As filed with the Securities and Exchange Commission on or about March 10, 2000
Securities Act Registration No. 33-17450
Investment Company Act Registration No. 811-5341
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 29548
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 16 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 17 [ X ]
(Check appropriate box or boxes)
STRONG DISCOVERY FUND, INC.
(Exact Name of Registrant as Specified in Charter)
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (414) 359-3400
Stephen J. Shenkenberg
Strong Capital Management, Inc.
100 Heritage Reserve
Menomonee Falls, Wisconsin 53051
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate
box).
[ X ] immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] on (date) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(2) of Rule 485
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective
date for a previously filed post-effective amendment.
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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 the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933, and has duly caused this Post-Effective Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the Village of Menomonee Falls, and State of Wisconsin on the
9th day of March, 2000.
STRONG DISCOVERY FUND, INC.
(Registrant)
By: /S/ STEPHEN J. SHENKENBERG
Stephen J. Shenkenberg, Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement on Form N-1A has been
signed below by the following persons in the capacities and on the date
indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
NAME TITLE DATE
- --------------------------- ---------------------------------- ----------------
Chairman of the Board (Principal
/s/ Richard S. Strong Executive Officer) and a Director March 9, 2000
- ---------------------------
Richard S. Strong
Treasurer (Principal Financial and
/s/ John W. Widmer Accounting Officer) March 9, 2000
- ---------------------------
John W. Widmer
Director March 9, 2000
- ---------------------------
Marvin E. Nevins*
Director March 9, 2000
- ---------------------------
Willie D. Davis*
Director March 9, 2000
- ---------------------------
William F. Vogt*
Director March 9, 2000
- ---------------------------
Stanley Kritzik*
Director March 9, 2000
- ---------------------------
Neal Malicky*
</TABLE>
* John S. Weitzer signs this document pursuant to powers of attorney filed
with this Post-Effective Amendment to the Registration Statement on Form N-1A.
By: /S/ JOHN S. WEITZER
John S. Weitzer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
EDGAR
EXHIBIT NO. EXHIBIT EXHIBIT NO.
- ----------- --------------------------------------------------
(d) Amended and Restated Investment Advisory Agreement EX-99.d
(h.1) Administration Agreement - Investor Class EX-99.h1
(n) Amended and Restated 18f-3 Plan EX-99.n
(q) Power of Attorney dated March 9, 2000 EX-99.q
</TABLE>
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AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made and entered into on ___________, and as amended and
restated on this _____ day of _______, 2000, between STRONG ___________, INC.,
a Wisconsin corporation (the "Corporation"), and STRONG CAPITAL MANAGEMENT,
INC., a Wisconsin corporation (the "Adviser");
WITNESSETH
WHEREAS, the Corporation is an open-end management investment company
under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Corporation is authorized to create separate series, each
with its own separate investment portfolio; and,
WHEREAS, the Corporation desires to retain the Adviser, which is a
registered investment adviser under the Investment Advisers Act of 1940, to act
as investment adviser for each series of the Corporation listed in Schedule A
attached hereto, and to manage each of their assets;
NOW, THEREFORE, the Corporation and the Adviser do mutually agree and
promise as follows:
1. EMPLOYMENT. The Corporation hereby appoints Adviser as investment
adviser for each series of the Corporation listed on Schedule A attached hereto
(a "Portfolio" or collectively, the "Portfolios"), and Adviser accepts such
appointment. Subject to the supervision of the Board of Directors of the
Corporation and the terms of this Agreement, the Adviser shall act as
investment adviser for and manage the investment and reinvestment of the assets
of any Portfolio. The Adviser is hereby authorized to delegate some or all of
its services subject to necessary approval, which includes without limitation,
the delegation of its investment adviser duties hereunder to a subadvisor
pursuant to a written agreement (a "Subadvisory Agreement") under which the
subadvisor shall furnish the services specified therein to the Adviser. The
Adviser will continue to have responsibility for all investment advisory
services furnished pursuant to a Subadvisory Agreement. The Adviser shall (i)
provide for use by the Corporation, at the Adviser's expense, office space and
all necessary office facilities, equipment and personnel for servicing the
investments of each Portfolio, (ii) pay the salaries and fees of all officers
and directors of the Corporation who are "interested persons" of the Adviser as
such term is defined under the 1940 Act, and (iii) pay for all clerical
services relating to research, statistical and investment work.
2. ALLOCATION OF PORTFOLIO BROKERAGE. The Adviser is authorized,
subject to the supervision of the Board of Directors of the Corporation, to
place orders for the purchase and sale of securities and to negotiate
commissions to be paid on such transactions. The Adviser may, on behalf of each
Portfolio, pay brokerage commissions to a broker which provides brokerage and
research services to the Adviser in excess of the amount another broker would
have charged for effecting the transaction, provided (i) the Adviser determines
in good faith that the amount is reasonable in relation to the value of the
brokerage and research services provided by the executing broker in terms of
the particular transaction or in terms of the Adviser's overall
responsibilities with respect to a Portfolio and the accounts as to which the
Adviser exercises investment discretion, (ii) such payment is made in
compliance with Section 28(e) of the Securities Exchange Act of 1934 and other
applicable state and federal laws, and (iii) in the opinion of the Adviser, the
total commissions paid by a Portfolio will be reasonable in relation to the
benefits to such Portfolio over the long term.
