incorporated by reference to the exhibit of the same number filed with the
Registration Statement.
(3) Incorporated by reference to the exhibit of the same number filed with
post-effective amendment no. 2 to the Registration Statement.
(4) Incorporated by reference to the exhibit of the same number filed with
post-effective amendment no. 6 to the Registration Statement.
<PAGE>
Item 26. NUMBER OF HOLDERS OF SECURITIES
As of September 30, 1996 there were 1,111 record holders of
registrant's capital stock. Registrant has no other class of securities.
Item 27. INDEMNIFICATION
Section 2-418 of the General Corporation Law of Maryland authorizes
the registrant to indemnify its directors and officers under specified
circumstances. Article Ninth of the Charter of the registrant (exhibit 1 to
this amendment, which is incorporated herein by reference) provides in effect
that the registrant shall provide certain indemnification of its directors and
officers. In accordance with section 17(h) of the Investment Company Act, this
provision of the charter shall not protect any person against any liability to
the registrant or its shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, 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 trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, 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
The information in the prospectus under the caption "Management of the
Fund - Directors and Investment Adviser" is incorporated by reference. Except
as noted therein, neither Fasciano Company, Inc., nor any of its directors or
officers, has at any time during the past two years been engaged in any other
business, profession, vocation or employment of a substantial nature either for
its or his own account or in the capacity of director, officer, employee,
partner or trustee.
Item 29. PRINCIPAL UNDERWRITERS
(a) None
(b) None
(c) None
Item 30. LOCATION OF ACCOUNTS AND RECORDS
Michael F. Fasciano
President
Fasciano Fund, Inc.
190 S. LaSalle St., Suite 2800
Chicago, Illinois 60603
<PAGE>
Item 31. MANAGEMENT SERVICES
None
Item 32. UNDERTAKINGS
(a) Not applicable
(b) Not applicable
(c) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<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
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Chicago, Illinois on October 31, 1996.
FASCIANO FUND, INC.
By /s/ Michael F. Fasciano
-----------------------
Michael F. Fasciano, President
Pursuant to the requirements of the Securities Act of 1933, this
amendment to the registration statement has been signed below by the following
persons in the capacities and on the dates indicated.
Name Title Date
---- ----- ----
/s/ Michael F. Fasciano Director, President and )
- ----------------------- Treasurer (principal )
Michael F. Fasciano executive and )
financial officer) )
)
)
/s/ David R. Long Director ) October 31, 1996
- ----------------------- )
David R. Long )
)
)
)
/s/ Susan N. Fasciano Director )
- -----------------------
Susan N. Fasciano )
)
)
)
<PAGE>
FASCIANO FUND, INC.
- ---------------------------------------------------------
- ---------------------------------------------------------
August 22, 1996
Dear Shareholder:
The good times are still rolling along. Total return figures
for periods ended June 30, 1996 are summarized below.
<TABLE>
<CAPTION>
Six Months One Year Three Years** Five Years**
-------------- ------------ ---------------- ---------------
<S> <C> <C> <C> <C>
Fasciano Fund* 14.9% 28.3% 18.1% 14.4%
Small Company Fund Average+ 14.9% 29.3% 17.4% 18.1%
S&P 500 Index 10.1% 26.0% 17.2% 15.7%
</TABLE>
For the period since November 10, 1988 (the date Fasciano Fund
share were initially offered for sale to the public) through June
30, 1996, the average annual total return for Fasciano Fund was
15.6%.
Fasciano Fund ranks high, particularly when returns are
adjusted for its lower risk profile. We strike a conservative
balance between risk and reward because making money in an up
market is one thing, but keeping it in a down market is another.
Going forward, we are positioned for long-term capital growth.
The fund is fully invested in stocks and our portfolio comprises
both solid growth and good value. When we invest, we always look
for growth because hefty capital gains can be made by investing in
small businesses that grow larger. Also, value is important
because it cushions market volatility and enhances long-term
returns. To determine value, we weigh businesses against each
other in terms of their earnings growth rates and price-
to-earnings ratios. We remain committed to buying growing
businesses at good prices.
Thank you for selecting Fasciano Fund to achieve your
long-term financial goals.
Sincerely,
[MICHAEL F. FASCIANO SIGNATURE]
Michael F. Fasciano, CFA
President
* Of course, past performance is no guarantee of future results.
The principal value and return on your investment will
fluctuate and upon redemption may be worth more than your
original cost.
** Average annual total return
+ Source: Morningstar, Inc.
190 South LaSalle Street, Suite 2800, Chicago, Illinois 60603 - 800-848-6050
[FASCIANO LOGO]
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<PAGE>
PERFORMANCE AND DISTRIBUTION SUMMARY
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
<TABLE>
<CAPTION>
FASCIANO FUND
--------------------------------------------------------------
Distributions
------------------------ Annual Small U.S.
Calendar Beginning Capital Total Company Treasury
Year NAV Income Gains Ending NAV Return S&P 500 Funds* Bills
- ----------- ----------- ----------- ----------- ----------- ---------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1989 $ 11.45 $ 0.24 $ 0.59 $ 13.16 +22.5% +31.7% +23.6% +8.1%
1990 $ 13.16 $ 0.12 $ 0.38 $ 12.50 - 1.2% - 3.1% - 9.5% +7.5%
1991 $ 12.50 $ 0.02 $ 0.36 $ 16.40 +35.1% +30.5% +50.3% +5.4%
1992 $ 16.40 $ 0.00 $ 0.46 $ 17.29 + 7.7% + 7.6% +13.7% +3.5%
1993 $ 17.29 $ 0.00 $ 1.00 $ 17.68 + 8.1% +10.1% +17.1% +3.0%
1994 $ 17.68 $ 0.00 $ 1.14 $ 17.18 + 3.7% + 1.3% - 0.7% +4.3%
1995 $ 17.18 $ 0.00 $ 1.34 $ 21.18 +31.1% +37.5% +31.3% +5.5%
*Source: Morningstar, Inc.
</TABLE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FASCIANO FUND VS. S&P 500
<S> <C> <C>
Fasciano S&P 500
11/10/1988 10,000 10,000
6/30/1989 11,942 11,880
6/30/1990 13,483 13,839
6/30/1991 15,478 14,863
6/30/1992 16,484 16,558
6/30/1993 18,429 19,152
6/30/1994 19,039 19,420
6/30/1995 23,951 24,822
6/30/1996 30,729 31,271
Fasciano Fund
Average Annual Total Returns
1 Year 5 Years Life*
28.3% 14.4% 15.6%
</TABLE>
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<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS
June 30, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Common Stocks Market Value
<C> <S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 97.1%
INDUSTRIAL & COMMERCIAL PRODUCTS AND SERVICES - 27.3%
45,000 Concord EFS, Inc. +......................................................................................... $ 1,597,500
40,000 Keane, Inc. +............................................................................................... 1,475,000
33,000 Methode Electronics, Inc. - Class A......................................................................... 561,000
10,000 FlightSafety International.................................................................................. 542,500
42,500 Richey Electronics, Inc. +.................................................................................. 499,375
20,000 ABC Rail Products Corp. +................................................................................... 432,500
10,000 Interim Services, Inc. +.................................................................................... 430,000
15,000 G&K Services - Class A...................................................................................... 427,500
10,000 IDEX Corp. ................................................................................................. 380,000
20,000 Juno Lighting, Inc. ........................................................................................ 340,000
10,000 Envoy Corporation +......................................................................................... 292,500
10,000 Modine Manufacturing Co. ................................................................................... 265,000
10,000 Trimas Corp. ............................................................................................... 233,750
11,800 Lawter International, Inc. ................................................................................. 147,500
10,000 Arnold Industries, Inc. .................................................................................... 142,500
10,000 Communications Systems, Inc. ............................................................................... 137,500
FINANCIAL SERVICES - 19.6%
75,000 Imperial Thrift & Loan +.................................................................................... 1,106,250
75,000 Mercury Finance Company..................................................................................... 956,250
30,000 Cole Taylor Financial Group................................................................................. 892,500
20,000 Greenpoint Financial Corp. ................................................................................. 565,000
20,000 Liberty Bancorp, Inc. ...................................................................................... 500,000
10,000 Corus Bankshares, Inc. ..................................................................................... 300,000
10,000 First Financial Corp. - Wisc. .............................................................................. 225,000
6,250 Advantage Bancorp., Inc. ................................................................................... 212,500
30,000 Atlantic Bank & Trust Co. +................................................................................. 202,500
7,500 First Merchants Acceptance +................................................................................ 148,125
5,000 Southwest Bancshares, Inc. ................................................................................. 135,000
10,000 Damen Financial Corp. +..................................................................................... 116,250
16,000 BankUnited Financial Corp. +................................................................................ 116,000
10,000 GA Financial, Inc. +........................................................................................ 110,000
5,000 Heritage Financial Services................................................................................. 108,750
HEALTH CARE PRODUCTS AND SERVICES - 17.7%
45,000 VIVRA, Inc. +............................................................................................... 1,479,375
20,000 Cardinal Health, Inc. ...................................................................................... 1,442,500
20,000 Dentsply International, Inc. ............................................................................... 850,000
20,000 Serologicals Corp. +........................................................................................ 530,000
20,000 Landauer, Inc. ............................................................................................. 422,500
10,000 Medaphis Corp. +............................................................................................ 397,500
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
[FASCIANO LOGO]
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<PAGE>
SCHEDULE OF PORTFOLIO INVESTMENTS -- Continued
June 30, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Common Stocks Market Value
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS - 97.1% - Continued
ENTERTAINMENT - 11.4%
6,500 International Speedway Corp. ............................................................................... 1,722,500
33,750 Regal Cinemas, Inc. +....................................................................................... 1,544,063
2,000 Speedway Motorsports, Inc. +................................................................................ 51,250
CONSUMER PRODUCTS AND SERVICES - 9.6%
35,000 Central Parking Corp. ...................................................................................... 1,036,875
75,000 TBC Corp. +................................................................................................. 646,875
50,000 Ladd Furniture, Inc. ....................................................................................... 500,000
20,000 International Dairy Queen, Inc. +........................................................................... 440,000
15,000 LaCrosse Footware, Inc. .................................................................................... 155,625
20,000 Programming & Systems +..................................................................................... 10,000
PUBLISHING AND BROADCASTING - 6.0%
10,000 Pulitzer Publishing Co. .................................................................................... 592,500
15,000 McClatchy Newspapers - Class A.............................................................................. 414,375
20,000 Nelson Thomas, Inc. ........................................................................................ 267,500
10,000 BET Holdings - Class A +.................................................................................... 263,750
5,000 Central Newspaper, Inc. .................................................................................... 187,500
TECHNOLOGY - 5.5%
30,000 Zebra Technologies Corp. - Class A +........................................................................ 532,500
10,000 Tessco Technologies, Inc. +................................................................................. 365,000
5,000 CDW Computer Centers, Inc. +................................................................................ 347,500
10,000 GTECH Holdings Corp. +...................................................................................... 296,250
8,000 Eagle Point Software Corp. +................................................................................ 56,000
------------
TOTAL COMMON STOCKS (cost: $18,386,410)..................................................................... 28,150,188
------------
SHORT-TERM INVESTMENTS - 3.0%
Variable Demand Notes (all due July 1, 1996)
855,757 Wisconsin Electric, 5.19%................................................................................... 855,757
------------
TOTAL SHORT-TERM INVESTMENTS (cost: $855,757)............................................................... 855,757
------------
TOTAL INVESTMENTS - 100.1% (cost: $19,242,167).............................................................. 29,005,945
OTHER LIABILITIES, NET OF OTHER ASSETS - (0.1%)............................................................. (25,403)
------------
TOTAL NET ASSETS - 100.0%................................................................................... $28,980,542
------------
------------
</TABLE>
+ non-income producing security
The accompanying notes to financial statements are an integral part of this
statement.
