Registration No. 33-37959
________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. __ [_]
Post-Effective Amendment No. 8 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 9 [X]
(Check appropriate box or boxes.)
BRANDYWINE BLUE FUND, INC.
(Exact name of Registrant as Specified in Charter)
3908 Kennett Pike
Greenville, Delaware 19807
(Address of Principal Executive Offices) (Zip Code)
(302) 656-3017
(Registrant's Telephone Number, including Area Code)
Copy to:
Foster S. Friess W. David Knox, II
350 Broadway Foley & Lardner
P. O. Box 576 777 East Wisconsin Avenue
Jackson, Wyoming 83001 Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable
after the Registration Statement becomes effective.
It is proposed that this filing become effective (check appropriate box):
[_] immediately upon filing pursuant to paragraph (b)
[X] on January 30, 1998 pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2)
[_] 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.
<PAGE>
BRANDYWINE BLUE FUND, INC.
CROSS REFERENCE SHEET
(Pursuant to Rule 481 showing the location in the Prospectus and
the Statement of Additional Information of the responses to the Items of
Parts A and B of Form N-1A.)
Caption or Subheading in Prospectus
Item No. on Form N-1A or Statement of Additional Information
Part A - INFORMATION REQUIRED IN PROSPECTUS
1. Cover Page Cover Page
2. Synopsis Expense and Fees
3. Condensed Financial Financial Highlights; Performance
Information Information
4. General Description Financial Highlights; Investment
of Registrant Objectives and Policies
5. Management of the Management of the Fund
5A. Management's Discussion Performance Information; Management's
of Fund Performance Discussion of Fund Performance
6. Capital Stock and Financial Highlights; Dividends,
Other Securities Distributions and Taxes; Shareholder
Statements and Reports
7. Purchase of Securities Determining Net Asset Value; About Our
Being Offered Minimum Requirement For Initial
Investment; Investing with Brandywine
Blue Fund; Account Services and
Policies
8. Redemption or Investing with Brandywine Blue Fund;
Repurchase Account Services and Policies
9. Legal Proceedings *
PART B - INFORMATION REQUIRED IN STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and *
History
13. Investment Objectives Investment Restrictions
and Policies
14. Management of the Directors and Officers of the Fund
Registrant
15. Control Persons and Included in Prospectus under "Capital
Principal Holders Structure"; Principal Stockholders
of Securities
16. Investment Advisory Included in Prospectus under
and Other Services "Management of the Fund"; Investment
Adviser; Service Agreement; Custodian;
Independent Accountants
17. Brokerage Allocation Allocation of Portfolio Brokerage
18. Capital Stock and Included in Prospectus under
Other Securities "Financial Highlights"
19. Purchase, Redemption Included in Prospectus under
and Pricing of "Determining Net Asset Value";
Securities Being "About Our Minimum Requirement for
Offered Initial Investment"; "Investing with
Brandywine Blue Fund"; "Account
Services and Policies"; Determination
of Net Asset Value and Performance;
Purchase of Shares; Systematic
Withdrawal Plan
20. Tax Status Taxes
21. Underwriters *
22. Calculations of Per- Determination of Net Asset Value and
formance Data Performance
23. Financial Statements Financial Statements
____________________________
*Answer negative or inapplicable
<PAGE>
BRANDYWINE BLUE FUND, INC.
(BRANDYWINE LOGO)
Brandywine Blue Fund, Inc.
3908 Kennett Pike
Greenville, Delaware 19807
Email: [email protected]
Website: www.brandywinefunds.com
1-800-656-3017 or 1-414-765-4124
PROSPECTUS
JANUARY 30, 1998
BRANDYWINE BLUE FUND, INC.
(BRANDYWINE LOGO)
Brandywine Blue Fund, Inc.
3908 Kennett Pike
Greenville, Delaware 19807
Email: [email protected]
Website: www.brandywinefunds.com
1-800-656-3017 or 1-414-765-4124
TABLE OF CONTENTS
EXPENSES AND FEES 2
FINANCIAL HIGHLIGHTS 3
INVESTMENT OBJECTIVES AND
POLICIES 4
MANAGEMENT OF THE FUND 8
DETERMINING NET ASSET VALUE 8
ABOUT OUR MINIMUM REQUIREMENT
FOR INITIAL INVESTMENT 9
INVESTING WITH BRANDYWINE
BLUE FUND 9
How to Open Your Brandywine
Blue Fund Account 9
How to Buy Additional Shares in
Brandywine Blue Fund 11
How to Sell Shares in
Brandywine Blue Fund 12
Payment of Redemption Proceeds 13
How to Exchange Shares 13
Dividend and Distribution Options 14
DIVIDENDS, DISTRIBUTIONS,
AND TAXES 15
SHAREHOLDER STATEMENTS
AND REPORTS 15
PERFORMANCE INFORMATION 16
MANAGEMENT'S DISCUSSION OF
FUND PERFORMANCE 17
ACCOUNT SERVICES AND POLICIES 18
PURCHASE APPLICATION 19
BOARD OF DIRECTORS
John E. Burris
Chairman, Burris Foods, Inc.
Milford, Delaware
Foster S. Friess
President, Friess Associates, Inc.
Jackson, Wyoming
Stig Ramel
President, Nobel Foundation 1972 to 1992
Stockholm, Sweden
INVESTMENT ADVISER
Friess Associates, Inc.
115 East Snow King Avenue
P.O. Box 576
Jackson, Wyoming 83001
FUND ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
LIKE ALL MUTUAL FUND SHARES, 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.
Thank you for your interest in Brandywine Blue Fund. The Friess Associates
teammates who invest and manage the Fund have tried to make this prospectus easy
to understand. We hope you will take the time to read it carefully before you
invest and keep it on hand for future reference.
Brandywine Blue Fund, Inc. (the "Fund") is open to new investors, charges no
sales or marketing fees, and invests in a wide range of industries and
companies. The terms often used to describe it are "open-end," "no-load," and
"diversified." It is also known as a management investment company. Its primary
investment objective is to produce long-term capital appreciation mainly through
investing in common stocks. Current income is a secondary consideration.
If you are investing for retirement or another longer term goal, you may want
to invest in Brandywine Blue Fund. If you may need to redeem your shares in a
hurry, or if you are uncomfortable with an investment that will go up and down
in value, the Fund probably is not the right choice for you.
Read on. We hope you will find that this prospectus answers all of your
questions and it may even be enjoyable reading.
/s/ Foster Friess
Foster Friess
President
The Fund has filed a Statement of Additional Information, dated January 30,
1998, with the Securities and Exchange Commission. The contents of the
Statement of Additional Information are considered to be part of the prospectus
(i.e., incorporated by reference). To obtain a copy, call 1-800-656-3017 or 1-
414-765-4124.
You should be aware that the Securities and Exchange Commission maintains a
website (http://www.sec.gov) that contains the Statement of Additional
Information, material we have incorporated by reference into the prospectus, and
other information about the Fund and other registrants that file electronically
with the Commission.
EXPENSES AND FEES
STOCKHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases or Reinvested Dividends None
Deferred Sales Load None
Redemption Fee None*
<F1>
Exchange Fee None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees 1.00%
12b-1 Fees None
Other Expenses 0.08%
----
Total Fund Operating Expenses 1.08%
====
*<F1>A fee of $12.00 is charged for each wire redemption.
Example:
1 Year 3 Years 5 Years 10 Years
----- ------ ------ -------
An investor would pay the following
expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at
the end of each time period: $11 $34 $60 $132
THESE EXAMPLES ARE FOR COMPARISON PURPOSES ONLY AND ARE NOT MEANT TO
REPRESENT YOUR ACTUAL INVESTMENT RESULTS OR EXPENSES, WHICH MAY VARY.