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3. EXPENSES. Each Portfolio will pay all its expenses and the
Portfolio's allocable share of the Corporation's expenses, other than those
expressly stated to be payable by the Adviser hereunder, which expenses payable
by a Portfolio shall include, without limitation, interest charges, taxes,
brokerage commissions and similar expenses, expenses of issue, sale, repurchase
or redemption of shares, expenses of registering or qualifying shares for sale,
expenses of printing and distributing prospectuses to existing shareholders,
charges of custodians (including sums as custodian and for keeping books and
similar services of the Portfolios), transfer agents (including the printing
and mailing of reports and notices to shareholders), registrars, auditing and
legal services, clerical services related to recordkeeping and shareholder
relations, printing of share certificates, fees for directors who are not
"interested persons" of the Adviser, and other expenses not expressly assumed
by the Adviser under Paragraph 1 above. If expenses payable by a Portfolio,
except interest charges, taxes, brokerage commissions and similar fees, and to
the extent permitted, extraordinary expenses, in any given fiscal year exceed
that percentage of the average net asset value of the Portfolio for such year,
as determined by valuations made as of the close of each business day of such
year, which is the most restrictive percentage expense limitation provided by
the laws of the various states in which the Portfolio's shares are qualified
for sale, or if the states in which the shares qualified for sale impose no
restrictions, then 2%, the Adviser shall reimburse the Portfolio for such
excess. Reimbursement of expenses by the Adviser shall be made on a monthly
basis and will be paid to a Portfolio by a reduction in the Adviser's fee,
subject to later adjustment month by month for the remainder of the Portfolio's
fiscal year.
4. AUTHORITY OF ADVISER. The Adviser shall for all purposes herein be
considered an independent contractor and shall not, unless expressly authorized
and empowered by the Corporation or any Portfolio, have authority to act for or
represent the Corporation or any Portfolio in any way, form or manner. Any
authority granted by the Corporation on behalf of itself or any Portfolio to
the Adviser shall be in the form of a resolution or resolutions adopted by the
Board of Directors of the Corporation.
5. COMPENSATION OF ADVISER. For the services to be furnished during
any month by the Adviser hereunder, each Portfolio listed in Schedule A shall
pay the Adviser, and the Adviser agrees to accept as full compensation for all
services rendered hereunder, an Advisory Fee as soon as practical after the
last day of such month. The Advisory Fee shall be an amount equal to 1/12th of
the annual fee as set forth in Schedule B of the average of the net asset value
of the Portfolio determined as of the close of business on each business day
throughout the month (the "Average Asset Value"). In case of termination of
this Agreement with respect to any Portfolio during any month, the fee for that
month shall be reduced proportionately on the basis of the number of calendar
days during which it is in effect and the fee computed upon the Average Asset
Value of the business days during which it is so in effect.
6. RIGHTS AND POWERS OF ADVISER. The Adviser's rights and powers with
respect to acting for and on behalf of the Corporation or any Portfolio,
including the rights and powers of the Adviser's officers and directors, shall
be as follows:
(a) Directors, officers, agents and shareholders of the Corporation
are or may at any time or times be interested in the Adviser as officers,
directors, agents, shareholders or otherwise. Correspondingly, directors,
officers, agents and shareholders of the Adviser are or may at any time or
times be interested in the Corporation as directors, officers, agents and as
shareholders or otherwise, but nothing herein shall be deemed to require the
Corporation to take any action contrary to its Articles of Incorporation or any
applicable statute or regulation. The Adviser shall, if it so elects, also have
the right to be a shareholder in any Portfolio.
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(b) Except for initial investments in a Portfolio, not in excess of
$100,000 in the aggregate for the Corporation, the Adviser shall not take any
long or short positions in the shares of the Portfolios and that insofar as it
can control the situation it shall prevent any and all of its officers,
directors, agents or shareholders from taking any long or short position in the
shares of the Portfolios. This prohibition shall not in any way be considered
to prevent the Adviser or an officer, director, agent or shareholder of the
Adviser from purchasing and owning shares of any of the Portfolios for
investment purposes. The Adviser shall notify the Corporation of any sales of
shares of any Portfolio made by the Adviser within two months after purchase by
the Adviser of shares of any Portfolio.
(c) The services of the Adviser to each Portfolio and the Corporation
are not to be deemed exclusive and Adviser shall be free to render similar
services to others as long as its services for others does not in any way
hinder, preclude or prevent the Adviser from performing its duties and
obligations under this Agreement. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser, the Adviser shall not be subject to
liability to the Corporation or to any of the Portfolios or to any shareholder
for any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security.