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<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Common stocks, at market value (cost: $18,386,410).............. $28,150,188
Variable demand notes, at market value (cost: $855,757)......... 855,757
Receivables
Dividends..................................................... 17,675
Interest...................................................... 6,996
Prepaid expenses................................................ 2,387
Other assets.................................................... 4,646
-----------
Total assets.............................................. $29,037,649
-----------
-----------
LIABILITIES AND NET ASSETS
Payables and accrued expenses
Accrued expenses.............................................. $ 33,000
Due to adviser................................................ 24,107
-----------
Total liabilities......................................... 57,107
-----------
Net assets
Common stock, $.01 par value; 10,000,000 shares authorized,
1,191,150 shares issued and outstanding, and paid-in
capital...................................................... 18,584,520
Accumulated net investment loss............................... (251,264)
Accumulated undistributed net realized gain................... 883,508
Net unrealized appreciation on investments.................... 9,763,778
-----------
Total net assets.......................................... 28,980,542
-----------
Total liabilities and net assets.......................... $29,037,649
-----------
-----------
Net asset value per share....................................... $ 24.33
-----------
-----------
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
[FASCIANO LOGO]
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<PAGE>
STATEMENT OF OPERATIONS
For the year ended June 30, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INCOME
Dividends.............................................................. $ 171,395
Interest............................................................... 125,284
Other.................................................................. 67
----------
296,746
----------
EXPENSES
Management fee......................................................... 247,479
Registration fees...................................................... 25,470
Transfer and disbursing agent fees..................................... 24,929
Accounting fee......................................................... 22,286
Audit and tax consulting fees.......................................... 17,550
Printing............................................................... 16,627
Custodian fees......................................................... 9,494
Legal fees............................................................. 9,178
Other operating expenses............................................... 3,039
----------
Total expenses..................................................... 376,052
----------
Net investment loss.................................................... (79,306)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments....................................... 2,013,802
Net change in unrealized appreciation.................................. 4,232,542
----------
Net gain on investments............................................ 6,246,344
----------
Net increase in net assets resulting from operations............... $6,167,038
----------
----------
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
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<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the years ended June 30, 1996 and June 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, June 30,
1996 1995
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment loss........................................ $ (79,306) $ (102,096)
Net realized gain on investments........................... 2,013,802 306,720
Net change in unrealized appreciation...................... 4,232,542 3,862,713
----------- -----------
Net increase in net assets resulting from operations..... 6,167,038 4,067,337
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income................... 0 0
Distributions from net realized gains...................... (1,454,764) (1,106,005)
----------- -----------
Total distributions...................................... (1,454,764) (1,106,005)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued (153,853 and 140,163 shares,
respectively)............................................. 3,463,138 2,563,890
Increase from shares issued in reinvested distributions
(66,035 and 62,566 shares, respectively).................. 1,391,353 1,064,993
Cost of shares redeemed (63,325 and 124,560 shares,
respectively)............................................. (1,453,876) (2,304,528)
----------- -----------
Net increase in net assets derived from capital share
transactions............................................ 3,400,615 1,324,355
----------- -----------
Net increase in net assets............................... 8,112,889 4,285,687
----------- -----------
NET ASSETS AT BEGINNING OF PERIOD............................ 20,867,653 16,581,966
----------- -----------
NET ASSETS AT END OF YEAR (including accumulated
undistributed net investment loss of ($251,264) and
($171,958), respectively)................................... $28,980,542 $20,867,653
----------- -----------
----------- -----------
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
[FASCIANO LOGO]
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<PAGE>
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
Condensed financial information per share of capital stock
outstanding throughout the period is presented below:
<TABLE>
<CAPTION>
Year Ended June 30,
--------------------------------------------------------
1996 1995 1994 1993 1992
------------ -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value at beginning of year.......................... $ 20.17 $ 17.34 $ 17.74 $ 16.30 $ 15.67
Income from investment operations:
Net investment income (loss)................................ (0.05) (0.24) (0.05) (0.05) 0.03
Net realized and unrealized gain on securities.............. 5.55 4.21 0.65 1.95 0.99
------------ -------- -------- -------- --------
Total from investment operations.......................... 5.50 3.97 0.60 1.90 1.02
Less distribution:
Dividends from net investment income........................ 0.00 0.00 0.00 0.00 (0.02)
Distributions from realized gains on securities............. (1.34) (1.14) (1.00) (0.46) (0.36)
Provision for Federal income tax on realized gains.......... 0.00 0.00 0.00 0.00 (0.01)
------------ -------- -------- -------- --------
Total distributions and taxes............................. (1.34) (1.14) (1.00) (0.46) (0.39)
------------ -------- -------- -------- --------
Net asset value at end of year................................ $ 24.33 $ 20.17 $ 17.34 $ 17.74 $ 16.30
------------ -------- -------- -------- --------
------------ -------- -------- -------- --------
Total return.................................................. 28.3% 24.1% 3.3% 11.8% 6.5%
Ratios/Supplemental Data:
Net assets at end of period (in thousands).................. $28,981 $20,868 $16,582 $15,458 $10,564
Expenses, excluding provision for taxes, to average net
assets..................................................... 1.5% 1.7% 1.7% 1.7% 1.7%
Net investment income (loss) before taxes to average net
assets..................................................... (0.3)% (0.6)% (0.3)% (0.3)% 0.2%
Portfolio turnover rate..................................... 45.6% 37.9% 99.0% 43.2% 29.0%
</TABLE>
[FASCIANO LOGO]
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<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES:
Fasciano Fund, Inc. ("Fund"), a Maryland corporation, commenced operations on
August 1, 1987 as a private investment company. On June 30, 1988, the Fund
registered with the Securities and Exchange Commission as a diversified open-end
management investment company under the Investment Company Act of 1940 and began
offering its shares to the public on November 10, 1988. The primary objective of
the Fund is long-term capital growth.
The fiscal year end of the Fund is June 30. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements in accordance with generally accepted accounting
principles.
(a) Securities transactions are recorded on a trade date basis. The cost of
securities, determined on the specific identification method, is used to
determine realized gain or loss from sales of securities.
(b) Each security traded on a national securities exchange or traded over the
counter and quoted on the NASDAQ System will be valued at the last sale price on
the day of valuation. Securities for which there was no sale on the day of
valuation will be valued at the current bid prices. Each money market instrument
having a maturity of 60 days or less from the valuation date is valued on an
amortized cost basis, which approximates market value. Other assets and
securities will be valued at a fair value, as determined in good faith by the
Board of Directors.
(c) Dividends are recognized as income on the ex-dividend date. Interest
income and operating expenses are recorded on the accrual basis.
(d) The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
(2) RELATED PARTIES:
Michael F. Fasciano is an officer and director of the Fund and also an
officer, director and sole shareholder of the investment adviser, Fasciano
Company, Inc. Mr. Fasciano held 12,130 shares or 1.0% of the outstanding common
stock of the Fund at June 30, 1996.
The non-affiliated director receives a fee of $500 annually.
The management fee was paid to Fasciano Company, Inc. for its services as
investment adviser. This fee is paid monthly at the rate of 1/12 of 1% (an
annual rate of 1.0%) of the average daily net asset value of the Fund.
Total annual operating expenses of the Fund shall not exceed 2% of average net
assets, and the adviser agrees to pay any excess operating expenses or to
reimburse the Fund for any sums expended for such expenses in excess of that
amount. For this purpose, brokers' commissions and other charges relative to the
purchase and sale of portfolio securities, interest charges, taxes and
litigation and other extraordinary expenses shall not be regarded as operating
expenses.
(3) INVESTMENTS:
During the year ended June 30, 1996, purchases of securities other than
short-term investments were $12,149,623. Sales of such securities for that
period were $10,353,188.
Cost of investments is the same for financial reporting purposes as for
Federal income tax purposes. At June 30, 1996, on a tax basis, gross unrealized
appreciation of investments was $10,572,200 and unrealized depreciation of
investments was $808,422.
On June 18, 1992, the Securities and Exchange Commission suspended trading in
the common stock of Programming and Systems, Inc. because it had received
information questioning the accuracy of the Programming and Systems, Inc.
financial statements. To date, this matter has not been resolved. The shares
held by the Fund are valued at a fair value, as determined by the Board of
Directors.
(4) INCOME TAXES:
As a "regulated investment company," the Fund is relieved of income tax
liability to the extent it distributes its net investment income and capital
gains currently to its shareholders.
(5) DISTRIBUTIONS TO SHAREHOLDERS:
On December 28, 1995, the Fund distributed short-term and long-term capital
gains of approximately $0.08 and $1.26 per share, respectively.