The "Other Expenses" referred to above are primarily the servicing of
shareholder accounts, such as providing statements and reports, disbursing
dividends, and providing custodial services, together with necessary
registration, accounting, and legal costs.
For more details on Fund expenses, please see the section titled, "Management
of the Fund" on page 8.
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each
period.)
The Financial Highlights of the Fund, which have been audited, should be read
along with the Fund's audited financial statements and notes, included in the
Fund's Annual Report to Shareholders which contains the auditor's report as to
the Financial Highlights. The Fund's audited financial statements, notes and
auditor's report contained in the Fund's Annual Report to Shareholders are
incorporated by reference into the Statement of Additional Information. Further
information about the performance of the Fund is also contained in the Fund's
Annual Report to Shareholders, copies of which may be obtained, without charge,
upon request. To obtain a copy, call 1-800-656-3017 or 1-414-765-4124.
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991+<F2>
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $25.26 $24.37 $17.18 $19.11 $12.95 $13.09 $10.01
Income from investment operations:
Net investment (loss) income (0.10)(1) (0.05)(1) 0.00 0.04 (0.06) (0.04) 0.03
Net realized and unrealized gains on <F3> <F3>
investments 10.62 2.05 7.30 0.36 6.22 0.52 3.05
------ ------ ------ ------ ------ ------ ------
Total from investment operations 10.52 2.00 7.30 0.40 6.16 0.48 3.08
Less distributions:
Dividend from net investment income -- -- -- -- -- (0.03) --
Distributions from net realized gains -- (1.11) (0.11) (2.33) -- (0.59) --
------ ------ ------ ------ ------ ------ ------
Total from distributions -- (1.11) (0.11) (2.33) -- (0.62) --
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $35.78 $25.26 $24.37 $17.18 $19.11 $12.95 $13.09
====== ====== ====== ====== ====== ====== ======
Total Investment Return 41.6% 8.9% 42.8% 2.8% 47.6% 4.0% 45.1%*<F4>
Ratios/Supplemental Data:
Net assets, end of period (in 000's $) 617,362 351,459 164,943 29,086 6,373 4,270 3,975
Ratio of expenses (after reimbursement)
to average net assets**<F5> 1.08% 1.13% 1.31% 1.80% 2.00% 2.00% 1.97%*<F4>
Ratio of net investment (loss)
income to average net assets***<F6> (0.5%) (0.4%) (0.4%) (0.4%) (0.6%) (0.3%) 0.6%*<F4>
Portfolio turnover rate 202.1% 196.9% 174.1% 220.3% 144.3% 191.9% 115.3%*<F4>
Average commission rate paid****<F7> $0.0593 $0.0599 -- -- -- -- --
+<F2>For the period from January 10, 1991 (commencement of operations) to
September 30, 1991.
(1)<F3>Net investment loss per share is calculated using ending balances
prior to consideration of adjustments for permanent book and tax differences.
* <F4>Annualized.
** <F5>Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratio would have been
2.09% and 2.44% for the years ended September 30, 1993 and 1992, respectively,
and 3.00%*<F4> for the period ended September 30, 1991.
***<F6>The ratio of net investment income (loss) prior to adviser's expense
limitation undertaking to average net assets for the years ended September 30,
1993 and 1992 and for the period ended September 30, 1991 would have been
(0.7%), (0.7%) and (0.5%)*<F4>, respectively.
****<F7>Disclosure required for fiscal years beginning after September 1,
1995.
</TABLE>
HOW TO READ THE FINANCIAL
HIGHLIGHTS TABLE
Brandywine Blue Fund began fiscal 1997 with its net asset value (price) at
$25.26 per share. During the fiscal year ending September 30, 1997, the Fund
lost $0.10 per share from investment operations because our investment income
(interest and dividends) was less than our expenses and gained $10.62 per share
from investments that had appreciated in value, whether or not they had been
sold. This resulted in net gain of $10.52 per share. There were no
distributions paid to shareholders. The gain in net asset value ($10.52 per
share) resulted in a share price of $35.78 at the fiscal year ending September
30, 1997. Total return from the Fund was 41.6% for the fiscal year ending
September 30, 1997.
For the year ending September 30, 1997, Brandywine Blue Fund had an expense
ratio of 1.08% ($10.80 per $1,000 of average net assets); and net investment
loss was .5% of its average net assets. The Fund had a portfolio turnover rate
of 202.1% of its average net assets (see page 6 for definition of turnover
rate). At September 30, 1997, Brandywine Blue Fund had $617 million in net
assets.
BUSINESS STRUCTURE
Brandywine Blue Fund, Inc. was incorporated under the laws of Maryland on
November 13, 1990. The Fund is an open-end, diversified management investment
company. As such, it pools money from numerous investors and invests the money
to achieve its investment objectives. As an open-end investment company, the
Fund will redeem any of its outstanding shares on demand of the owner at the
next determined net asset value.
The Fund is supervised by a board of directors that has ultimate
responsibility for the Fund's activities. The Fund does not hold annual
shareholder meetings but may hold special meetings for purposes such as electing
or removing board members, changing fundamental policies, or for any other
purposes requiring a shareholder vote under the Investment Company Act of 1940.
Each share outstanding is entitled to one vote.
The Fund's authorized capital consists of 100,000,000 shares of Common Stock.
This number may be increased when necessary, as has been done in the past. The
Fund has no present plans to limit its size.
A WORD ABOUT RISK
Look for this "warning flag" symbol (FLAG) throughout the prospectus. It is
used to mark detailed information about each type of risk that you, as a
shareholder, will confront.
INVESTMENT OBJECTIVES AND POLICIES
THE FUND'S PRIMARY
INVESTMENT OBJECTIVE
The primary investment objective of the Fund is to produce long-term
appreciation of capital principally through investing in common stocks. Current
income is less important. The Fund is designed for investors who wish to limit
their investments to larger, well-established but dynamic companies with
potential for growth in share value.
Friess Associates, Inc. (the "Adviser"), anticipates that most of the time at
least 70% of the Fund's portfolio will be invested in common stocks of blue chip
companies having market capitalizations above $500,000,000 and offering
potential for growth through new products, acquisitions, divestitures, changes
in management, new legislation, or other similar phenomena. These companies may
be included in the Fortune 500 or Russell 1000 lists of America's largest
companies or the Dow-Jones or S&P 500 stock indexes, but they will probably not
be the largest, most researched companies in their industries.
Not more than 5% of the Fund's net assets may be invested in securities of
unseasoned companies, defined as companies having a record of less than three
years of continuous operation, including any business already in existence
before it was added to a company through a merger, consolidation,
reorganization, or purchase. (FLAG) The investment risks associated with these
securities may be considerably greater than those associated with common stocks
of more established companies.
HOW THE ADVISER SELECTS STOCKS
In selecting investments the Adviser will consider various financial
characteristics of the issuer of the shares of common stock, including
historical sales and net income, and debt/equity and price/earnings ratios. The
Adviser may also review research reports of broker-dealers and trade
publications and may meet with management. The Adviser will give greater weight
to internal factors, such as product or service development, than to external
factors, such as interest rate changes, commodity price fluctuations, general
stock market trends, and foreign currency exchange values. Since the Fund's
primary investment objective is to produce long-term capital appreciation, and
current income is a secondary consideration in the selection of investments, a
particular issuer's dividend history is not a primary consideration.
(FLAG)Investors should be aware that since the major portion of the Fund's
portfolio will normally be invested in common stocks, the Fund's net asset value
may be subject to greater fluctuation than a portfolio containing a substantial
amount of fixed income securities. The Fund can provide no assurance that its
primary objective will be realized or that any income will be earned. Nor can
the Fund assure investors that the Fund's portfolio will not decline in value.