7. DURATION AND TERMINATION. The following shall apply with respect to
the duration and termination of this Agreement:
(a) This Agreement shall begin for each Portfolio as of the date of
this Agreement and shall continue in effect for two years. With respect to each
Portfolio added by execution of an Addendum to Schedule A, the term of this
Agreement shall begin on the date of such execution and, unless sooner
terminated as hereinafter provided, this Agreement shall remain in effect to
the date two years after such execution. Thereafter, in each case, this
Agreement shall remain in effect, for successive periods of one year, subject
to the provisions for termination and all of the other terms and conditions
hereof if: (a) such continuation shall be specifically approved at least
annually by either (i) the affirmative vote of a majority of the Board of
Directors of the Corporation, including a majority of the Directors who are not
parties to this Agreement or interested persons of any such party (other than
as Directors of the Corporation), cast in person at a meeting called for that
purpose or (ii) by the affirmative vote of a majority of a Portfolio's
outstanding voting securities; and (b) Adviser shall not have notified a
Portfolio in writing at least sixty (60) days prior to the anniversary date of
this Agreement in any year thereafter that it does not desire such continuation
with respect to that Portfolio. Prior to voting on the renewal of this
Agreement, the Board of Directors of the Corporation may request and evaluate,
and the Adviser shall furnish, such information as may reasonably be necessary
to enable the Corporation's Board of Directors to evaluate the terms of this
Agreement.
(b) Notwithstanding whatever may be provided herein to the contrary,
this Agreement may be terminated at any time with respect to any Portfolio,
without payment of any penalty, by affirmative vote of a majority of the Board
of Directors of the Corporation, or by vote of a majority of the outstanding
voting securities of that Portfolio, as defined in Section 2(a)(42) of the 1940
Act, or by the Adviser, in each case, upon sixty (60) days' written notice to
the other party and shall terminate automatically in the event of its
assignment.
8. AMENDMENT. This Agreement may be amended by mutual consent of the
parties, provided that the terms of each such amendment shall be approved by
the vote of a majority of the Board of Directors of the
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<PAGE>
Corporation, including a majority of the Directors who are not parties to this
Agreement or interested persons of any such party to this Agreement (other than
as Directors of the Corporation) cast in person at a meeting called for that
purpose, and, where required by Section 15(a)(2) of the 1940 Act, on behalf of
a Portfolio by a majority of the outstanding voting securities (as defined in
Section 2(a)(42) of the 1940 Act) of such Portfolio. If such amendment is
proposed in order to comply with the recommendations or requirements of the
Securities and Exchange Commission or state regulatory bodies or other
governmental authority, or to obtain any advantage under state or federal laws,
the Corporation shall notify the Adviser of the form of amendment which it
deems necessary or advisable and the reasons therefor, and if the Adviser
declines to assent to such amendment, the Corporation may terminate this
Agreement forthwith.
9. 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.
10. ASSIGNMENT. This Agreement shall neither be assignable nor subject
to pledge or hypothecation and in the event of assignment, pledge or
hypothecation shall automatically terminate. For purposes of determining
whether an "assignment" has occurred, the definition of "assignment" in Section
2(a)(4) of the 1940 Act shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the day and year first stated above.
<TABLE>
<CAPTION>
<S> <C> <C>
Attest: Strong Capital Management, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
Attest: Strong ___________, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
</TABLE>
4
<PAGE>
SCHEDULE A
The Portfolio(s) of the Strong ___________, Inc. currently subject to this
Agreement are as follows:
Date of Addition
PORTFOLIO(S) TO THIS AGREEMENT
<TABLE>
<CAPTION>
<S> <C> <C>
Attest: Strong Capital Management, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
Attest: Strong ___________, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
</TABLE>
5
<PAGE>
SCHEDULE B
Compensation pursuant to Paragraph 5 of this Agreement shall be calculated in
accordance with the following schedules:
PORTFOLIO(S) ANNUAL FEE
<TABLE>
<CAPTION>
<S> <C> <C>
Attest: Strong Capital Management, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
Attest: Strong ___________, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
</TABLE>
6
<PAGE>
INVESTOR CLASS SHARES
ADMINISTRATION AGREEMENT
THIS AGREEMENT is entered into on this ____ day of ________, 2000 between
Strong ___________, Inc., a Wisconsin corporation (the "Corporation"), and
Strong Capital Management, Inc., a Wisconsin corporation ("SCM"), with respect
to the shares of each of the Funds. All capitalized terms not defined herein
shall have the same meaning as in the Fund's current prospectus.
WITNESSETH
WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, the Corporation is authorized to create separate series, each with its
own separate investment portfolio, and the beneficial interest in each such
series will be represented by a separate series of shares (each series is
hereinafter individually referred to as a "Fund" and collectively, the
"Funds");
WHEREAS, it is in the interest of the Corporation to make administrative
services available to shareholders of the Funds;
WHEREAS, SCM wishes to act as the administrator for the Funds to perform
certain administrative functions in connection with purchases and redemptions
of shares of the Funds ("Shares") and to provide related services to
shareholders in connection with their investments in the Funds; and
NOW, THEREFORE, the Corporation and SCM do mutually agree and promise as
follows:
1. APPOINTMENT. SCM hereby agrees to perform certain administrative
services for the Corporation with respect to the Funds listed on Schedule A
hereto, as such Schedule A may be amended from time to time, as hereinafter set
forth.