[FASCIANO LOGO]
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
To the Shareholders and
Board of Directors of
Fasciano Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
FASCIANO FUND, INC. (a Maryland corporation), including the schedule of
portfolio investments, as of June 30, 1996, and the related statements of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1996, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Fasciano Fund, Inc. as of June 30, 1996, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois
August 19, 1996
[FASCIANO LOGO]
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<PAGE>
ANNUAL REPORT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Fasciano Company, Inc.
ADDRESS OF FUND & ADVISER
190 South LaSalle Street
Suite 2800
Chicago, Illinois 60603
(312) 444-6050
(800) 848-6050
TRANSFER AGENT, DIVIDEND
DISBURSING AGENT AND CUSTODIAN
Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201
(414) 765-4124
(800) 338-1579
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
Chicago, Illinois
LEGAL COUNSEL
Bell, Boyd & Lloyd
Chicago, Illinois
This report is submitted for the information
of shareholders of the Fund. It is not
authorized for distribution to prospective
investors unless preceded or accompanied
by an effective prospectus.
<TABLE>
<S> <C>
MEMBER OF
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NO-LOAD-TM-
MUTUAL FUND
100% COUNCIL
- -----------------------------------
- -----------------------------------
</TABLE>
[RECYCLED SYMBOL -- PRINTED ON RECYCLED PAPER]
FASCIANO FUND, INC.
[LOGO]
JUNE 30, 1996
<PAGE>
INDEX OF EXHIBITS FILED WITH THIS AMENDMENT
Exhibit
Number EDGAR Exhibit
1 Ex 99.B1 Restated articles of incorporation
2 Ex 99.B2 Bylaws
5 Ex 99.B5 Investment advisory agreement with Fasciano Company,
Inc.
8 Ex 99.B8 Custody agreement with Firstar Trust Company
(formerly First Wisconsin Trust Company)
9 Ex 99.B9A Shareholder servicing agreement with Firstar Trust
Company (formerly First Wisconsin Trust Company)
10 Ex 99.B10 Opinion of Bell, Boyd & Lloyd dated November 3, 1988
11 Ex 99.B11 Consent of independent public accountants
Ex 27 Financial Data Schedule
<PAGE>
Exhibit 1/99.B1
FASCIANO FUND, INC.
Amended and Restated Articles of Incorporation
FIRST. NAME. The name of the corporation is FASCIANO FUND, INC.
SECOND. PURPOSES. The purposes for which the corporation is formed
are:
1. To engage in the business of a private investment company.
2. To invest and reinvest in, to buy or otherwise acquire, to hold
for investment or otherwise, and to sell or otherwise dispose of:
a. Securities of all kinds, however evidenced, and rights or
warrants to acquire securities, of private and public companies,
corporations, associations, trusts and other enterprises and
organizations;
b. Obligations issued or guaranteed by national and state
governments and their instrumentalities and subdivisions;
c. Deposits in banks, savings banks, trust companies and savings and
loan associations;
d. Assets and interests other than securities or deposits.
THIRD. PRINCIPAL OFFICE AND RESIDENT AGENT. The post office
address of the principal office of the corporation in the State of Maryland is
c/o The Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland
21202. The name and post office address of the resident agent of the
corporation in the State of Maryland is The Corporation Trust Incorporated, 32
South Street, Baltimore, Maryland 21202. The resident agent is a Maryland
corporation.
FOURTH. CAPITAL STOCK.
A. AUTHORIZED STOCK. The total number of shares of capital stock
that the corporation shall have authority to issue is 1,000,000 shares, all of
one class called common stock, $.01 par value per share (common stock), having
an aggregate par value of $10,000.
B. SALE OF SHARES. The board of directors may authorize the sale
and issuance from time to time of shares of common stock, whether now or
hereafter authorized, for such consideration as the board of directors considers
advisable, but not less than par value, subject to such limitations as may be
set forth in these articles of incorporation, the bylaws, the General Laws of
the State of Maryland and other applicable laws.
C. FRACTIONAL SHARES. Stock may be issued in fractions of whole
shares, to which attach pro rata all of the rights of whole shares, including
the right of voting and of receipt
<PAGE>
of dividends, except that there shall be no right of receipt of a certificate
representing any fraction of a whole share.
D. NO PREEMPTIVE RIGHTS. No holder of shares of the corporation,
whether now or hereafter authorized, shall be entitled as of right to acquire
from the corporation any shares of the corporation, whether now or hereafter
authorized.
FIFTH. REDEMPTION OF SHARES. Any shareholder of the corporation,
by delivery to the corporation of an order for redemption in good form, may at
any time require the corporation to redeem all or any part of the shares of
common stock registered in the name of such shareholder, except as specified
below, at the net asset value of the shares which is next computed after the
time of receipt of such order for redemption.
An order for redemption in good form shall mean receipt by the
corporation or its designated agent of a written unconditional and irrevocable
instruction of the shareholder to redeem, in form acceptable to the corporation
or its designated agent, together with any certificates which may have been
issued therefor, endorsed or accompanied by proper instrument of transfer, and
such other documents as the corporation or its designated agent may require.
Payment for shares redeemed shall be made within seven days after
receipt of an order for redemption of the shares in good form .However, the
right of redemption of shares may be suspended, and the payment for shares
previously redeemed may be postponed, by or under the authority of the board of
directors for the whole or any part of any period during which such suspension
or postponement is permitted by the Investment Company Act of 1940, or by rule
or order of the Securities and Exchange Commission pursuant to that Act.
The corporation may pay the redemption price in whole or in part by a
distribution in kind of securities from the portfolio of the corporation, in
lieu of money, valuing such securities at their value employed for determining
the net asset value governing such redemption price, and selecting the
securities in such manner as may be determined to be fair and equitable by or
under the authority of the board of directors.
The net asset value shall be determined as of such times as the board
of directors shall prescribe by resolution .In the absence of any such
resolution of the board of directors, the net asset value shall be determined as
of the time of the close of trading on the New York Stock Exchange on any day on
which that exchange is open for trading and there is a purchase or redemption of
shares of the corporation.
The net asset value of each share of the corporation shall be
determined by or under the authority of the board of directors in accordance
with the provisions of, and the rules of the Securities and Exchange Commission
under, the Investment Company Act of 1940, and as to matters of accounting, in
conformity with generally accepted accounting principles .The board of
directors may appoint persons to assist it in the determination of the value of
assets, liabilities and net asset value per share, and to make the actual
calculations pursuant to the direction of the board of directors.
2
<PAGE>
SIXTH. BYLAWS. The board of directors is authorized to adopt,
alter and repeal the bylaws of the corporation, except to the extent that the
bylaws provide otherwise.
SEVENTH. BOARD OF DIRECTORS.
1. The total number of directors constituting the board of directors
of the corporation shall be three, which number may be increased from time to
time in accordance with the bylaws of the corporation but shall not be less than
three .No decrease in the number of directors shall have the effect of
shortening the term of any director then in office.
2. The names of the persons who will serve as the initial directors
of the corporation are as follows:
Michael F. Fasciano
Susan N. Fasciano
David L. Long
3. Any vacancy occurring in the board of directors may be filled by
a majority of the directors in office .A new directorship resulting from an
increase in the number of directors shall be construed not to be a vacancy .Any
director elected to fill a vacancy shall have the same remaining term as that of
the predecessor.
4. A majority of the total number of directors fixed in the bylaws
shall be required to constitute a quorum at meetings of the board of directors.
EIGHTH. MAJORITY VOTES OF SHAREHOLDERS. Notwithstanding any
provision of the laws of the State of Maryland requiring approval by the
shareholders of any action by the affirmative vote of a greater proportion than
a majority of the votes entitled to be cast on the matter, any such action may
be taken or authorized upon the concurrence of a majority of the number of votes
entitled to be cast thereon.
NINTH. INDEMNIFICATION. Each person who is or was a director or
officer of the corporation, and each person who serves or served at the request
of the corporation as a director or officer of another enterprise, shall be
indemnified by the corporation in accordance with, and to the fullest extent
authorized by, the General Corporation Law of the State of Maryland as it may be
in effect from time to time, provided that this section shall not protect any
director or officer of the corporation against any liability to the corporation
or to its shareholders to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office; and provided further that this
article shall not apply as to any action, suit or proceeding brought by or on
behalf of a director or officer without prior approval of the board of
directors.
TENTH. LIABILITY OF DIRECTORS AND OFFICERS. The directors and
officers of the corporation shall not be liable to the corporation or to any of
its shareholders or creditors because of any action taken by them in good faith,
and in taking any such action the directors and officers shall be fully
protected in relying in good faith upon the books of account of the corporation
or
3
<PAGE>
statements or reports prepared by any of its officials or employees or by others
who they believe in good faith are qualified to make such statements or reports;
provided that this sentence shall not protect any director or officer of the
corporation against any liability to the corporation or to its shareholders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
ELEVENTH. AMENDMENT OF ARTICLES OF INCORPORATION. The corporation
reserves the right to amend, alter, change or repeal any provision contained in
its articles of incorporation, in the manner now or hereafter prescribed by
statute, and any rights conferred upon the shareholders are granted subject to
this reservation.
IN WITNESS WHEREOF, Fasciano Fund, Inc. has caused these amended and
restated articles to be signed in its name and on its behalf by its president
and attested by its secretary on March 15, 1988.
FASCIANO FUND, INC.
By: /s/ Michael F. Fasciano
--------------------------------
Michael F. Fasciano
President
Attest:
/s/ Susan N. Fasciano
- -----------------------------------
Susan N. Fasciano
Secretary
THE UNDERSIGNED, president of Fasciano Fund, Inc., who executed on
behalf of the corporation the foregoing articles of amendment and restatement,
of which this certificate is made a part, hereby acknowledges, in the name and
on behalf of the corporation, the foregoing articles of amendment and
restatement to be the corporate act of the corporation and further certifies
that to the best of his knowledge, information and belief, the matters and facts
set forth therein with respect to the approval thereof are true in all material
respects, under the penalties of perjury.
/s/ Michael F.Fasciano
------------------------------------
Michael F. Fasciano
4
<PAGE>
Exhibit 2/99.B2
FASCIANO FUND, INC.