INVESTMENTS OTHER THAN
COMMON STOCKS
Except for temporary defensive purposes, the Fund intends to have at all
times at least 70% of its investments in securities which the Fund's investment
adviser believes offer opportunity for growth of capital. No minimum or maximum
percentage of the Fund's assets is required to be invested in common stocks or
any other type of security. When the Adviser believes that securities other
than common stocks offer opportunity for long-term capital appreciation, the
Fund may invest in publicly distributed debt securities, preferred stocks,
particularly those which are convertible into or carry rights to acquire common
stocks, and warrants, which are long-term rights to acquire common stocks.
Investments in publicly distributed debt securities and nonconvertible preferred
stocks offer an opportunity for growth of capital during periods of declining
interest rates, when the market value of such securities in general increases.
CASH INSTRUMENTS
Except for temporary defensive purposes, cash and money market instruments
will be retained by the Fund only in amounts deemed adequate for current needs
and to permit the Fund to take advantage of investment opportunities. While
maintaining a temporary defensive position, the Fund may invest up to 100% of
its assets in cash and money market instruments. The money market instruments
in which the Fund may invest include conservative fixed-income securities, such
as United States Treasury Bills, certificates of deposit of U.S. banks (provided
that the bank has capital in excess of $100,000,000 in value at the date of
investment), and commercial paper, commercial paper master notes, and repurchase
agreements.
Commercial paper is short-term debt issued by well-established corporations.
Since this debt is unsecured, the Fund will buy commercial paper only of
companies that are very strong financially. The Adviser measures a company's
strength by tracking the rating it has received from Standard & Poor's
Corporation or Moody's Investors Service, Inc., rating agencies which analyze
and grade companies on their ability to pay their debts. All commercial paper
bought by the Fund must be rated A-1 by Standard & Poor's or P1 by Moody's.
Commercial paper master notes differ from commercial paper in that they are
payable in whole or in part at any time, may be prepaid in whole or in part at
any time, and bear interest at variable rates of interest. The Adviser will
also monitor the creditworthiness of the issuer of the commercial paper master
notes while any borrowings are outstanding.
Repurchase agreements are agreements under which the seller of a security
agrees at the time of sale to repurchase the security at an agreed time and
price. The Fund will not enter into repurchase agreements with entities other
than banks or invest over 5% of its assets in repurchase agreements with
maturities of more than seven days.
FOREIGN SECURITIES
The Fund may invest in foreign securities. It will limit to 15% of its
assets investments in securities of foreign issuers traded on U.S. securities
markets or in American Depository Receipts of foreign issuers. Such investments
increase a portfolio's diversification and may enhance return. (FLAG) Such
investments also involve risks which are in addition to the usual risks inherent
in U.S. investments.
In many foreign countries, there is less publicly available information about
issuers than is available in the reports and ratings published about companies
in the United States. Also, foreign companies may not be subject to uniform
accounting, auditing, and financial reporting standards. Dividends and interest
on foreign securities may be subject to foreign withholding taxes, which would
reduce the Fund's income without providing a tax credit for the Fund's
stockholders. Although the Fund intends to invest in securities of issuers
residing in nations with stable and friendly governments, there is the
possibility of expropriation, confiscatory taxation, currency blockage, or
political or social instability which could affect investments in those nations.
TURNOVER RATE AND SELL DISCIPLINE
The Fund does not intend to place emphasis on short-term trading profits,
but, when circumstances warrant, securities will be purchased and sold without
regard to the length of time held. The Adviser expects that the Fund's annual
portfolio turnover rate may approximate 200%. A turnover rate of 200% would
occur, for example, if the Fund replaced securities valued at 100% of its
average total net assets twice within a one-year period. Turnover rate may vary
considerably from year to year. (FLAG) Higher than normal turnover rate will
increase transaction costs and may increase short-term capital gains,
distributions of which will be considered ordinary income for federal income tax
purposes.
The Adviser may decide to sell a particular stock in the Fund portfolio for a
variety of reasons:
Deteriorating fundamentals
Unrealistic expectations
Forced displacement
The policy of forced displacement is central to the sell discipline of the
Adviser and is most indicative of the Adviser's stock selection process. When
the Adviser discovers a company with great potential for growth, the Adviser
sells a company in the Fund's portfolio with lesser appreciation potential and
replaces it with the new company with greater potential.
"We constantly review our portfolio for a great company to replace a good
company."
-- Clarke Adams, Researcher
INVESTMENT POLICIES
Under certain circumstances the Fund may (a) invest in warrants (long-term
rights to acquire stock), (b) temporarily borrow money from banks for emergency
or extraordinary purposes, (c) pledge its assets to secure borrowings, and (d)
purchase securities of other investment companies. All of the circumstances in
which the Fund may engage in these activities are included in the Fund's
Statement of Additional Information (to obtain a copy, call 1-800-656-3017 or
1-414-765-4124).
The Board of Directors may not change the fundamental policies of the Fund
without shareholder approval, but may change the Fund's investment objectives
and other non-fundamental policies. The investment policies listed in the
preceding paragraph are the only fundamental policies described in this
prospectus. (FLAG) If there is a change in investment objective, you should
consider whether the Fund remains an appropriate investment in light of your
then current financial position and needs.
BRANDYWINE BLUE FUND'S BOARD OF DIRECTORS
John E. Burris, Foster S. Friess and Stig Ramel
MANAGEMENT OF THE FUND
ABOUT THE ADVISER
The Board of Directors sets policies and oversees the management for the
Fund. Under an investment advisory agreement (the "Agreement"), Friess
Associates, Inc. (the "Adviser"), 115 East Snow King Avenue, P.O. Box 576,
Jackson, Wyoming 83001, furnishes continuous investment advisory services and
management to the Fund. In addition to the Fund, Friess Associates, Inc. is the
investment adviser to Brandywine Fund, Inc., another mutual Fund, and to
individual and institutional clients with substantial investment portfolios.
Friess Associates, Inc. was organized in 1974 and is wholly owned by Foster S.
Friess and Lynnette E. Friess, who are the sole directors and the sole officers
of Friess Associates, Inc.
INVESTMENT DECISIONS
The Adviser, supervises the investment portfolio of the Fund, directing the
purchase and sale of investment securities in the day to day management of the
Fund. All investment decisions are made by a team of investment professionals
representing the Adviser, any of whom may make recommendations subject to final
approval of Foster S. Friess or another senior member of the Adviser's
management team to whom he may delegate that authority. Mr. Friess has been
President, Treasurer, and a director of both the Fund and Brandywine Fund, Inc.
since their inceptions in 1990 and 1985, respectively. He is also President and
Chairman of the Board of Friess Associates, Inc.
EXPENSES
The Adviser furnishes continuous investment supervision and management to the
Fund and also furnishes office space, equipment, and management personnel. The
Adviser pays the salaries and fees of all officers and directors of the Fund
(except the fees paid to directors not employed by the Adviser). For its
services the Adviser is entitled to a fee, which is calculated daily and paid
monthly, at an annual rate of 1% of the net assets of the Fund.
FUND ADMINISTRATOR, CUSTODIAN AND
TRANSFER AGENT
Under a service agreement with the Fund, Fiduciary Management, Inc.,
Milwaukee, Wisconsin serves as the Fund's administrator and in this capacity is
responsible for (a) calculating daily the Fund's net asset value, (b)
recordkeeping and preparing financial statements, tax returns, and (c) reports
required by the Securities and Exchange Commission. For these services, the
Fund currently pays Fiduciary Management, Inc. an annual fee of $102,000.
Firstar Trust Company of Milwaukee, Wisconsin serves as the Fund's custodian and
transfer agent and is responsible for (a) holding the Fund's assets, (b)
settling all portfolio trades, (c) shareholder accounting, and (d) distributing
dividends.