2. SERVICES TO BE PERFORMED.
2.1 SHAREHOLDER SERVICES. SCM shall be responsible for performing
administrative and servicing functions, which shall include without limitation:
(i) authorizing expenditures and approving bills for payment on behalf of the
Funds; (ii) supervising preparation of the periodic updating of the Funds'
registration statements, including prospectuses and statements of additional
information, for the purpose of filings with the Securities and Exchange
Commission ("SEC") and state securities administrators and monitoring and
maintaining the effectiveness of such filings, as appropriate; (iii)
supervising preparation of shareholder reports, notices of dividends, capital
gains distributions and tax credits for the Funds' shareholders, and attending
to routine correspondence and other communications with individual
shareholders; (iv) supervising the daily pricing of the Funds' investment
portfolios and the publication of the respective net asset values of the shares
of each Fund, earnings reports and other financial data to the extent required
by the Fund's Advisory Agreement prior to the adoption of this Administration
Agreement; (v) monitoring relationships with organizations providing services
to the Funds, including the Custodian, DST and printers; (vi) supervising
compliance by the Funds with recordkeeping requirements under the 1940 Act and
regulations thereunder, maintaining books and records for the Funds (other than
those maintained by the Custodian and the Funds' transfer agent) and preparing
and filing of tax reports other than the Funds' income tax returns; (vii)
answering shareholder inquiries regarding account status and history, the
manner in which purchases and redemptions of the shares may be effected, and
certain other matters pertaining to the Funds; (viii) assisting shareholders in
designating and changing dividend options, account designations and addresses;
(ix) providing necessary personnel and facilities to coordinate the
establishment and maintenance of shareholder accounts and records with the
Funds' transfer agent; (x) transmitting shareholders' purchase and redemption
orders to the Funds' transfer agent; (xi) arranging for the wiring or other
transfer of funds to and from shareholder accounts in connection
1
<PAGE>
with shareholder orders to purchase or redeem shares; (xii) verifying purchase
and redemption orders, transfers among and changes in shareholder-designated
accounts; (xiii) informing the distributor of the gross amount of purchase and
redemption orders for shares; and (xiv) providing such other related services
as the Funds or a shareholder may reasonably request, to the extent permitted
by applicable law. SCM shall provide all personnel and facilities necessary in
order for it to perform the functions contemplated by this paragraph with
respect to shareholders.
2.2 STANDARD OF SERVICES. All services to be rendered by SCM hereunder
shall be performed in a professional, competent and timely manner subject to
the supervision of the Board of Directors of the Corporation on behalf of the
Funds. The details of the operating standards and procedures to be followed by
SCM in the performance of the services described above shall be determined from
time to time by agreement between SCM and the Corporation.
3. FEES. As full compensation for the services described in Section 2
hereof and expenses incurred by SCM, the Funds shall pay SCM a monthly fee at
an annual rate, as specified on Schedule A, of each Fund's average daily net
asset value. This fee will be computed daily and will be payable as agreed by
the Corporation and SCM, but no more frequently than monthly.
4. INFORMATION PERTAINING TO THE SHARES. SCM and its officers, employees
and agents are not authorized to make any representations concerning the Funds
or the Shares except to communicate accurately to shareholders factual
information contained in the Funds' Prospectus and Statement of Additional
Information and objective historical performance information. SCM shall act as
agent for shareholders only in furnishing information regarding the Funds and
shall have no other authority to act as agent for the Funds.
During the term of this Agreement, the Funds agree to furnish SCM all
prospectuses, statements of additional information, proxy statements, reports
to shareholders, sales literature, or other material the Funds will distribute
to shareholders of the Funds or the public, which refer in any way to SCM as
the administrator of the Funds, and SCM agrees to furnish the Funds all
material prepared for shareholders, in each case prior to use thereof. The
Funds shall furnish or otherwise make available to SCM such other information
relating to the business affairs of the Funds as SCM may, from time to time,
reasonably request in order to discharge its obligations hereunder.
Nothing in this Section 4 shall be construed to make the Funds liable for the
use of any information about the Funds which is disseminated by SCM.
5. USE OF SCM'S NAME. The Funds shall not use the name of SCM in any
prospectus, sales literature or other material relating to the Funds in a
manner not approved by SCM prior thereto; PROVIDED, HOWEVER, that the approval
of SCM shall not be required for any use of its name which merely refers in
accurate and factual terms to its appointment hereunder or which is required by
the SEC or any state securities authority or any other appropriate regulatory,
governmental or judicial authority; PROVIDED, FURTHER, that in no event shall
such approval be unreasonably withheld or delayed.