BYLAWS
ARTICLE I
OFFICES
SECTION 1.01. PRINCIPAL OFFICE. The principal office of the
corporation in the State of Maryland shall be located in the City of Baltimore.
SECTION 1.02. OTHER OFFICES. The corporation may also have offices
at such other places both within and without the State of Maryland as the board
of directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 2.01. PLACE OF MEETINGS. All meetings of the shareholders
shall be held at such place in the United States as shall be designated from
time to time by the board of directors.
SECTION 2.02. ANNUAL MEETING. The annual meeting of shareholders
shall be held at such date and time within the month of August of each year as
shall be designated from time to time by the board of directors and stated in
the notice of the meeting, at which they shall elect a board of directors and
transact such other business as may properly be brought before the meeting.
SECTION 2.03. SPECIAL MEETINGS. Special meetings of shareholders,
for any purpose or purposes, unless otherwise prescribed by statute or by the
articles of incorporation, may be called at any time by the president or the
board of directors. Special meetings of shareholders shall be called by the
secretary upon the written request of shareholders entitled to cast at least 25
percent of all the votes entitled to be cast at such meeting, provided that (a)
such request shall state the purpose or purposes of the meeting and the matters
proposed to be acted on at it; and (b) the shareholders requesting the meeting
shall have paid to the corporation the reasonably estimated cost of preparing
and mailing the notice thereof, which the secretary shall determine and specify
to such shareholders. Upon payment of these costs to the corporation, the
secretary shall notify each shareholder entitled to notice of the meeting.
Unless requested by shareholders entitled to cast a majority of all the votes
entitled to be cast at the meeting, a special meeting need not be called to
consider any matter which is substantially the same as a matter voted on at any
special meeting of shareholders held during the preceding twelve months.
SECTION 2.04. SHAREHOLDERS ENTITLED TO VOTE; NUMBER OF VOTES. If a
record date has been fixed for the determination of shareholders entitled to
notice of or to vote at any meeting of
<PAGE>
shareholders, each shareholder of the corporation shall be entitled to vote, in
person or by proxy, each share of stock (or fraction thereof) registered in such
shareholder's name on the books of the corporation outstanding at the close of
business on such record date, with one vote (or fraction of a vote) for each
share (or fraction thereof) so outstanding.
SECTION 2.05. NOTICE OF MEETINGS. Written notice of each meeting of
shareholders stating the place, date and hour of the meeting and, in the case of
a special meeting or if otherwise required by law, the purpose or purposes for
which the meeting is called, shall be given not less than 10 nor more than 90
days before the date of the meeting, to each shareholder entitled to vote at
such meeting.
SECTION 2.06. QUORUM; ADJOURNMENT. The holders of a majority of the
shares of stock entitled to vote at a meeting of shareholders, present in person
or represented by proxy, shall constitute a quorum at the meeting for the
transaction of business except as otherwise provided by statute or by the
articles of incorporation. If, however, such quorum shall not be present or
represented at any meeting of shareholders, the shareholders entitled to vote
thereat present in person or represented by proxy shall have the power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At any adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than 120 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each shareholder entitled to vote at the
meeting.
SECTION 2.07. VOTING. When a quorum is present at any meeting, the
vote of the holders of a majority of the shares of stock having voting power
present in person or represented by proxy and voting on the question shall
decide any question brought before such meeting, unless the question is one upon
which, by express provision of any statute or the articles of incorporation or
these bylaws, a different vote is required, in which case such express provision
shall govern and control the decision of such question.
SECTION 2.08. PROXIES. No proxy shall be valid more than eleven
months after its date, unless it provides for a longer period.
SECTION 2.09. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at a meeting of shareholders may be taken without a
meeting if a unanimous written consent which sets forth the action is signed by
each shareholder entitled to vote on the matter and filed with the record of
shareholders' meetings.
SECTION 2.10. STOCK LEDGER. The secretary of the corporation shall
cause an original or duplicate stock ledger to be maintained at the office of
the corporation's transfer agent, if any.
2
<PAGE>
ARTICLE III
DIRECTORS AND COMMITTEES
SECTION 3.01. FUNCTION AND POWERS. The business and affairs of the
corporation shall be managed under the direction of its board of directors. All
powers of the corporation may be exercised by or under the authority of the
board of directors except as conferred on or reserved to the shareholders by
statute or the articles of incorporation or these bylaws.
SECTION 3.02. NUMBER. The board of directors shall consist of three
directors, which number may be increased or decreased by a resolution of a
majority of the entire board of directors, provided that the number of directors
shall not be less than three nor more than 15.
SECTION 3.03. VACANCIES. Any vacancy occurring in the board of
directors for any cause other than by reason of an increase in the number of
directors may be filled by a majority of the remaining members of the board of
directors, although such majority is less than a quorum; provided, however, that
no vacancy shall be so filled unless immediately thereafter at least two-thirds
of the directors then holding office shall have been elected to such office by
the shareholders, and provided further that if at any time (other than prior to
the first annual meeting of shareholders) less than a majority of the directors
holding office at that time were elected by the shareholders, a meeting of the
shareholders shall be held promptly and in any event within 60 days for the
purpose of electing directors to fill any existing vacancy in the board of
directors. A director elected to fill a vacancy shall be elected to hold office
until the next annual meeting of shareholders or until his successor is elected
and qualifies.
SECTION 3.04. ANNUAL AND REGULAR MEETINGS. The first meeting of each
newly elected board of directors shall be held immediately after the adjournment
of the annual meeting of shareholders, or at such other time or place as shall
be specified in a notice given as hereinafter provided for special meetings of
the board of directors, or as shall be specified in a written waiver signed by
any director who is not present at the meeting. The board of directors from
time to time may provide for the holding of regular meetings of the board and
fix their time and place.
SECTION 3.05. SPECIAL MEETINGS. Special meetings of the board may be
called by the president on three days' notice to each director, either
personally or by mail or by telegram. Special meetings shall be called by the
president or secretary in like manner and on like notice on the written request
of a majority of the directors or a majority of the members of the executive
committee.
SECTION 3.06. QUORUM AND VOTING. At all meetings of the board the
act of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or the articles of incorporation or these
bylaws. If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
3
<PAGE>
SECTION 3.07. TELEPHONE MEETINGS. Members of the board of directors
or any committee thereof may participate in a meeting of such board or committee
by means of a conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other at the
same time, and participation by such means shall constitute presence in person
at the meeting, except as may be otherwise specifically provided by statute or
the articles of incorporation or these bylaws.
SECTION 3.08. ACTION WITHOUT MEETING. Unless otherwise restricted by
statute or the articles of incorporation or these bylaws, any action required or
permitted to be taken at any meeting of the board of directors or of any
committee thereof may be taken without a meeting if a unanimous written consent
which sets forth the action is signed by each member of the board or committee,
as the case may be, and filed with the minutes of proceedings of the board or
committee.
SECTION 3.09. COMMITTEES. The board of directors may, by resolution
passed by a majority of the entire board, designate an executive committee and
other committees, each committee to consist of two or more directors of the
corporation. In the absence of a member of a committee, the members thereof
present at any meeting, whether or not they constitute a quorum, may appoint
another member of the board of directors to act at the meeting in the place of
any such absent member.
SECTION 3.10. EXECUTIVE COMMITTEE. Unless otherwise provided by
resolution of the board of directors, the executive committee shall have and may
exercise all powers of the board of directors in the management of the business
and affairs of the corporation that may lawfully be exercised by an executive
committee, except the power to: (i) declare dividends or distributions on stock;
(ii) issue stock; (iii) recommend to the shareholders any action which requires
shareholder approval; (iv) amend the bylaws; or (v) approve any merger or share
exchange which does not require shareholder approval.
SECTION 3.11. OTHER COMMITTEES. To the extent provided by resolution
of the board of directors, other committees of the board shall have and may
exercise any of the powers that may lawfully be granted to the executive
committee.
SECTION 3.12. MINUTES OF COMMITTEE MEETINGS. Each committee shall
keep regular minutes of its meetings and report the same to the board of
directors when required.
SECTION 3.13. EXPENSES AND COMPENSATION OF DIRECTORS. The directors
may be paid their expenses, if any, of attendance at each meeting of the board
of directors and may be paid a fixed sum for attendance at each meeting of the
board of directors or a stated salary as director, or both. No such payment
shall preclude any director from serving the corporation in any other capacity
and receiving compensation therefor. Members of special or standing committees
may be allowed like compensation for attending committee meetings.
4
<PAGE>
ARTICLE IV
NOTICES
SECTION 4.01. TYPE OF NOTICE. Whenever, under the provisions of any
statute or the articles of incorporation or these bylaws, notice is required to
be given to any director or shareholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or shareholder, at such director's or shareholder's address as it
appears on the records of the corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given by
telegram.
SECTION 4.02. WAIVER OF NOTICE. Whenever the provisions of any
statute or the articles of incorporation or these bylaws require notice of the
time, place or purpose of a meeting of the board of directors or a committee of
the board, or of shareholders, each person who is entitled to the notice waives
notice if: (a) before or after the meeting such person signs a waiver of notice
which is filed with the records of the meeting; or (b) such person is present at
the meeting or, in the case of a shareholders' meeting, such shareholder is
represented by proxy.
ARTICLE V
OFFICERS
SECTION 5.01. OFFICES. The officers of the corporation shall be
elected by the board of directors and shall be a president, one or more vice
presidents (the number, seniority and any other designations thereof to be
determined by the board of directors), a secretary and a treasurer. The board
of directors may also appoint one or more assistant secretaries and assistant
treasurers. Any number of offices may be held by the same person, unless the
articles of incorporation or these bylaws otherwise provide, except that no one
may serve concurrently as both president and vice president. A person who holds
more than one office may not act in more than one capacity to execute,
acknowledge or verify an instrument required by law to be executed, acknowledged
or verified by more than one officer.
SECTION 5.02. ANNUAL ELECTION. The board of directors at its first
meeting after each annual meeting of shareholders shall elect a president, one
or more vice presidents, a secretary and a treasurer.
SECTION 5.03. OTHER OFFICERS AND AGENTS. The board of directors may
appoint such other officers and agents as it shall deem necessary, who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the board.
SECTION 5.04. REMUNERATION. The salaries or other remuneration, if
any, of all officers of the corporation shall be fixed by the board of
directors.