DETERMINING NET ASSET VALUE
Since the Fund is a pure no-load fund, the share price for purchase or sale
is equal to its net asset value or "NAV," calculated as of the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m., Eastern Time) each
day the New York Stock Exchange is open for business. To calculate the NAV, (a)
the Fund's assets are valued and totaled; (b) liabilities, or debts, are
subtracted; and (c) the balance, called net assets, is divided by the number of
shares outstanding, that is, the number of shares currently owned by the
shareholders.
TOTAL ASSETS - LIABILITIES
NET ASSET VALUE = ---------------------------
NUMBER OF SHARES OUTSTANDING
If the transfer agent, Firstar Trust Company, receives your request to buy or
to sell shares by the close of regular trading on the New York Stock Exchange,
your transaction will be priced at that day's NAV. If the transfer agent
receives your request after that time, it will be priced at the next business
day's NAV.
The daily net asset value, or NAV, multiplied by the number of Fund shares
you own, gives you the dollar amount you would have received that day had you
sold your shares back to the Fund.
The Fund's share price can be found daily in the mutual fund listings of most
major newspapers under the heading "BrndywBlue" or "BrndywBl." The NASDAQ symbol
is "BLUEX."
ABOUT OUR MINIMUM REQUIREMENT FOR INITIAL INVESTMENT
The Board of Directors has established $100,000 as the minimum initial
investment, which is high compared to other mutual funds. The Fund is intended
for investors with long term investment goals. It is not an appropriate
investment vehicle for market timers who wish to jump in and out of the market.
When the market goes through periods of rapid decline, these market timers will
"head for the hills" and the Fund may need to liquidate assets to redeem their
shares. This could be detrimental to the welfare of other shareholders. A high
minimum investment relies on the commitment of long term investors while
discouraging short term investors. The Fund reserves the right to accept or
refuse any application.
Employees, officers, and directors of the Fund or the Adviser or firms
providing contractual services to the Fund, members of their immediate families
(spouses, siblings, parents, children, and grandchildren), and retirement plans
and trusts for their benefit may purchase shares without regard to the minimum.
The officers of the Fund may, but are not required to, waive or lower the
requirement for charitable organizations and employee benefit plans whose
aggregate investment exceeds the Fund's minimum initial investment. The
officers may also, but are not required to, waive or lower the requirement for
spouses, parents, children, and grandchildren of shareholders under special
circumstances, considering the additional shares to be an extension of the
investment of the first shareholder.
INVESTING WITH BRANDYWINE BLUE FUND
Our goal is to make it easy and pleasant for you to do business with us.
This section will help you become familiar with the many different services we
offer to you as a shareholder.
HOW TO OPEN YOUR BRANDYWINE
BLUE FUND ACCOUNT
1. Read this prospectus carefully.
2. Determine how much you want to invest.
MINIMUM INVESTMENTS ARE AS FOLLOWS:
TO OPEN A NEW ACCOUNT $100,000
TO ADD TO AN EXISTING ACCOUNT $1,000
3. Complete the appropriate parts of the purchase application at the back of
this prospectus, carefully following the instructions. (Additional purchase
applications may be obtained from the Fund.)
Please be sure to provide your Social Security or taxpayer identification
number on the application. If you have questions, please contact our Investor
Service Representatives at 1-800-656-3017 or 1-414-765-4124.
4. Complete the appropriate parts of the account privileges section of the
application. By applying for privileges, such as telephone redemption,
electronic transfer, and wire transfer now, you can avoid the delay and
inconvenience later of having to file an additional request to add these
privileges which would require a signature guarantee.
5. Make your check payable to Brandywine Blue Fund, Inc.
All checks must be drawn on U.S. banks. Brandywine Blue Fund will not accept
checks made payable to third parties.
No cash will be accepted.
TOP TEN HOLDINGS
SEPTEMBER 30, 1997
1. Compaq Computer Corp.
2. EMC Corp.
3. BMC Software, Inc.
4. Computer Associates
International, Inc.
5. National Semiconductor Corp.
6. Bay Networks, Inc.
7. The Dial Corp.
8. Caliber Systems, Inc.
9. Conseco, Inc.
10. Western Digital Corp.
(FLAG)FIRSTAR TRUST COMPANY WILL CHARGE A $20 FEE AGAINST A STOCKHOLDER'S
ACCOUNT FOR ANY PAYMENT CHECK RETURNED TO THE CUSTODIAN. THE STOCKHOLDER WILL
ALSO BE RESPONSIBLE FOR ANY LOSSES SUFFERED BY THE FUND AS A RESULT.
6. Send application and check to:
BY MAIL
FOR U.S. POSTAL SERVICE:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
P. O. Box 701
Milwaukee, WI 53201-0701
FOR OVERNIGHT CARRIER:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
615 E Michigan St., 3rd Floor
Milwaukee, WI 53202-5207
PLEASE DO NOT MAIL LETTERS BY OVERNIGHT CARRIER TO THE POST OFFICE BOX
ADDRESS.
The price per share will be the next determined per share net asset value
after receipt of your application by Firstar Trust Company.
BY WIRE
If you wish to open an account by wire, please call 1-800-656-3017 or 1-414-
765-4124 prior to sending the wire in order to obtain a confirmation number and
to ensure prompt and accurate handling of funds. Wired funds must be received
prior to 4:00 p.m. Eastern time to be eligible for same day pricing. Send a
properly signed share purchase application marked "FOLLOW UP."
THE FUND AND ITS TRANSFER AGENT ARE NOT RESPONSIBLE FOR THE CONSEQUENCES OF
DELAYS RESULTING FROM THE BANKING OR FEDERAL RESERVE WIRE SYSTEM, OR FROM
INCOMPLETE WIRING INSTRUCTIONS. APPLICATIONS ARE SUBJECT TO ACCEPTANCE BY THE
FUND AND ARE NOT BINDING UNTIL SO ACCEPTED.
WIRE TO:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA 075000022
CREDIT:
Firstar Trust company
Account 112-952-137
FURTHER CREDIT:
Brandywine Blue Fund, Inc.
(shareholder account number)
(shareholder registration)
OTHER
Shares of the Fund may also be purchased through a registered broker-dealer
who may charge the investor a fee either at the time of purchase or redemption.
The fee, if charged, is retained by the broker-dealer and not remitted to the
Fund or Adviser.
Employee benefit, profit-sharing, or retirement plans (such as 401(k) plans)
may purchase shares of Common Stock through financial institutions or other
service providers ("Processing Intermediaries") which may become stockholders of
record of the shares and which may use procedures and impose restrictions in
addition to or different from those which apply to stockholders who invest
directly in the Fund.
Processing Intermediaries may charge fees or assess other charges for the
services they provide to their customers. Any such fee or charge is retained by
the Processing Intermediary and is not remitted to the Fund or its Adviser.
Program materials provided by the Processing Intermediary should be read by the
individual in conjunction with this Prospectus before investing in such plans.
SHARE CERTIFICATES
Shares are credited to your account and certificates are not issued unless
you request them by writing to:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
P. O. Box 701
Milwaukee, WI 53201-0701
HOW TO GET IN TOUCH WITH BRANDYWINE BLUE FUND
If you have any questions, please call one of our Investor Service
Representatives at:
1-800-656-3017 or
1-414-765-4124
Monday - Friday 8:00 a.m. - 7:00 p.m. CST
HOW TO BUY ADDITIONAL SHARES IN
BRANDYWINE BLUE FUND
You may purchase additional shares (in amounts over $1,000) by mailing your
check with an Invest-By-Mail form detached from your confirmation statement to
the address listed on the form or by following the wiring instructions on page
10. The Fund does not accept telephone orders for purchase of shares.
Make your check payable to:
Brandywine Blue Fund, Inc.
All checks must be drawn on U.S. banks. Brandywine Blue Fund will not accept
checks made payable to third parties.
No cash will be accepted.