6. USE OF THE FUNDS' NAME. SCM shall not use the name of the Funds on any
checks, bank drafts, bank statements or forms for other than internal use in a
manner not approved by the Funds prior thereto; PROVIDED, HOWEVER, that the
approval of the Funds shall not be required for the use of the Funds' names in
connection with communications permitted by Sections 2 and 4 hereof or for any
use of the Funds' names which merely refer in accurate and factual terms to
SCM's role hereunder or which is required by the SEC or any state securities
authority or any other appropriate regulatory, governmental or judicial
authority; PROVIDED, FURTHER, that in no event shall such approval be
unreasonably withheld or delayed.
7. SECURITY. SCM represents and warrants that the various procedures and
systems which it has implemented with regard to safeguarding from loss or
damage attributable to fire, theft or any other cause any Fund's records and
other data and SCM's records, data, equipment, facilities and other property
used in the performance of its obligations hereunder are adequate and that it
will make such changes therein from time to time as in its judgment are
required for the secure performance of its obligations hereunder. The parties
shall review such systems and procedures on a periodic basis, and the Funds
shall from time to time specify the types of records and other data of the
Funds to be safeguarded in accordance with this Section 7.
2
<PAGE>
8. COMPLIANCE WITH LAWS. SCM assumes no responsibilities under this
Agreement other than to render the services called for hereunder, on the terms
and conditions provided herein. SCM shall comply with all applicable federal
and state laws and regulations. SCM represents and warrants to the Funds that
the performance of all its obligations hereunder will comply with all
applicable laws and regulations, the provisions of its articles of
incorporation and by-laws and all material contractual obligations binding upon
SCM. SCM furthermore undertakes that it will promptly inform the Funds of any
change in applicable laws or regulations (or interpretations thereof) which
would prevent or impair full performance of any of its obligations hereunder.
9. FORCE MAJEURE. SCM shall not be liable or responsible for delays or
errors by reason of circumstances beyond its control, including, but not
limited to, acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, acts of God,
insurrection, war, riots or failure of communication or power supply.
10. INDEMNIFICATION.
10.1 INDEMNIFICATION OF SCM. SCM, its directors, officers, employees and
agents shall not be liable for any error of judgment or mistake of law or any
loss suffered by the Funds in connection with the performance of its
obligations and duties under this Agreement, except a loss resulting from
willful misfeasance, bad faith, or gross negligence in the performance of such
obligations or duties or by reason of the reckless disregard thereof by SCM,
its directors, officers, employees and agents. The Funds will indemnify and
hold SCM, its directors, officers, employees and agents harmless, from all
losses, claims, damages, liabilities or expenses (including reasonable fees and
disbursements of counsel) from any losses, liabilities, damages, or expenses
(collectively, "Losses") resulting from any and all claims, demands, actions or
suits (collectively, "Claims") arising out of or in connection with actions or
omissions in the Funds including, but not limited to, any misstatements or
omissions in a prospectus, actions or inactions by the Funds or any of its
agents or contractors or the performance of SCM's obligations hereunder or
otherwise not resulting from the willful misfeasance, bad faith, or gross
negligence of SCM, its directors, officers, employees or agents, in the
performance of SCM's duties or from reckless disregard by SCM, its directors,
officers, employees or agents of SCM's obligations and duties under this
Agreement.
Notwithstanding anything herein to the contrary, the Funds will indemnify and
hold SCM harmless from any and all Losses (including reasonable counsel fees
and expenses) resulting from any Claims as a result of SCM's acting in
accordance with any received instructions from the Funds.
10.2 INDEMNIFICATION OF THE FUNDS. Without limiting the rights of the
Funds under applicable law, SCM will indemnify and hold the Funds harmless from
any and all Losses (including reasonable fees and disbursements of counsel)
from any Claims resulting from the willful misfeasance, bad faith, or gross
negligence of SCM, its directors, officers, employees or agents, in the
performance of SCM's duties or from reckless disregard by SCM, its directors,
officers, employees or agents of SCM's obligations and duties under this
Agreement.
10.3 SURVIVAL OF INDEMNITIES. The indemnities granted by the parties in
this Section 10 shall survive the termination of this Agreement.
11. INSURANCE. SCM shall maintain such reasonable insurance coverage as is
appropriate against any and all liabilities which may arise in connection with
the performance of its duties hereunder.
12. FURTHER ASSURANCES. Each party agrees to perform such further acts and
execute further documents as are necessary to effectuate the purposes hereof.
13. TERMINATION. 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 either party upon ninety (90) days written notice to the other party.
14. NON-EXCLUSIVITY. Nothing in this Agreement shall limit or restrict the
right of SCM to engage in any other business or to render services of any kind
to any other corporation, firm, individual or association.
3
<PAGE>
15. AMENDMENTS. This Agreement may be amended only by mutual written
consent.
16. 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 post paid to the other party at the principal place of
business of such party.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
as of the day and year first stated above.
Attest: Strong Capital Management, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
Attest: Strong ___________, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
4
<PAGE>
SCHEDULE A
The Funds of the Corporation currently subject to this Agreement are as
follows:
Date of Addition
PORTFOLIO(S) ANNUAL RATE TO THIS AGREEMENT
Attest: Strong Capital Management, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
Attest: Strong ___________, Inc.