5
<PAGE>
SECTION 5.05. TERM OF OFFICE; REMOVAL; VACANCIES. The officers of
the corporation shall hold office until their respective successors are chosen
and qualify. Any officer elected or appointed by the board of directors may be
removed at any time by the affirmative vote of a majority of the board of
directors, when the board in its judgment finds that the best interests of the
corporation will be served by such action. The removal of an officer or agent
does not prejudice any of such person's contract rights. Any vacancy occurring
in any office of the corporation shall be filled by the board of directors.
SECTION 5.06. THE PRESIDENT. The president shall be the chief
executive officer of the corporation, shall have general and active management
of the business of the corporation, shall see that all orders and resolutions of
the board of directors are carried into effect and shall preside at all meetings
of the board of directors and shareholders. The president may execute bonds,
mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation.
SECTION 5.07. THE VICE PRESIDENTS. In the absence of the president
or in the event of his inability or refusal to act, the vice president (or in
the event there be more than one vice president, the vice presidents in the
order of seniority of title, or in the event of equal seniority, then in the
order designated, or in the absence of any designation, then in the order named
in the most recent resolution providing for the annual election of officers)
shall perform the duties of the president, and when so acting shall have all the
powers of and be subject to all the restrictions upon the president. The vice
presidents shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
SECTION 5.08. THE SECRETARY. The secretary: (a) shall attend all
meetings of the board of directors and all meetings of shareholders and record
all the proceedings of the meetings in a book to be kept for that purpose and
shall perform like duties for the standing committees when required; (b) shall
give, or cause to be given, notice of all meetings of the shareholders and
special meetings of the board of directors, and shall perform such other duties
as may be prescribed by the board of directors or the president, under whose
supervision the secretary shall be; and (c) shall have custody of the corporate
seal of the corporation and shall have authority to affix the same to any
instrument requiring it, and when so affixed it may be attested by his or her
signature.
Section 5.09. THE ASSISTANT SECRETARY. The assistant secretary, or
if there be more than one, the assistant secretaries in the order designated by
the board of directors (or in the absence of any designation, then in the order
named in the most recent resolution providing for the annual election of
officers), shall, in the absence of the secretary or in the event of his or her
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
6
<PAGE>
SECTION 5.10. THE TREASURER. The treasurer: (a) shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; (b) shall deposit with the corporation's custodian all moneys and
other valuable effects in the name and to the credit of the corporation; (c)
shall direct the custodian to make such disbursements of the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements; and (d) shall render to the president and the board of
directors, at its regular meetings, or when the board of directors so requires,
an account of all his or her transactions as treasurer and financial statements
of the corporation.
SECTION 5.11. THE ASSISTANT TREASURER. The assistant treasurer, or
if there shall be more than one, the assistant treasurers in the order
designated by the board of directors (or in the absence of any designation, then
in the order named in the most recent resolutions providing for the annual
election of officers), shall, in the absence of the treasurer or in the event of
his or her inability or refusal to act, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
ARTICLE VI
CAPITAL STOCK
SECTION 6.01. CERTIFICATES OF STOCK. Every holder of shares of stock
in the corporation shall be entitled, upon request, to have a certificate or
certificates, signed by, or in the name of the corporation by, the president or
a vice president and the treasurer, an assistant treasurer, the secretary or an
assistant secretary of the corporation, certifying the number of full shares
owned by him in the corporation. No certificates shall be issued for fractional
shares. Where a certificate is countersigned by a transfer agent other than the
corporation or its employee, any other signature on the certificate may be
facsimile. In case any officer or transfer agent who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer or transfer agent before such certificate is issued, it may be
issued by the corporation with the same effect as if such officer or transfer
agent were such officer or transfer agent at the date of issue.
SECTION 6.02. LOST CERTIFICATES. The board of directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or the legal representative thereof, to advertise the same in such
manner as it shall require and/or to give the corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed. The issuance of a new certificate under this section does not
constitute an overissue of the shares it represents.
7
<PAGE>
SECTION 6.03. TRANSFERS OF STOCK. The shares of stock of the
corporation shall be transferable on the books of the corporation at the request
of the record holder thereof in person or by a duly authorized attorney, upon
presentation to the corporation or its transfer agent of a duly executed
assignment or authority to transfer, or proper evidence of succession, and, if
the shares are represented by a certificate, a duly endorsed certificate or
certificates of stock surrendered for cancellation, and with such proof of the
authenticity of the signatures as the corporation or its transfer agent may
reasonably require. The transfer shall be recorded on the books of the
corporation, the old certificates, if any, shall be cancelled, and the new
record holder, upon request, shall be entitled to a new certificate or
certificates.
SECTION 6.04. FIXING OF RECORD DATE. The board of directors may fix
in advance a date as a record date for the determination of the shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend or other distribution
or allotment of any rights, or to exercise any rights in respect of any change,
conversion or exchange of shares of stock, or for the purpose of any other
lawful action, provided that such record date shall not be a date more than 90
days, and in the case of a meeting of shareholders not less than 10 days, prior
to the date on which the particular action requiring such determination of
shareholders is to be taken. In such case only such shareholders as shall be
shareholders of record on the record date so fixed shall be entitled to such
notice of, and to vote at, such meeting or adjournment, or to give such consent,
or to receive payment of such dividend or other distribution, or to receive such
allotment of rights, or to exercise such rights, or to take such other action,
as the case may be, notwithstanding any transfer of any shares on the books of
the corporation after any such record date.
SECTION 6.05. REGISTERED SHAREHOLDERS. The corporation shall be
entitled to treat the holder of record of shares of stock as the holder in fact
thereof and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by statute.
ARTICLE VI I
CUSTODIAN
SECTION 7.01. QUALIFICATIONS. The corporation shall at all times
employ, pursuant to a written contract, a bank or trust company having an
aggregate capital, surplus and undivided profits (as shown in its last published
report) of at least $2,000,000 as custodian to hold the funds and securities of
the corporation.
SECTION 7.02. CONTRACT. Such contract shall be upon such terms and
conditions and may provide for such compensation as the board of directors deems
necessary or appropriate, provided such contract shall further provide that the
custodian shall deliver securities owned by the corporation only upon sale of
such securities for the account of the corporation and receipt of
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payment therefor by the custodian or when such securities may be called,
redeemed, retired or otherwise become payable. Such limitation shall not,
however, prevent:
(a) the delivery of securities for examination to the broker selling
the same in accord with the "street delivery" custom whereby such
securities are delivered to such broker in exchange for a delivery receipt
exchanged on the same day for an uncertified check of such broker to be
presented on the same day for certification;
(b) the delivery of securities of an issuer in exchange for or
conversion into other securities alone or cash and other securities
pursuant to any plan of merger, consolidation, reorganization,
recapitalization or readjustment of the securities of such issuer;
(c) the conversion by the custodian of securities owned by the
corporation pursuant to the provisions of such securities into other
securities;
(d) the surrender by the custodian of warrants, rights or similar
securities owned by the corporation in the exercise of such warrants,
rights or similar securities, or the surrender of interim receipts or
temporary securities for definitive securities;
(e) the delivery of securities as collateral on borrowing effected by
the corporation;
(f) the delivery of securities owned by the corporation as a
redemption in kind of securities issued by the corporation.
The custodian shall deliver funds of the corporation only upon the purchase of
securities for the portfolio of the corporation and the delivery of such
securities to the custodian, but such limitation shall not prevent the release
of funds by the custodian for payment of interest, dividend disbursements, taxes
and management fees, for payments in connection with the conversion, exchange or
surrender of securities owned by the corporation as set forth in subparagraphs
(b), (c) and (d) above and for operating expenses of the corporation.
SECTION 7.03. TERMINATION OF CONTRACT. The contract of employment of
the custodian shall be terminable by either party on 60 days' written notice to
the other party. Upon any termination, the board of directors shall use its
best efforts to obtain a successor custodian, but lacking success in the
appointment of a successor custodian, the question of whether the corporation
shall be liquidated or shall function without a custodian shall be submitted to
the shareholders before delivery of any funds or securities of the corporation
to any person other than a successor custodian, including a temporary successor
selected by the retiring custodian. If a successor custodian is found, the
retiring custodian shall deliver funds and securities owned by the corporation
directly to the successor custodian.
SECTION 7.04. AGENTS OF CUSTODIAN. The provisions of any other
section of these bylaws to the contrary notwithstanding, any contract of
employment of a custodian to hold the funds and securities of the corporation
may authorize the custodian, upon approval of the board
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of directors, to appoint other banks or trust companies meeting the requirements
of this article, domestic and foreign (including domestic and foreign branches),
to perform all or a part of the duties of the custodian under its contract with
the corporation.
SECTION 7.05. NEGOTIABLE INSTRUMENTS. Except as otherwise authorized
by the board of directors, all checks and drafts for the payment of money shall
be signed in the name of the corporation by the custodian, and all requisitions
or orders for the payment of money by the custodian or for the issue of checks
and drafts therefor, all promissory notes, all assignments of shares or
securities standing in the name of the corporation, and all requisitions or
orders for the assignment of shares or securities standing in the name of the
custodian or its nominee, or for the execution of powers to transfer the same,
shall be signed in the name of the corporation by not less than two of its
officers. Promissory notes, checks or drafts payable to the corporation may be
endorsed only to the order of the custodian or its agent.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.01. DIVIDENDS.
(a) The board of directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the shareholders
according to their respective rights and interests and in accordance with the
applicable provisions of the articles of incorporation.
(b) The board of directors may prescribe from time to time that
dividends declared are payable at the election of any of the shareholders,
either in cash or in shares of the corporation.
(c) The board of directors shall cause any dividend payment to be
accompanied by a written statement if paid wholly or partly from any source
other than:
(i) the corporation's accumulated undistributed net income,
determined in accordance with generally accepted accounting principles and
the rules and regulations of the Securities and Exchange Commission
applicable to investment companies registered under the Investment Company
Act of 1940 ("Registered Investment Companies") then in effect, and not
including profits or losses realized upon the sale of securities or other
properties; or
(ii) the corporation's net income so determined for the current or
preceding fiscal year.
Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe as applicable to Registered Investment
Companies.
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SECTION 8.02. FISCAL YEAR. The fiscal year of the corporation shall
end on June 30 in each year.