NOTE:
If you buy or sell Fund shares through a registered broker-dealer, the
broker-dealer may charge you a service fee, no part of which is returned to the
Fund. The shareholder will receive the net asset value next calculated after
the broker-dealer receives the purchase or redemption order.
In the case of an account established through a plan with a financial
institution or service provider ("Processing Intermediary"), additional shares
of Common Stock may be purchased by the plan through the Processing Intermediary
without regard to the Fund's minimum subsequent purchase amounts.
HOW TO SELL SHARES IN
BRANDYWINE BLUE FUND
IMPORTANT TAX NOTE:
ANY SALE OR EXCHANGE OF SHARES IN A NON-RETIREMENT ACCOUNT COULD RESULT IN A
TAXABLE GAIN OR LOSS. THE RECEIPT OF PROCEEDS OF THE REDEMPTION OF SHARES HELD
IN AN IRA WILL CONSTITUTE A TAXABLE DISTRIBUTION OF BENEFITS FROM THE IRA UNLESS
A QUALIFYING ROLLOVER CONTRIBUTION IS MADE.
You may sell (redeem) some or all of your shares at any time during normal
business hours. IF YOU HOLD THE CERTIFICATES FOR YOUR SHARES, YOU MUST RETURN
THE CERTIFICATES, PROPERLY ENDORSED, WITH OR BEFORE YOUR REDEMPTION REQUEST.
YOU WILL NEED TO ASSEMBLE THE FOLLOWING INFORMATION:
the account number(s)
the amount of money or number of shares being redeemed
the names on the account
your daytime phone number
the signature(s) of all registered account owners, if you plan to request a
redemption in writing
a signature guarantee is also required under special circumstances,
including...
1. If you wish the check to be sent to an address or person other than as
registered with the Fund.
2. You would like the check mailed to an address which has been changed
within 30 days of the redemption request.
additional documentation may be required for redemptions by corporations,
executors, administrators, trustees, guardians, or others who hold shares in a
fiduciary or representative capacity. Contact the Fund's Transfer Agent,
Firstar Trust Company, in advance at 1-800-656-3017 or 1-414-765-4124.
TO OBTAIN A SIGNATURE GUARANTEE
A signature guarantee assures that a signature is genuine. It protects
shareholders from unauthorized account transfers. The following financial
institutions may guarantee signatures: banks, trust companies, a member firm of
the New York Stock Exchange or other national securities exchange. A NOTARIZED
SIGNATURE IS NOT ACCEPTABLE.
SEND A LETTER OF INSTRUCTION
Include with your letter the necessary information you have already
assembled.
THE PRICE YOU WILL RECEIVE FOR YOUR SHARES
The redemption price per share is the next determined net asset value after
Firstar Trust Company, the Fund's transfer agent, receives your written request
in proper form with all the required information.
BY MAIL
FIRST-CLASS MAIL TO:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
P.O. Box 701
Milwaukee, WI 53201-0701
OVERNIGHT OR REGISTERED MAIL TO:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
615 E Michigan St., 3rd Floor
Milwaukee, WI 53202-5207
PLEASE DO NOT MAIL LETTERS BY OVERNIGHT CARRIER TO THE POST OFFICE BOX
ADDRESS.
BY TELEPHONE
You must instruct Firstar Trust Company, in writing, that you wish to be able
to make telephone redemptions, before you can redeem by telephone.
With this option, you just...
Call Firstar Trust Company at 1-800-656-3017 or 1-414-765-4124.
PLEASE DO NOT CALL THE FUND'S ADVISER.
REDEMPTION BY TELEPHONE IS NOT AVAILABLE FOR IRA ACCOUNTS OR WHEN SHARE
CERTIFICATES HAVE BEEN ISSUED FOR AN ACCOUNT.
AUTOMATICALLY
The Systematic Withdrawal Plan option may be activated if you have a minimum
of $100,000 in your Fund account. This option allows you to redeem a specific
dollar amount from your account on a regular basis. You may vary the amount or
frequency of withdrawal payments or temporarily discontinue them. For more
information or to request the appropriate form, please call Firstar Trust
Company at 1-800-656-3017 or 1-414-765-4124.
PAYMENT OF REDEMPTION PROCEEDS
A CHECK WILL BE MAILED TO YOU
A check in payment for your redeemed shares will be mailed to you at your
address of record no later than the seventh day after Firstar Trust Company
receives your valid request.
Exception: If the shares being redeemed were purchased by check, the Fund
may delay the payment of your redemption proceeds until it is reasonably
satisfied the check has cleared. This normally may take up to 3 days for local
personal or corporate checks and up to 7 days for other personal or corporate
checks.
ELECTRONIC TRANSFERS
If you have established this option, your redemption proceeds can be
electronically transferred to your designated bank account. An Electronic Funds
Transfer ("EFT") generally takes up to 3 business days to reach the
stockholder's bank account. There is no fee for this option.
BY WIRE
If you have established this option, your redemption proceeds can be wired
directly into your designated bank account. The transfer agent, Firstar Trust
Company, currently charges a $12 fee for each wire, which is deducted from the
stockholder's account.
HOW TO EXCHANGE SHARES
You may exchange shares in Brandywine Blue Fund for shares in Brandywine
Fund, another mutual fund managed by the Adviser, providing the shares exchanged
have a value of at least $25,000, the minimum required by that Fund. Before
exchanging your shares, you should first obtain and carefully read the
prospectus for Brandywine Fund and you should consider the tax consequences if
yours is a taxable account.
IMPORTANT TAX NOTE:
WHEN YOU EXCHANGE SHARES OF BRANDYWINE BLUE FUND FOR SHARES OF BRANDYWINE
FUND, YOU ARE SELLING YOUR SHARES OF BRANDYWINE BLUE FUND AND BUYING SHARES OF
BRANDYWINE FUND. FOR FEDERAL INCOME TAX PURPOSES, SUCH AN EXCHANGE IS A TAXABLE
EVENT IN WHICH YOU MAY REALIZE A CAPITAL GAIN OR LOSS. BEFORE MAKING AN
EXCHANGE REQUEST, YOU SHOULD CONSULT A TAX OR OTHER FINANCIAL ADVISER TO
DETERMINE THE TAX CONSEQUENCES. (This concern does not apply to IRA or other tax
exempt accounts.)
To exchange shares, send your written request along with a completed share
purchase application for Brandywine Fund (found at the back of its prospectus)
to:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
615 East Michigan Street
Milwaukee, Wisconsin 53202
YOU MUST INCLUDE:
Account name
Account number
Amount or number of shares of Brandywine Blue Fund to be exchanged
The registration (both name and address) of the account from which the
exchange is being made and the account to which the exchange is being made must
be identical. The signatures of all registered account owners are required.
At the present time there are no limitations on the number of exchanges a
shareholder can make, and no exchange fee is currently imposed by the Fund on
exchanges. THE FUND DOES NOT PERMIT TELEPHONE EXCHANGES.
DIVIDEND AND DISTRIBUTION OPTIONS
The Fund distributes annually all of its net earnings in the form of
dividends and capital gains as distributions. Most investors have their
dividends and capital gains distributions reinvested in additional shares of the
Fund. When you open an account, you must specify on your application how you
want to receive your distributions. YOU MAY CHANGE YOUR DISTRIBUTION OPTION
ANYTIME BY WRITING OR CALLING THE FUND AT 1-800-656-3017 OR 1-414-765-4124.
You can receive distributions of dividends and capital gains in two ways:
1. REINVESTMENT
Dividends and capital gains are automatically reinvested in additional shares
of the Fund, unless you request them to be paid in cash. You will be advised of
the number of shares purchased and the price following each reinvestment. The
value of shares reinvested is added to the basis of your total investment for
tax purposes.