--------------------------------------
John S. Weitzer Stephen J. Shenkenberg, Vice President
5
<PAGE>
AMENDED AND RESTATED RULE 18F-3
MULTIPLE CLASS PLAN
THIS AMENDED AND RESTATED 18F-3 MULTIPLE CLASS PLAN, adopted on _______, 19xx,
is amended and restated this ____ day of __________ 2000 by, the corporations
listed on Schedule A, as such Schedule A may be amended from time to time, each
a Wisconsin corporation (each a "Corporation" and collectively, the
"Corporations"); and
WHEREAS, each Corporation engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940 (the "1940 Act"); and
WHEREAS, the Corporations are authorized to create separate series, each with
its own separate investment portfolio, and the beneficial interest in each such
series will be represented by a separate series of shares (each series is
hereinafter individually referred to as a "Fund" and collectively, the
"Funds"); and
WHEREAS, each Corporation, on behalf of the Funds listed on Schedule A, as such
Schedule A may be amended from time to time, have adopted a Multiple Class Plan
pursuant to Rule 18f-3 under the 1940 Act ("Plan"); and
WHEREAS, each Corporation, on behalf of the Funds, employs Strong Capital
Management, Inc. ("SCM") as its investment adviser, administrator, and transfer
agent and Strong Investments, Inc. (the "Distributor") as distributor of the
securities of the Funds; and
WHEREAS, the Board of Directors of each Corporation, including a majority of
the Directors of the Corporation who are not "interested persons", as defined
in the 1940 Act, of the Corporation, SCM, or the Distributors ("Independent
Directors") have found the Plan, as proposed, to be in the best interests of
each class of shares individually, each Fund, and the Corporation as a whole;
and
WHEREAS, certain Funds, as of the effective date of this Plan, have in
registration a Prospectus, which Prospectus, when effective, shall offer
Advisor Class Shares for certain Funds that are subject to a front-end sales
load and other Advisor Class Shares that are not subject to a sales load; and
WHEREAS, each Corporation desires to amended the Plan to cover any Advisor
Class Shares that are offered subject to a sales load without otherwise
affecting any other class of shares covered by this Plan;
NOW, THEREFORE, each Corporation, on behalf of the Funds, hereby adopts the
Plan, in accordance with Rule 18f-3 under the 1940 Act on the following terms
and conditions:
1. FEATURES OF THE CLASSES. Each of the Funds shall offer, at the
discretion of the Board and as indicated on Schedule A, up to three classes of
shares: "Investor Class Shares," "Institutional Class Shares," and "Advisor
Class Shares." Shares of each class of a Fund shall
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represent an equal pro rata interest in such Fund and, generally, shall have
identical voting, dividend, distribution, liquidation, and other rights,
preferences, powers, restrictions, limitations, qualifications, and terms and
conditions, except that: (a) each class shall have a different designation; (b)
each class of shares shall bear any Class Expenses, as defined in Section 3
below; (c) each class shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its distribution arrangements;
and (d) each class shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the interests of
any other class. In addition, Investor Class, Institutional Class, and Advisor
Class shares of a Fund shall have the features described in Sections 2, 3, and
4 below.
2. DISTRIBUTION FEE STRUCTURE.
(a) INVESTOR CLASS SHARES. Investor Class Shares of a Fund shall be
offered at their then current net asset value ("NAV") without the imposition of
an initial sales charge, contingent deferred sales charge, asset-based sales
charge or service fee under a Distribution Plan (as defined below).
(b) INSTITUTIONAL CLASS SHARES. Institutional Class Shares of a Fund shall
be offered at their then current NAV without the imposition of an initial sales
charge, contingent deferred sales charge, asset-based sales or service fee
under a Distribution Plan (as defined below).
(c) ADVISOR CLASS SHARES. Advisor Class Shares of a Fund shall be offered
at their then current NAV plus any applicable sales charge as indicated in each
Fund's prospectus. The Corporation has adopted, on behalf of the Funds, a
distribution plan with respect to the Advisor Class shares of each Fund, if
any, pursuant to Rule 12b-1 under the 1940 Act ("Distribution Plan"). The
Distribution Plan authorizes a Fund to make payments for distribution services
and shareholder services at an annual rate of up to 1.00% of a Fund's average
daily net assets attributable to Advisor Class shares.