SECTION 8.03. SEAL. The corporate seal shall have inscribed thereon
the name of the corporation and the words "Corporate Seal, Maryland". The seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or by placing the word "seal" adjacent to the signature of the
authorized officer of the corporation. Any officer or director of the
corporation shall have authority to affix the corporate seal of the corporation
to any document requiring the same.
ARTICLE IX
AMENDMENTS
SECTION 9.01. GENERAL. Except as provided in section 9.02, these
bylaws may be altered, amended or repealed, and new bylaws may be adopted,
solely by the board of directors, at any meeting of the board of directors.
SECTION 9.02. AMENDMENT BY SHAREHOLDERS ONLY. Sections 2.06 and 2.07
of article II, section 3.04 of article III, article VII, and sub-section 8.01(c)
of article VIII of these bylaws may be altered, amended or repealed only with
the approval of the holders of a "majority of the outstanding voting securities"
of the corporation, as that term is defined in section 2(a)(40) of the
Investment Company Act of 1940.
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Exhibit 5/99.B5
INVESTMENT ADVISORY AGREEMENT
Fasciano Fund, Inc., a Maryland corporation (the "Fund"), and Fasciano
Company, Inc., an Illinois corporation (the "Adviser"), agree that:
1. ENGAGEMENT OF THE ADVISER. The Adviser shall manage the
investment and reinvestment of the assets of the Fund, subject to the
supervision of the board of directors of the Fund, for the period and on the
terms set forth in this Agreement. The adviser shall give due consideration to
the investment policies and restrictions and the other statements concerning the
Fund in the Fund's restated articles of incorporation, bylaws, and registration
statements under the Investment Company Act of 1940 ("1940 Act") and the
Securities Act of 1933, and to the provisions of the Internal Revenue Code
applicable to the fund as a regulated investment company. The Adviser shall be
deemed for all purposes to be an independent contractor and not an agent of the
Fund, and unless otherwise expressly provided or authorized, shall have no
authority to act for or represent the Fund in any way.
The Adviser is authorized to make the decisions to buy and sell
securities of the Fund, to place the Fund's portfolio transactions with
securities broker-dealers, and to negotiate the terms of such transactions,
including brokerage commissions on brokerage transactions, on behalf of the
Fund. The Adviser is authorized to exercise discretion within the Fund's policy
concerning allocation of its portfolio brokerage, as permitted by law, including
but not limited to section 28(e) of the Securities Exchange Act of 1934, and in
so doing shall not be required to make any reduction in its investment advisory
fees.
2. EXPENSES TO BE PAID BY THE ADVISER. The Adviser shall furnish,
at its own expense, office space to the Fund and all necessary office
facilities, equipment and personnel for managing the assets of the Fund. The
Adviser shall also assume and pay all other expenses incurred by it in
connection with managing the assets of the Fund, including all expenses of
marketing shares of the Fund.
3. EXPENSES TO BE PAID BY THE FUND. The Fund shall pay all charges
of depositories, custodians and other agencies for the safekeeping and servicing
of its cash, securities and other property and of its transfer agents,
registrars and its dividend disbursing and redemption agents, if any; all
charges of legal counsel and of independent auditors; organizational expenses of
the Fund (which will be amortized over a five-year period); all expenses in
determination of price computations, placement of securities orders and related
bookkeeping; all compensation of directors other than those affiliated with the
Adviser and all expenses incurred in connection with their services to the Fund;
all expenses of publication of notices and reports to its shareholders; all
expenses of proxy solicitations of the Fund or its board of directors; all taxes
and corporate fees payable to federal, state or other governmental agencies,
domestic or foreign; all stamp or other transfer taxes; all expenses of printing
and mailing certificates for shares of the Fund; and all expenses of bond and
insurance coverage required by law or deemed advisable by the Fund's board of
directors. In addition to the payment of expenses, the Fund shall also pay all
brokers' commissions and other charges relative to the
<PAGE>
purchase and sale of portfolio securities, interest charges and litigation and
other extraordinary expenses, if any.
4. COMPENSATION OF THE ADVISER. For the services to be rendered and
the charges and expenses to be assumed and to be paid by the Adviser hereunder,
the Fund shall pay to the Adviser a monthly fee of 1/12 of 1% of the average
daily net asset value of the Fund, as determined by the average of valuations
made as of the close of business on each day that the Fund calculates its net
asset value, which fee shall be payable monthly on or before the 15th day of the
succeeding month.
5. LIMITATION OF EXPENSES OF THE FUND. During the term of this
Agreement, the total operating expenses of the Fund, including fees paid to the
Adviser, shall not in any fiscal year exceed 2% of the average net asset value
of the Fund as determined by valuations made as of the last business day of each
month, and the Adviser agrees to pay any excess operating expenses or to
reimburse the Fund for any sums expended for such expenses in excess of that
amount. For this purpose, brokers' commissions and other charges relative to
the purchase and sale of portfolio securities, interest charges, taxes and
litigation and other extraordinary expenses shall not be regarded as operating
expenses.
6. SERVICES OF THE ADVISER NOT EXCLUSIVE. The services of the
Adviser to the Fund hereunder are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others so long as its services under
this Agreement are not impaired by such other activities.
7. SERVICES OTHER THAN AS THE ADVISER. The Adviser or its
affiliates may act as broker for the Fund in connection with the purchase or
sale of securities by or to the Fund if and to the extent permitted by
procedures adopted from time to time by the board of directors of the Fund.
Such brokerage services are not within the scope of the duties of the Adviser
under this Agreement, and, within the limits permitted by law and the board of
directors of the Fund, the Adviser may receive brokerage commissions, fees or
other remuneration from the Fund for such services in addition to its fee for
services as the Adviser. Within the limits permitted by law the Adviser may
receive compensation from the Fund for other services performed by it for the
Fund which are not within the scope of the duties of the Adviser under this
Agreement.
8. LIMITATION OF LIABILITY OF THE ADVISER. The Adviser shall not be
liable to the Fund or its shareholders for any loss suffered by the Fund or its
shareholders from or as a consequence of any act or omission of the Adviser, or
of any of the directors, officers, employees or agents of the Adviser, in
connection with or pursuant to this Agreement, except by reason of willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its duties or by reason of reckless disregard by the Adviser of
its obligations and duties under this Agreement.
9. DURATION AND RENEWAL. This Agreement shall continue in effect
until two years from the date of its execution, and thereafter from year to year
only so long as such continuance is specifically approved at least annually by
the board of directors of the Adviser and by (a) a majority of those directors
of the Fund who are not "interested persons" (as defined in
2
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section 2(a)(19) of the 1940 Act) of the Fund or the Adviser, voting in person
at a meeting called for the purpose of voting on such approval, and (b) either
the board of directors of the Fund or by vote of the holders of a "majority of
the outstanding shares of the Fund" (which term as used throughout this
Agreement shall be construed in accordance with the definition of "vote of a
majority of the outstanding voting securities of a company" in section 2(a)(42)
of the 1940 Act).
10. TERMINATION. This Agreement may be terminated at any time,
without payment of any penalty, by the board of directors of the Fund, or by a
vote of the holders of a majority of the outstanding shares of the Fund, upon 60
days' written notice to the Adviser. This Agreement may be terminated by the
Adviser at any time upon 60 days' written notice to the Fund. This Agreement
shall terminate automatically in the event of its assignment (as defined in
section 2(a)(4) of the 1940 Act).
11. AMENDMENT. This Agreement may not be amended without the
affirmative vote of (a) a majority of those directors of the Fund who are not
"interested persons" (as defined in section 2(a)(19) of the 1940 Act) of the
Fund or the Adviser, voting in person at a meeting called for the purpose of
voting on such approval, and (b) the holders of a majority of the outstanding
shares of the Fund.
Dated November 1, 1988
FASCIANO FUND, INC.
By /s/ Michael F. Fasciano
------------------------
President
FASCIANO COMPANY, INC.
By /s/ Michael F. Fasciano
-----------------------
President
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CUSTODIAN AGREEMENT
THIS AGREEMENT made on August 1, 1987, between Fasciano Fund, Inc., a
Maryland Corporation (hereinafter called the "Corporation"), and FIRST WISCONSIN
TRUST COMPANY, a corporation organized under the laws of the State of Wisconsin
(hereinafter called "Custodian"),
W I T N E S S E T H :
WHEREAS, the Corporation desires that its securities and cash shall be
hereafter held and administered by Custodian pursuant to the terms of this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Corporation and Custodian agree as follows:
1. DEFINITIONS
The word "securities" as used herein include stocks, shares, bonds,
debentures, notes, mortgages, or other obligations and any certificates,
receipts, warrants or other instruments representing rights to receive, purchase
or subscribe for the same, or evidencing or representing any other rights or
interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Corporation by one of the
following: the President, Vice President, Secretary or Treasurer of the
Corporation, or any other persons duly authorized to sign by the Board of
Directors of the Corporation.
2. NAMES, TITLES AND SIGNATURES OF CORPORATION'S OFFICERS
An officer of the Corporation will certify to Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1 hereof, and the names of the members of the Board of
Directors, together with any changes which may occur from time to time.
3. RECEIPT AND DISBURSEMENT OF MONEY
A. Custodian shall open and maintain a separate account or accounts
in the name of the Corporation, subject only to draft or order by Custodian
acting pursuant to the terms of this Agreement. Custodian shall hold in such
account or accounts, subject to the provisions hereof, all cash received by it
from or for the account of the Corporation. Custodian shall make payments of
cash to, or for the account of, the Corporation from such cash only (a) for the
purchase of securities for the portfolio of the Corporation upon the delivery of
such securities to Custodian, registered in the name of the Corporation or of
the nominee of Custodian referred to in Section 7 or in proper form for
transfer, (b) for the purchase or redemption of shares of the common stock of
the Corporation upon delivery thereof to Custodian, (c) for the payment of
interest, dividends, taxes, investment adviser's fees or operating expenses
(including, without
<PAGE>
limitation thereto, fees for legal, accounting, auditing and custodian services
and expenses for printing and postage), (d) for payments in connection with the
conversion, exchange or surrender of securities owned or subscribed to by the
Corporation held by or to be delivered to Custodian, or (e) for other proper
corporate purposes certified by resolution of the Board of Directors of the
Corporation. Before making any such payment Custodian shall receive (and may
rely upon) an officers' certificate requesting such payment and stating that it
is for a purpose permitted under the terms of items (a), (b), (c) or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made; provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument if
the President, a Vice President, the Secretary or the Treasurer of the
Corporation issues appropriate oral instructions to Custodian and an appropriate
officers' certificate is received by Custodian within two business days
thereafter.