2. DIVIDENDS AND CAPITAL GAINS IN CASH
Both dividends and capital gains are paid in cash. You may choose to have
such amounts mailed to you, or forwarded by EFT (Electronic Funds Transfer) to
your account.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
As long as the Fund meets the requirements for being a regulated investment
company, which is its intent, it pays no federal income tax on the earnings it
distributes to the shareholders. However, distributions shareholders receive
from the Fund, whether reinvested in additional shares of the Fund or taken as
cash, are taxable in all accounts except tax-exempt accounts.
Income dividends paid to shareholders come from the dividends that the Fund
earns from its holdings as well as interest it receives from its cash
investments, less expenses, and are taxed at ordinary income rates. Capital
gains are realized whenever the Fund sells securities for higher prices than it
paid for them. These capital gains are either short term or long term depending
on how long the Fund held the securities. Distributions to shareholders of
short term capital gains are taxed at ordinary income rates and distributions of
long term capital gains are taxed at varying rates again depending on how long
the Fund held the securities.
THE PRIMARY DISTRIBUTION WILL NORMALLY BE MADE NEAR THE END OF OCTOBER,
FOLLOWING THE CLOSE OF THE FUND'S FISCAL YEAR, WITH A SECOND DISTRIBUTION, IF
REQUIRED, AT THE END OF DECEMBER.
In January, the Fund will mail you Form 1099-DIV detailing your dividends and
distributions and their federal tax status, although you should verify your tax
liability with your tax adviser.
(FLAG) Even if you buy shares shortly before or on the "record date," the
date that establishes you as the person to receive the upcoming distribution,
you will receive the full taxable distribution, which for a taxable investor may
seem an unfair burden on money just invested since it did not participate in the
generation of this distribution. However, offsetting this burden, your future
tax liability will be reduced by this same amount. In any case, you may wish to
consider the Fund's record date before investing.
SHAREHOLDER STATEMENTS AND REPORTS
To help you keep accurate records, we will send you a confirmation
immediately following each transaction you make.
In January, we will send you a clear, concise statement detailing all your
transactions during the year. For taxable accounts, this year-end statement also
includes the 1099-DIV information indicating the tax status of any dividends and
capital gains distributions made to you. Information on the status of your
account is always available by telephone.
Four times a year, the Adviser will send you a report of the Fund's
operations. These comprehensive reports include an assessment of the Fund's
performance, various comparisons to benchmarks, an overview of the markets, a
report from the Adviser, listings of the Fund's holdings, and other items of
interest. The Adviser will also provide interim letters to update shareholders
about important matters.
PERFORMANCE INFORMATION
The Fund's average annual compounded rate of return is the rate of return
which, if applied to an initial investment in the Fund at the beginning of a
stated period and compounded annually over the period, would result in the
redeemable value of the investment in the Fund at the end of the stated period.
The calculation assumes reinvestment of all dividends and distributions and
reflects the effect of all transaction costs and recurring fees such as
management fees and operating expenses, but it ignores individual income tax
consequences to shareholders. The performance of the S&P 500 Index does not
take into consideration any transaction costs, expenses or taxes. The following
chart shows growth of the Fund since its inception based on its fiscal year
ending September 30, 1997.
COMPARISON OF CHANGE IN VALUE OF $100,000 INVESTMENT IN
BRANDYWINE BLUE FUND AND S&P 500 INDEX(1)<F8>
date Brandywine Blue Fund S&P 500 Index
- ---- -------------------- -------------
1/10/91*<F9> $100,000 $100,000
9/30/91 $130,800 $125,100
9/30/92 $136,032 $138,986
9/30/93 $200,783 $157,054
9/30/94 $206,405 $162,708
9/30/95 $294,747 $211,195
9/30/96 $320,979 $254,279
9/30/97 $454,506 $357,771
AVERAGE ANNUAL TOTAL RETURN
1-YEAR +41/6%
5-YEAR +27.3%
Since Inception 1/10/91* <F9> +25.3%
*<F9>inception date
Past performance is not predictive of future performance.
(1)<F8>The Standard & Poor's 500 Index consists of 500 selected common stocks,
most of which are listed on the New York Stock Exchange. The Standard &
Poor's Ratings Group designates the stocks to be included in the Index on a
statistical basis. A particular stock's weighting in the Index is based on
its relative total market value (i.e., its market price per share times the
number of shares outstanding). Stocks may be added or deleted from the Index
from time to time.The Standard & Poor's 500 Index assumes reinvestment of
dividends.
VALUE OF
$100,000 CUMULATIVE
DECEMBER 31 INVESTMENT % CHANGE
------------ ---------- -----------
1991 $140,009 +40.0%
1992 158,390 +58.4
1993 201,473 +101.5
1994 206,135 +106.1
1995 272,775 +172.8
1996 336,144 +236.1
1997 400,854 +300.9
The table on the left shows by CALENDAR YEAR the value of an assumed initial
investment of $100,000 made on January 10, 1991 through December 31, 1997,
assuming reinvestment of all dividends and distributions.
These performance results are historical and should not be considered
indicative of the future performance of the Fund. An investment in the Fund
will fluctuate in value, and at redemption its value may be more or less than
the initial investment.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The principal factor affecting the Fund's performance for the fiscal year,
which ended September 30, 1997, was the selection and purchase by the Adviser of
stocks of companies with earnings growth substantially in excess of the overall
market, in accordance with the investment philosophy described under "Investment
Objectives and Policies."
The increase of 41.6% in share value reflected particularly continuing growth
in technology stock holdings, plus gains in consumer cyclicals and energy-
related stocks. The broader based and larger capitalization S&P 500 Index rose
40.4% for the year, while the more growth-oriented Mutual Fund Index of
Investor's Business Daily increased 19.6% in the period. The Mutual Fund Index
consists of 23 growth-oriented mutual funds selected primarily on the basis of
their size, reputation, and historical performance. For the five-year period
ending September 30, 1997, the Fund's average annual total return was 27.3% as
compared to 20.8% for the S&P 500. Index and 17.6% for Investor's Business
Daily's Mutual Fund Index.
The Fund focused on companies with new products, services, or markets, which
were growing rapidly in an improving economic environment or which were taking
market share from the competition.
Sales of stocks to provide for replacing existing companies with better ones
in line with the Adviser's strategy of "forced displacement," resulted in a
continuing high turnover of 202.1% in the portfolio for the twelve-month period.
HERE IS A LOOK AT THE TOP TEN INDUSTRY GROUPS IN THE FUND PORTFOLIO
AT THE END OF THE FISCAL YEAR, SEPTEMBER 30, 1997.
Software (12.3%)
Computers & Related (11.1%)
Oil/Gas Field Services (10.5%)
Semiconductors & Related (9.8%)
Specialty Retailing (9.6%)
Financial/Business Services (6.2%)
Machinery/Construction &
Miscellaneous Manufacturing (5.5%)
Transportation & Related (5.3%)
Communications (4.2%)
Networking (3.6%)
Cash (1.1%)
All Others (20.8%)
"We talk to customers, competitors, and suppliers of the companies we
target."
-- Bill D'Alonzo,
Researcher
ACCOUNT SERVICES AND POLICIES
IMMEDIATE BALANCE INFORMATION
We offer a 24-hour a day shareholders service. Just call 1-800-656-3017 or
1-414-765-4124 for an update on your account balance or latest share prices.
The Voice Response Unit (VRU) will guide you to your desired information.
Remember to have your account number handy.
WEB SITE
Visit Brandywine Blue Fund's site on the World Wide Web at
www.brandywinefunds.com.
ACCOUNT MINIMUMS
The Fund reserves the right to redeem the shares held in any account, other
than an IRA, if at the time of any exchange or redemption of shares in the
account, the value of the remaining shares in the account falls below $5,000.
The stockholder will be notified that the value of his account is less than the
minimum and allowed at least 60 days to make an additional investment.