3. ALLOCATION OF INCOME AND EXPENSES.
(a) The NAV of all outstanding shares representing interests in a Fund
shall be computed on the same days and at the same time. For purposes of
computing NAV, the gross investment income of each Fund shall be allocated to
each class on the basis of the relative net assets of each class at the
beginning of the day adjusted for capital share activity for each class as of
the prior day as reported by the Fund's transfer agent. Realized and
unrealized gains and losses for each class will be allocated based on relative
net assets at the beginning of the day, adjusted for capital share activity for
each class of the prior day, as reported by the Fund's transfer agent. To the
extent practicable, certain expenses, (other than Class Expenses as defined
below, which shall be allocated more specifically), shall be allocated to each
class based on the relative net assets of each class at the beginning of the
day, adjusted for capital share activity for each class as of the prior day, as
reported by the Fund's transfer agent. Allocated expenses to each class shall
be subtracted from allocated gross income. These expenses include:
(1) Expenses incurred by a Corporation (for example, fees of Directors,
auditors, insurance costs, and legal counsel) that are not attributable to a
particular Fund or class of shares of such Fund ("Corporation Level Expenses");
and
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(2) Expenses incurred by each Fund that are not attributable to any
particular class of the Fund's shares (for example, advisory fees, custodial
fees, banking charges, organizational costs, or other expenses relating to the
management of the Fund's assets) ("Fund Expenses").
(b) CLASS EXPENSES. Expenses attributable to a particular class ("Class
Expenses") shall be limited to: (i) payments made pursuant to a Distribution
Plan; (ii) transfer agent fees attributable to a specific class; (iii) printing
and postage expenses related to preparing and distributing materials such as
shareholder reports, prospectuses and proxies to current shareholders of a
specific class; (iv) the expense of administrative personnel and services to
support the shareholders of a specific class, including, but not limited to,
fees and expenses under an administrative service agreement; (v) litigation or
other legal expenses relating solely to one class; and (vi) directors' fees
incurred as a result of issues relating to one class. Expenses in category (i)
above must be allocated to the class for which such expenses are incurred. All
other "Class Expenses" listed in categories (ii)-(vi) above may be allocated to
a class but only if an officer of the Corporation has determined, subject to
Board approval or ratification, which of such categories of expenses will be
treated as Class Expenses consistent with applicable legal principles under the
1940 Act and the Internal Revenue Code of 1986 ("Code").
(c) Therefore, expenses of the Fund shall be apportioned to each class of
shares depending on the nature of the expense item. Corporation Level Expenses
and Fund Expenses shall be allocated among the classes of shares based on their
relative NAVs. Approved Class Expenses shall be allocated to the particular
class to which they are attributable. In addition, certain expenses may be
allocated differently if their method of imposition changes. Thus, if a Class
Expense can no longer be attributed to a class, it shall be charged to the Fund
for allocation among the classes, as determined by the Board of Directors. Any
additional Class Expenses not specifically identified above that are
subsequently identified and determined to be properly allocated to one class of
shares shall not be so allocated until approved by the Board of Directors of
the Corporation in light of the requirements of the 1940 Act and the Code.
4. EXCHANGE PRIVILEGES. The Investor Class, Institutional Class, and
Advisor Class shares of a Fund may be exchanged at their relative NAVs, without
the imposition of any sales charge applicable to the Advisor Class shares,
except as described below, for: (i) Investor Class, Institutional Class, or
Advisor Class shares of the same Fund; (ii) Investor Class, Institutional
Class, or Advisor Class shares of another Strong Fund; or (iii) if the Strong
Fund does not have multiple classes of shares, the existing shares of another
Strong Fund. Notwithstanding the foregoing, exchanges of Advisor Class shares
of a Strong Fund that does not charge an initial sales load into Advisor Class
shares of another Strong Fund that does charge an initial sales load will be
subject to a sales charge. Purchases of Fund shares by exchange are subject to
the same minimum investment requirements and other criteria imposed for
purchases made in any other manner.
5. CONVERSION FEATURES. There shall be no conversion features associated
with the Investor Class, Institutional Class, or Advisor Class shares of a
Fund.
6. QUARTERLY AND ANNUAL REPORT. The Directors shall receive quarterly and
annual written reports concerning all allocated Class Expenses and expenditures
under the Distribution
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Plan complying with paragraph (b)(3)(ii) of Rule 12b-1. The reports, including
the allocations upon which they are based, shall be subject to the review and
approval of the Independent Directors in the exercise of their fiduciary
duties.
7. WAIVER OR REIMBURSEMENT OF EXPENSE. Expenses may be waived or
reimbursed by SCM or any other provider of services to the Funds without the
prior approval of a Corporation's Board of Directors.
8. EFFECTIVENESS OF PLAN. The Plan shall not take effect until it has been
approved by votes of a majority of both (a) the Directors of the Corporation
and (b) those Directors of the Corporation who are not "interested persons" of
the Corporation, SCM, or the Distributor (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of this Plan,
cast in person at a meeting (or meetings) called for the purpose of voting on
this Plan.
9. MATERIAL MODIFICATIONS. This Plan may not be amended to materially
modify its terms unless such amendment is approved in the manner provided for
initial approval in Paragraph 8 hereof.
10. LIMITATION OF LIABILITY. The Directors of each Corporation and the
shareholders of the Funds shall not be liable for any obligations of the Funds
under this Plan, and any person in asserting any rights or claims under this
Plan shall look only to the assets and property of the Funds in settlement of
such right or claim and not to such Directors or shareholders.