B. Custodian is hereby authorized to endorse and collect all checks,
drafts or other orders for the payment of money received by Custodian for the
account of the Corporation.
4. RECEIPT OF SECURITIES
Custodian shall hold in a separate account, and physically segregated
at all times from those of any other persons, firms or corporations, pursuant to
the provisions hereof, all securities received by it from or for the account of
the Corporation. All such securities are to be held or disposed of by Custodian
for, and subject at all times to the instructions of, the Corporation pursuant
to the terms of this Agreement. The Custodian shall have no power or authority
to assign, hypothecate, pledge or otherwise dispose of any such securities and
investments, except pursuant to the direction of the Corporation and only for
the account of the Corporation as set forth in Section 5 of this Agreement.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
Custodian shall have sole power to release or deliver any securities
of the Corporation held by it pursuant to this Agreement. Custodian agrees to
transfer, exchange or deliver securities held by it hereunder only (a) for sales
of such securities for the account of the Corporation upon receipt by Custodian
of payment therefore, (b) when such securities are called, redeemed or retired
or otherwise become payable, (c) for examination by any broker selling any such
securities in accordance with "street delivery" custom, (d) in exchange for, or
upon conversion into, other securities alone or other securities and cash
whether pursuant to any plan of merger, consolidation, reorganization,
recapitalization or readjustment, or otherwise, (e) upon conversion of such
securities pursuant to their terms into other securities, (f) upon exercise of
subscription, purchase or other similar right, represented by such securities,
(g) for the purpose of exchanging interim receipts or temporary securities for
definitive securities, (h) for the purpose of redeeming in kind shares of common
stock of the Corporation upon delivery thereof to Custodian, or (i) for other
proper corporate purposes. As to any deliveries made by Custodian pursuant to
items (a), (b), (d), (e), (f), and (g), securities or cash receivable in
exchange therefore
2
<PAGE>
shall be deliverable to Custodian. Before making any such transfer, exchange or
delivery, Custodian shall receive (and may rely upon) an officers' certificate
requesting such transfer, exchange or delivery, and stating that it is for a
purpose permitted under the terms of items (a), (b), (c), (d), (e), (f), (g) or
(h) of this Section 5 and also, in respect of item (i), upon receipt of an
officers' certificate specifying the securities to be delivered, setting forth
the purpose for which such delivery is to be made, declaring such purpose to be
a proper corporate purpose, and naming the person or persons to whom delivery of
such securities shall be made; provided, however, that an officers' certificate
need not precede any such transfer, exchange or delivery of a money market
instrument if the President, a Vice President, the Secretary or the Treasurer of
the Corporation issues appropriate oral instructions to Custodian and an
appropriate officers' certificate is received by Custodian within two business
days thereafter.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until Custodian receives an officers' certificate to the
contrary, Custodian shall: (a) present for payment all coupons and other income
items held by it for the account of the Corporation which call for payment upon
presentation and hold the cash received by it upon such payment for the account
of the Corporation; (b) collect interest and cash dividends received, with
notice to the Corporation, for the account of the Corporation; (c) hold for the
account of the Corporation hereunder all stock dividends, rights and similar
securities issued with respect to any securities held by it hereunder; and (d)
execute as agent on behalf of the Corporation all necessary ownership
certificates required by the Internal Revenue Code or the Income Tax Regulations
of the United States Treasury Department or under the laws of any state now or
hereafter in effect, inserting the Corporation's name on such certificates as
the owner of the securities covered thereby, to the extent it may lawfully do
so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate Custodian
shall register all securities, except such as are in bearer form, in the name of
a registered nominee of Custodian as defined in the Internal Revenue Code and
any Regulations of the Treasury Department issued hereunder or in any provision
of any subsequent Federal tax law exempting such transaction from liability for
stock transfer taxes, and shall execute and deliver all such certificates in
connection therewith as may be required by such laws or regulations or under the
laws of any state. Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times identifiable in
its records.
The Corporation shall from time to time furnish to Custodian
appropriate instruments to enable Custodian to hold or deliver in proper form
for transfer, or to register in the name of its registered nominee, any
securities which it may hold for the account of the Corporation and which may
from time to time be registered in the name of the Corporation.
3
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8. VOTING AND OTHER ACTION
Neither Custodian nor any nominee of Custodian shall vote any of the
securities held hereunder by or for the account of the Corporation, except in
accordance with the instructions contained in an officers' certificate.
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation to
such securities, such proxies to be executed by the registered holder of such
securities (if registered otherwise than in the name of the Corporation), but
without indicating the manner in which such proxies are to be voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Corporation shall pay or reimburse Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder, and for
all other necessary and proper disbursements and expenses made or incurred by
Custodian in the performance of this Agreement.
Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be required
under the provisions of the Internal Revenue Code and any Regulations of the
Treasury Department issued thereunder, or under the laws of any state, to exempt
from taxation any exemptable transfers and/or deliveries of any such securities.
10. CONCERNING CUSTODIAN
Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the two parties. Until modified in writing such compensation
shall be as set forth in Exhibit A attached hereto.
Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board of Directors, and may rely on the genuineness of any such document which
it may in good faith believe to have been validly executed.
The Corporation agrees to indemnify and hold harmless Custodian and
its nominee from all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or by its
nominee in connection with the performance of this Agreement, except such as may
arise from its or its nominee's own negligent action, negligent failure to act
or willful misconduct. Custodian is authorized to charge any account of the
Corporation for such items. In the event of any advance of cash for any purpose
made by Custodian resulting from orders or instructions of the Corporation, or
in the event that Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Corporation shall be
security therefore.
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11. REPORTS BY CUSTODIAN
Custodian shall furnish the Corporation weekly with a statement
summarizing all transactions and entries for the account of Corporation.
Custodian shall furnish the Corporation at the end of every month with a list of
the portfolio securities showing the aggregate cost of each issue. Custodian
shall furnish the Corporation, at the close of each quarter of the Corporation's
fiscal year, with a list showing the cost of the securities held by it for the
corporation hereunder, adjusted for all commitments confirmed by the Corporation
as of such close, certified by a duly authorized officer of Custodian. The
books and records of Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at reasonable times by officers of, and of
auditors employed by, the Corporation.
12. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Corporation, or by Custodian,
on sixty days' notice, given in writing and sent by registered mail to Custodian
at P. O. Box 2054, Milwaukee, Wisconsin 53201, or to the Corporation at 135
South La Salle Street, Suite 1209, Chicago, Illinois 60603, as the case may be.
Upon any termination of this Agreement, pending appointment of a successor to
Custodian or a vote of the shareholders of the Corporation to dissolve or to
function without custodian of its cash, securities and other property, Custodian
shall not deliver cash, securities or other property of the Corporation to the
Corporation, but may deliver them to a bank or trust company in the City of
Milwaukee of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report of not less than Two
Million Dollars ($2,000,000) as a Custodian for the Corporation to be held under
terms similar to those of this Agreement; provided, however, the Custodian shall
not be required to make any such delivery or payment until full payment shall
have been made by the Corporation of all liabilities constituting a charge on or
against the properties then held by Custodian or on or against Custodian, and
until full payment shall have been made to Custodian of all its fees,
compensation, costs and expenses, subject to the provisions of Section 10 of
this Agreement.
This Agreement may not be assigned by Custodian without the consent of
the Corporation, authorized or approved by a resolution of its Board of
Directors.
13. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by
Custodian of a central securities clearing agency or securities depository;
provided, however, that Custodian and the central securities clearing agency or
securities depository meet all applicable federal and state laws and regulations
and the Board of Directors of the corporation approves by resolution the use of
such central securities clearing agency or securities depository.
14. RECORDS
To the extent that Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Corporation pursuant to
the provisions of the Investment Company Act of 1940, as amended, or the rules
and regulations promulgated
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thereunder, Custodian agrees to make any such records available to the
Corporation upon request and to preserve such records for the periods prescribed
in Rule 31a-2 under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers "hereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRST WISCONSIN TRUST COMPANY
/s/ Andrea Lydolph By /s/ James W. Hintz
- ----------------------------------- -------------------------------------
ASSISTANT SECRETARY VICE PRESIDENT
FASCIANO FUND, INC.
By /s/ Michael F. Fasciano
-------------------------------------
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Exhibit 9/99.B9A
SHAREHOLDER SERVICING AGENT AGREEMENT
THIS AGREEMENT, made and entered into on this 1st day of November , 1988,
by and between Fasciano Fund, Inc. (hereinafter referred to as the "Fund") and
FIRST WISCONSIN TRUST COMPANY, a corporation organized under the laws of the
State of Wisconsin, (hereinafter referred to as "Agent").
WITNESSETH:
WHEREAS, the Fund is an open-end management investment company which is
registered under the Investment Company Act of 1940; and
WHEREAS, the Agent is a trust company and, among other things, is in the
business of administering transfer and dividend disbursing agent functions for
the benefit of its customers.
NOW, THEREFORE, the Fund and the Agent do mutually promise and agree as
follows:
1. EMPLOYMENT. The Fund hereby employs Agent to act as Shareholder
Servicing Agent for the Fund. Agent shall, at its own expense, render the
services and assume the obligations herein set forth subject to being
compensated therefor as herein provided.
2. AUTHORITY OF AGENT. Agent is hereby authorized by the Fund to receive
all cash which may from time to time be delivered to it by or for the account of
the Fund; to issue confirmations and/or certificates for shares of capital stock
of the Fund upon receipt of payment; to redeem or repurchase on behalf of the
Fund shares of capital stock of the Fund upon receipt of certificates properly
endorsed or properly executed written requests as described in the Prospectus of
the Fund and to act as dividend disbursing agent for the Fund.
3. DUTIES OF THE AGENT. Agent hereby agrees to:
A. Process new accounts.
B. Process purchases, both initial an subsequent in accordance with
conditions set forth in the Fund's prospectus as mutually agreed
by the Fund and the Agent.