TELEPHONE TRANSACTIONS
It may be difficult to reach the Fund by telephone during periods of unusual
market activity. If you are unable to reach a representative by telephone, you
may have to send written instructions.
Neither the Fund nor Firstar Trust Company will be liable for following
instructions for telephone redemption transactions that they reasonably believe
to be genuine, provided reasonable procedures are used to confirm the
genuineness of the telephone instructions, but may be liable for unauthorized
transactions if they fail to follow such procedures. These procedures include
requiring some form of personal identification prior to acting upon the
telephone instructions and recording all telephone calls.
Procedures for telephone redemptions may be modified or terminated at any
time by the Fund or its transfer agent, Firstar Trust Company.
The Fund reserves the right to refuse a telephone redemption request if it is
believed advisable to do so.
ADDRESS CHANGES
To change the address on your account, call Firstar Trust Company at 1-800-
656-3017 or 1-414-765-4124. Any written redemption requests received within 30
days after an address change, whether such address change is made in writing or
by telephone, must be accompanied by a signature guarantee. NO TELEPHONE
REDEMPTIONS WILL BE ALLOWED WITHIN 30 DAYS OF AN ADDRESS CHANGE.
TEMPORARY SUSPENSION OF SERVICES
The Fund can stop selling shares or postpone payment at times when the New
York Stock Exchange is closed or under any emergency circumstances as determined
by the United States Securities and Exchange Commission.
(BRANDYWINE BLUE FUND, INC.)
PURCHASE APPLICATION
--- This is a follow-up application to an investment by wire transfer.
Mail to:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
P.O. Box 701
Milwaukee, WI 53201-0701
Overnight Express Mail to:
Brandywine Blue Fund, Inc.
c/o Firstar Trust Company
Mutual Fund Services
615 E. Michigan St., 3rd Floor
Milwaukee, WI 53202-5207
Use this form for individual, custodial, trust, profit-sharing or pension plan
accounts. For any additional information please call Brandywine Blue Fund, Inc.
at 1-800-656-3017 or 1-414-765-4124.
- ------------------------------------------------------------------------------
A. INVESTMENT Please indicate the amount you wish to invest $ -----------
($100,000 MINIMUM)
- --- By check enclosed payable to Brandywine Blue Fund, Inc. Amount $ ---------
- --- By wire (call first): 1-800-656-3017 or 1-414-765-4124 to set up account.
Indicate total amount and date of wire $ --------------- Date ---------------
- ------------------------------------------------------------------------------
B. REGISTRATION
- --- Individual
- ---------------- --- ---------------- --------------- ----------------
FIRST NAME M.I. LAST NAME SOCIAL SECURITY # BIRTHDATE
(Mo/Dy/Yr)
- --- Joint Owner*<F9> (cannot be a minor)
- ---------------- --- ---------------- --------------- ----------------
FIRST NAME M.I. LAST NAME SOCIAL SECURITY # BIRTHDATE
(Mo/Dy/Yr)
*<F9>Registration will be Joint Tenancy with Rights of Survivorship (JTWROS)
unless otherwise specified.
- --- Gift to Minors
- ------------------------------------------ ---- --------------------------
CUSTODIAN'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME
- --------------------------------------- ---- -----------------------------
MINOR'S FIRST NAME (ONLY ONE PERMITTED) M.I. LAST NAME
- -------------------------- ---------------------------- ------------------
MINOR'S SOCIAL SECURITY # MINOR'S BIRTHDATE (Mo/Dy/Yr) STATE OF RESIDENCE
- --- Corporation**<F5> (including Corporate Pension Plans),**<F10> Trust, Estate
or Guardianship ***<F11>
- ------------------------------------------------------------------------------
NAME OF TRUSTEE(S) (IF TO BE INCLUDED IN REGISTRATION)***<F11>
- --- Partnership***<F11>
- ------------------------------------------------------------------------------
NAME OF TRUST/CORPORATION**<F10>/PARTNERSHIP
- --- Other Entity***<F11>
- ---------------------------------------- -----------------------------------
SOCIAL SECURITY #/TAX ID # DATE OF AGREEMENT (Mo/Dy/Yr)
**<F10>Corporate Resolution is required. ***<F11>Additional documentation and
certification may be requested.
- ------------------------------------------------------------------------------
C. MAILING ADDRESS
- -------------------------------------- -------------------------------------
STREET APT/SUITE
- -------------------------------------- ------- ---------------------------
CITY STATE ZIP
- --------------------------------------- ------------------------------------
DAYTIME PHONE # EVENING PHONE #
- --- Duplicate Confirmation to:
- ------------------------------ ---- --------------------------------------
FIRST NAME M.I. LAST NAME
- -------------------------------------- -------------------------------------
STREET APT/SUITE
- -------------------------------------- ------- ---------------------------
CITY STATE ZIP
- ------------------------------------------------------------------------------
D. DISTRIBUTION OPTIONS
Capital gains & dividends will be reinvested if no option is selected.
--- Capital Gains & Dividends Reinvested
--- Capital Gains & Dividends in Cash
If the distribution is to be paid in cash, specify payment method below:
- --- Send check to mailing address in Section C.
- --- Automatic deposit to my bank account via Electronic Funds Transfer
("EFT"). May take up to 3 business days to reach your bank account (complete
bank information following).
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check (for checking accounts) or a savings account deposit
slip is required with your Application.
- ------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
- ---------------------------------- -----------------------------------------
BANK NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
BANK ADDRESS
To ensure proper crediting of your bank account, please attach a voided check
or a deposit slip.
- ------------------------------------------------------------------------------
E. TELEPHONE REDEMPTION OPTIONS
(800) 656-3017 OR
(414) 765-4124
Your signed Application must be received at least 15 business days prior to
initial transaction.
An unsigned voided check (for checking accounts) or a savings account deposit
slip is required with your Application.
I (we) authorize Brandywine Blue Fund, Inc., to act upon my (our) telephone
instructions to redeem shares from this account. Please check all that may
apply.
- --- The proceeds will be mailed to the address in Section C.
- --- By wire. The proceeds of any redemption may be wired to your bank
(complete bank information below). A wire fee of $12.00 will be charged.
- --- By EFT. Proceeds generally take up to 3 business days to reach your bank
(complete bank information below).
- ------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
- ------------------------------------ ---------------------------------------
BANK NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
BANK ADDRESS
To ensure proper crediting of your bank account, please attach a voided check
or a deposit slip.
- ------------------------------------------------------------------------------
F. SYSTEMATIC WITHDRAWALS
I would like to withdraw from Brandywine Blue Fund, Inc. $ -------- (no 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 to me 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.
- --- To have payments automatically deposited to your bank account. Complete
bank account information below. (A check will be mailed to the address in
Section C if this box is not checked.)
- ------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
- --------------------------------------- ------------------------------------
BANK NAME ACCOUNT NUMBER
- ------------------------------------------------------------------------------
BANK ADDRESS
To ensure proper crediting of your bank account, please attach a voided check
or a deposit slip.
- ------------------------------------------------------------------------------
G. SIGNATURE AND CERTIFICATION REQUIRED BY THE INTERNAL REVENUE SERVICE
Neither the Fund nor its transfer agent will be responsible for the
authenticity of transaction instructions received by telephone, provided that
reasonable security procedures have been followed.
By selecting the options in Section (E or F), I hereby authorize the Fund to
initiate credits to my account at the bank indicated and for the bank to credit
the same to such account through the Automated Clearing House ("ACH") system.
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 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 IRSDOES NOT
REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE
CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING.
- ---------------------------- -----------------------------------------------
DATE (Mo/Dy/Yr) SIGNATURE OF OWNER*<F12>
- ---------------------------- -----------------------------------------------
DATE (Mo/Dy/Yr) SIGNATURE OF CO-OWNER, if any
*<F12>If shares are to be registered in (1) joint names, both persons should
sign, (2) a custodian for a minor, the custodian should sign, (3) a trust, the
trustee(s) should sign, or (4) a corporation or other entity, an officer should
sign and print name and title on space provided below.