On behalf of each Corporation Listed on Schedule A.
By:
Name:
Title:
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SCHEDULE A
The Funds of the Corporation currently subject to this Multiple Class Plan are
as follows:
<TABLE>
<CAPTION>
<S> <C>
Date of Addition
CORPORATION/FUND/CLASS TO THIS MULTIPLE CLASS PLAN
- -----------------------------------------------------
Strong Advantage Fund, Inc. January 28, 2000
-Strong Advantage Fund
* Investor Class
* Advisor Class
* Institutional Class
Strong Corporate Bond Fund, Inc. January 28, 2000
-Strong Corporate Bond Fund
* Investor Class
* Advisor Class
* Institutional Class
Strong Government Securities Fund, Inc. January 28, 2000
-Strong Government Securities Fund
* Investor Class
* Advisor Class
* Institutional Class
Strong Heritage Reserve Series, Inc. January 28, 2000
-Strong Heritage Money Fund
* Investor Class
* Advisor Class
* Institutional Class
-Strong Investors Money Fund
Strong Income Funds, Inc. January 28, 2000
-Strong High-Yield Bond Fund
* Investor Class
* Advisor Class
-Strong Short-Term High Yield Bond Fund
* Investor Class
* Advisor Class
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Strong Income Funds II, Inc. January 28, 2000
-Strong Bond Fund
* Investor Class
* Advisor Class
* Institutional Class
Strong Money Market Fund, Inc. January 28, 2000
Strong Municipal Funds, Inc. January 28, 2000
-Strong Short-Term High Yield Municipal Fund
* Investor Class
* Advisor Class
-Strong Municipal Advantage Fund
-Strong Municipal Money Market Fund
Strong Short-Term Bond Fund, Inc. January 28, 2000
-Strong Short-Term Bond Fund
* Investor Class
* Advisor Class
* Institutional Class
Strong Asset Allocation Fund, Inc. January 28, 2000
Strong Common Stock Fund, Inc. January 28, 2000
Strong Conservative Equity Funds, Inc. January 28, 2000
-Strong American Utilities Fund
-Strong Blue Chip 100 Fund
* Investor Class
* Advisor Class
-Strong Equity Income Fund
-Strong Growth and Income Fund
* Investor Class
* Advisor Class
* Institutional Class
-Strong Limited Resources Fund
January 28, 2000
Strong Discovery Fund, Inc.
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
Strong Equity Funds, Inc. January 28, 2000
-Strong Enterprise Fund
* Investor Class
* Advisor Class
-Strong Growth Fund
* Investor Class
* Advisor Class
* Institutional Class
-Strong Growth 20 Fund
* Investor Class
* Advisor Class
-Strong Mid Cap Disciplined Fund
-Strong Mid Cap Growth Fund
-Strong Small Cap Value Fund
-Strong Strategic Growth Fund
-Strong U.S. Emerging Growth Fund
Strong Opportunity Fund, Inc. January 28, 2000
-Strong Opportunity Fund
* Investor Class
* Advisor Class
Strong High-Yield Municipal Bond Fund, Inc. January 28, 2000
-Strong High-Yield Municipal Bond Fund
* Investor Class
* Advisor Class
Strong Municipal Bond Fund, Inc. January 28, 2000
-Strong Municipal Bond Fund
* Investor Class
* Advisor Class
Strong Short-Term Municipal Bond Fund, Inc. January 28, 2000
-Strong Short-Term Municipal Bond Fund
* Investor Class
* Advisor Class
Strong Total Return Fund, Inc. January 28, 2000
</TABLE>
<PAGE>
STRONG DISCOVERY FUND, INC.
POWER OF ATTORNEY
Each person whose signature appears below, constitutes and appoints
Stephen J. Shenkenberg and John S. Weitzer, and each of them, his true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign this Registration Statement on Form N-1A, and any and all
amendments thereto, and to file the same, with all exhibits, and any other
documents in connection therewith, with the Securities and Exchange Commission
and any other regulatory body granting unto said attorney-in-fact and agent,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes, as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
<TABLE>
<CAPTION>
<S> <C> <C>
NAME TITLE DATE
- -------------------------- ------------------------------------------ ---------------
/s/Stephen J. Shenkenberg Vice President March 9, 2000
Stephen J. Shenkenberg
Chairman of the Board (Principal Executive
/s/Richard S. Strong Officer) and a Director March 9, 2000
- --------------------------
Richard S. Strong
Treasurer (Principal Financial and
/s/John W. Widmer Accounting Officer) March 9, 2000
John W. Widmer
/s/Marvin E. Nevins Director March 9, 2000
- --------------------------
Marvin E. Nevins
/s/Willie D. Davis Director March 9, 2000
- --------------------------
Willie D. Davis
/s/William F. Vogt Director March 9, 2000
- --------------------------
William F. Vogt
/s/Stanley Kritzik Director March 9, 2000
- --------------------------
Stanley Kritzik
/s/Neal Malicky Director March 9, 2000
- --------------------------
Neal Malicky
</TABLE>
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