C. Transfer shares of capital stock to an existing account or to a
new account upon receipt of required documentation in good order.
D. Redeem uncertificated and/or certificated shares upon receipt of
required documentation in good order.
E. Issue and/or cancel certificates as instructed; replace lost,
stolen or destroyed certificates upon receipt of satisfactory
indemnification or bond.
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F. Distribute dividends and/or capital gain distributions. This
includes disbursement as cash or reinvestment and to change the
disbursement option at the request of shareholders.
G. Process exchanges between funds, (process and direct
purchase/redemption and initiate new account or process to
existing account).
H. Make miscellaneous changes to records, including, but not
necessarily limited to, address changes and changes in plans
(such as systematic withdrawal, dividend reinvestment, etc.)
I. Prepare and mail a year-to-date confirmation and statement as
each transaction is recorded in a shareholder account as follows:
original to shareholder. Duplicate confirmations to be available
on request within current year.
J. Handle telephone calls and correspondence in reply to shareholder
requests except those items set forth in referrals to Fund.
K. Reports to the Fund:
Daily - transaction journal with analysis of accounts.
Monthly - analysis of transactions and accounts by types.
Quarterly - state sales analysis; sales by size; analysis of
systematic withdrawals, Keogh, IRA and 403(b)(7) plans; printout
of shareholder balances.
L. Daily control and reconciliation of Fund shares with Agent's
records and the Fund office records.
M. Mail and tabulate proxies for one Meeting of Shareholders,
including preparation of certified shareholder list and daily
report to Fund management, if required.
N. Prepare and mail annual Form 1099, Form W-2P and 5498 to
shareholders to whom dividends or distributions are paid, with a
copy for the IRS.
O. Provide readily obtainable data which may from time to time be
requested for audit purposes.
P. Replace lost or destroyed checks.
Q. Continuously maintain all records for active and closed accounts.
2
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R. Furnish shareholder date information for a current calendar year
in connection with IRA and Keogh Plans in a format suitable for
mailing to shareholders.
4. REFERRALS TO FUND. Agent hereby agrees to refer to the Fund for reply
the following:
A. Requests for investment information, including performance and
outlook.
B. Requests for information about specific plans: (i.e., IRA, KEOGH,
Systematic Withdrawal).
C. Requests for information about exchanges between the funds.
D. Requests for historical fund prices.
E. Requests for information about the value and timing of dividend
payments.
F. Questions regarding correspondence from the Fund and newspaper
articles.
G. Any requests for information from non-shareholders.
H. Any other types of shareholder requests as the fund may request
from Agent in writing.
5. COMPENSATION OF AGENT. Agent shall be compensated for its services
hereunder as may from time to time be agreed upon in writing between the two
parties. The Fund will reimburse Agent for all out-of-pocket expenses,
including, but not necessarily limited to, postage, confirmation forms, etc.
Special projects, not included in the fee schedule and requested by proper
instructions from the Fund, shall be completed by Agent and invoiced to the fund
as mutually agreed upon.
6. RIGHTS AND POWERS OF AGENT. Agent's rights and powers with respect to
acting for and on behalf of the Fund, including rights and powers of Agent's
officers and directors, shall be as follows:
A. No order, direction, approval, contract or obligation on behalf
of the Fund with or in any way affecting Agent shall be deemed
binding unless made in writing and signed on behalf of the Fund
by an officer or officers of the Fund who have been duly
authorized to so act on behalf of the Fund by its Board of
Directors.
B. Directors, officers, agents and shareholders of the Fund are or
may at any time or times be interested in Agent as officers,
directors, agents, shareholders, or otherwise. Correspondingly,
directors, officers,
3
<PAGE>
agents and shareholders of Agent are or may at any time or
times be interested in the Fund as directors, officers,
agents, shareholders or otherwise. Agent shall, if it so
elects, also have the right to be a shareholder of the Fund.
C. The services of Agent to the Fund are not to be deemed exclusive
and Agent shall be free to render similar services to others as
long as its services for others does not in any manner or way
hinder, preclude or prevent Agent from performing its duties and
obligations under this Agreement.
D. The Fund will indemnify the Agent and hold it harmless from and
against all costs, losses, and expenses which may be incurred by
it and all claims and liabilities which may be asserted or
assessed against it as a result of any action taken by it without
negligence and in good faith, and for any act, omission, delay or
refusal made by the Agent in connection with this agency in
reliance upon or in accordance with any instruction or advice of
any duly authorized officer of the Fund.
7. EFFECTIVE DATE. This Agreement shall become effective November 1,
1988.
8. TERMINATION OF AGREEMENT. This Agreement shall continue in force and
effect until terminated or amended to such an extent that a new Agreement is
deemed advisable by either party. Notwithstanding anything herein to the
contrary, this Agreement may be terminated at any time, without payment of any
penalty, by the Fund or Agent upon ninety (90) days written notice to the other
party.
9. AMENDMENT. This Agreement may be amended by mutual written consent of
the parties. If, at any time during the existence of this Agreement, the Fund
deems it necessary or advisable in the best interests of Fund that any amendment
of this Agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or state regulatory
agencies or other governmental authority, or to obtain any advantage under state
or federal laws, and shall notify Agent of the form of amendment which it deems
necessary or advisable and the reasons therefor, and if Agent declines to assent
to such amendment, Fund may terminate this Agreement forthwith.
4
<PAGE>
10. NOTICE. Any notice that is required to be given by the parties to
each other under the terms of this Agreement shall be in writing, addressed and
delivered, or mailed postpaid to the other party at the principal place of
business of such party.
FASCIANO FUND, INC. FIRST WISCONSIN TRUST COMPANY
By: /s/ Michael F. Fasciano By: /s/ James W. Hintz
-------------------------------- -----------------------------------
Michael F. Fasciano
President
Attest: /s/ Michael F. Fasciano Attest: /s/ Andrea Lydolph
---------------------------- -------------------------------
Susan N. Fasciano Assistant Secretary
Secretary
5
<PAGE>
FIRST WISCONSIN TRUST COMPANY
TRANSFER AGENT & SHAREHOLDER SERVICING
FEE SCHEDULE
FASCIANO FUND
$ 10.00 per shareholder account on the first 20,000 accounts.
$ 9.50 per shareholder account on the next 40,000 accounts.
$ 9.00 per shareholder account on the next 40,000 accounts.
$ 8.50 per shareholder account on the balance.
A monthly minimum fee of $600.00 will be applied through June 1989.
A monthly minimum fee of $1,000.00 will be applied from July through December
1989.
Plus out of pocket expenses including but not limited to:
- Telephone
- Postage
- Programming
- Retention of Records
- Stationary/ Envelopes
- Mailing
- Insurance
- Assistance in Handling Proxies
- Microfilm/Fiche of Records
6
<PAGE>
Exhibit 10/99.B10
[LETTERHEAD]
October 25, 1996
Fasciano Fund, Inc.
135 South LaSalle Street, Suite 1209
Chicago, IL 60603
SHARES OF CAPITAL STOCK,
$0.01 PAR VALUE PER SHARE
Dear Sirs:
We have acted as counsel for Fasciano Fund, Inc., a Maryland
corporation (Fund), in connection with the registration under the Securities Act
of 1933 (Act) of an indefinite number of shares of its capital stock, $0.01 par
value per share (shares), in the Fund's registration statement, no. 33-23997, on
form N-1A (registration statement). In this connection, we have examined
originals, or copies certified or otherwise identified to our satisfaction, of
such documents, corporate and other records, certificates and other papers as we
deemed it necessary to examine for the purpose of this opinion, including the
charter and bylaws of the Fund, resolutions of the board of directors
authorizing the issuance of shares, the form of certificates to evidence the
shares, and the registration statement.
Based upon the foregoing examination, we are of the opinion that:
1. The Fund is a corporation duly organized and legally existing in
good standing under the laws of Maryland.
2. Upon the issuance and delivery of the shares in accordance with
the charter of the Fund and the resolutions of the board of directors
authorizing the issuance of its shares and the receipt by the Fund of a
purchase price of not less than the net asset value or the par value per
share, the shares will be legally issued and outstanding, full paid and
nonassessable.
In giving the opinion expressed in subparagraph 2 above, we have
assumed that the number of shares issued at any time will not exceed the total
number of shares authorized to be issued by the Fund's charter.
<PAGE>
Fasciano Fund, Inc.
October 25, 1996
Page 2
We consent to the filing of this opinion as an exhibit to the
registration statement. In giving this consent we do not admit that we are in
the category of persons whose consent is required under section 7 of the Act.
Very truly yours,
/s/ BELL, BOYD & LLOYD
<PAGE>
Exhibit 11/99.B11
ARTUHR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated August 19, 1996, and to all references to our firm included in or made a
part of this Registration Statement on Form N-1A of Fasciano Fund, Inc.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
October 24, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<LEGEND> This schedule contains summary financial information extracted from
registrant's audited financial statements for the fiscal year ended June 30,
1996 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<INVESTMENTS-AT-COST> 19,242
<INVESTMENTS-AT-VALUE> 29,006
<RECEIVABLES> 25
<ASSETS-OTHER> 7
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 29,038
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57
<TOTAL-LIABILITIES> 57
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 18,585
<SHARES-COMMON-STOCK> 1,191
<SHARES-COMMON-PRIOR> 1,153
<ACCUMULATED-NII-CURRENT> (251)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 884
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 9,764
<NET-ASSETS> 29,038
<DIVIDEND-INCOME> 171
<INTEREST-INCOME> 125
<OTHER-INCOME> 0
<EXPENSES-NET> 376
<NET-INVESTMENT-INCOME> (79)
<REALIZED-GAINS-CURRENT> 2,014
<APPREC-INCREASE-CURRENT> 4,233
<NET-CHANGE-FROM-OPS> 6,167
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,455)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 154
<NUMBER-OF-SHARES-REDEEMED> 63
<SHARES-REINVESTED> 66
<NET-CHANGE-IN-ASSETS> 8,113
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 247
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 376
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 20.17
<PER-SHARE-NII> (0.05)
<PER-SHARE-GAIN-APPREC> 5.55
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (1.34)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 24.33
<EXPENSE-RATIO> 1.5
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