- ------------------------------------------------------------------------------
PRINT NAME AND TITLE OF OFFICER SIGNING FOR A CORPORATION OR OTHER ENTITY
CUSTODIAN, TRANSFER AGENT,
AND DIVIDEND DISBURSING AGENT
Firstar Trust Company
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION January 30, 1998
BRANDYWINE BLUE FUND, INC.
3908 Kennett Pike
Greenville, Delaware 19807
This Statement of Additional Information is not a prospectus and
should be read in conjunction with the prospectus of Brandywine Blue Fund,
Inc. dated January 30, 1998. Requests for copies of the prospectus should
be made in writing to Brandywine Blue Fund, Inc., P.O. Box 4166,
Greenville, Delaware, 19807, Attention: Corporate Secretary, Email:
[email protected] or Website: www.brandywinefunds.com, or by calling (800)
656-3017.
BRANDYWINE BLUE FUND, INC.
Table of Contents
Page No.
Investment Restrictions ............................. 1
Directors and Officers of the Fund .................. 3
Principal Stockholders .............................. 6
Investment Adviser .................................. 6
Service Agreement ................................... 8
Determination of Net Asset Value and Performance..... 8
Purchase of Shares................................... 10
Systematic Withdrawal Plan .......................... 10
Allocation of Portfolio Brokerage ................... 11
Custodian ........................................... 12
Taxes ............................................... 12
Stockholder Meetings ................................ 13
Independent Accountants ............................. 15
Financial Statements ................................ 15
No person has been authorized to give any information or to make
any representations other than those contained in this Statement of
Additional Information and the Prospectus dated January 30, 1998 and, if
given or made, such information or representations may not be relied upon
as having been authorized by Brandywine Blue Fund, Inc.
This Statement of Additional Information does not constitute an
offer to sell securities.
INVESTMENT RESTRICTIONS
As set forth in the prospectus dated January 30, 1998 of
Brandywine Blue Fund, Inc. (the "Fund") under the caption "Investment
Objective and Policies", the primary investment objective of the Fund is
to produce long-term capital appreciation principally through investing in
common stocks. Current income is a secondary consideration. Consistent
with its investment objectives, the Fund has adopted the following
investment restrictions which are matters of fundamental policy and cannot
be changed without approval of the holders of the lesser of: (i) 67% of
the Fund's shares present or represented at a stockholder's meeting at
which the holders of more than 50% of such shares are present or
represented; or (ii) more than 50% of the outstanding shares of the Fund.
l. The Fund will not purchase warrants, purchase securities on
margin, participate in a joint-trading account, sell securities short, or
write or invest in put or call options.
2. The Fund will not borrow money or issue senior securities,
except for temporary bank borrowings for emergency or extraordinary
purposes (but not for the purpose of purchase of investments) and then
only in an amount not in excess of 5% of the value of its net assets and
will not pledge any of its assets except to secure borrowings and then
only to an extent not greater than 10% of the value of the Fund's net
assets. The Fund will not purchase securities while it has any
outstanding borrowings.
3. The Fund will not lend money (except by purchasing publicly
distributed debt securities or entering into repurchase agreements
provided that repurchase agreements maturing in more than seven days plus
all other illiquid securities will not exceed 10% of the Fund's total
assets) and will not lend its portfolio securities.
4. The Fund will not purchase securities of other investment
companies except (a) as part of a plan of merger, consolidation or
reorganization approved by the shareholders of the Fund or (b) securities
of registered closed-end investment companies on the open market where no
commission or profit results, other than the usual and customary broker's
commission and where as a result of such purchase the Fund would hold less
than 3% of any class of securities, including voting securities, of any
registered closed-end investment company and less than 5% of the Fund's
assets, taken at current value, would be invested in securities of
registered closed-end investment companies.
5. The Fund will not make investments for the purpose of
exercising control or management of any company.
6. The Fund will limit its purchases of securities of any
issuer (other than the United States or an instrumentality of the United
States) in such a manner that it will satisfy at all times the
requirements of Section 5(b)(1) of the Investment Company Act of 1940
(i.e., that at least 75% of the value of its total assets is represented
by cash and cash items (including receivables), U.S. Government
Securities, securities of other investment companies, and other securities
for the purpose of the foregoing limited in respect of any one issuer to
an amount not greater than 5% of the value of the total assets of the Fund
and to not more than 10% of the outstanding voting securities of such
issuer.)
7. The Fund will not concentrate 25% or more of the value of
its total assets, determined at the time an investment is made, exclusive
of U.S. Government securities, in securities issued by companies engaged
in the same industry.
8. The Fund will not acquire or retain any security issued by
a company, an officer or director of which is an officer or director of
the Fund or an officer, director or other affiliated person of its
investment adviser.
9. The Fund will not acquire or retain any security issued by
a company if any of the directors or officers of the Fund, or directors,
officers or other affiliated persons of its investment adviser
beneficially own more than 1/2% of such company's securities and all of
the above persons owning more than 1/2% own together more than 5% of its
securities.
10. The Fund will not act as an underwriter or distributor of
securities other than shares of the Fund and will not purchase any
securities which are restricted from sale to the public without
registration under the Securities Act of 1933, as amended.
11. The Fund will not purchase any interest in any oil, gas or
any other mineral exploration or development program.
12. The Fund will not purchase or sell real estate or real
estate mortgage loans.
13. The Fund will not purchase or sell commodities or
commodities contracts, including futures contracts.
The following investment limitation is not fundamental and may
be changed without stockholder approval.
1. The Fund will not invest in securities of unseasoned
issuers, including their predecessors, which have been in operation for
less than 3 years, and equity securities of issuers which are not readily
marketable, if by reason thereof the value of its aggregate investment in
such securities would exceed 5% of its total assets.
DIRECTORS AND OFFICERS OF THE FUND
The name, address, principal occupations during the past five
years and other information with respect to each of the directors and
officers of the Fund are as follows:
FOSTER S. FRIESS*
115 East Snow King Avenue
P. O. Box 576
Jackson, Wyoming
(PRESIDENT, TREASURER AND A
DIRECTOR OF THE FUND)
Mr. Friess, age 57, has served as President, Treasurer and a
director of both the Fund and Brandywine Fund, Inc. since their inceptions
in 1990 and 1985, respectively. He is also President and Chairman of the
Board of Friess Associates, Inc., an investment advisory firm which he
co-founded in 1974 with his wife, Lynnette E. Friess. Friess Associates,
Inc. has been the investment adviser of Brandywine Fund, Inc. since its
inception and is the investment adviser of the Fund. Mr. Friess has been
a Chartered Financial Analyst since 1970. He is currently Chairman of the
Life Enrichment Foundation, Wilmington, Delaware. He is also a member of
the Advisory Council of the Royal Swedish Academy of Sciences, serves as
President of the Council on National Policy, and sits on the Board of
Advisers for the John Templeton Foundation.
STIG RAMEL
Resedavagen 8
171732 Solna
Sweden
(DIRECTOR)
Mr. Ramel, age 70, served as President of the Nobel Foundation
from 1972 to 1992 and was thereafter appointed by the Swedish Government
as Chairman of Fond 92-94, a nonprofit organization with the
responsibility of financing scientific research institutions. He is a
member of the Royal Swedish Academy of Sciences. Mr. Ramel also has
served as a director of Brandywine Fund, Inc. since it was founded in
1985.
JOHN E. BURRIS
5th and McColley Street
Milford, Delaware
(DIRECTOR)
Mr. Burris, age 77, is Chairman of Burris Foods, Inc. He is a
trustee of the University of Delaware and a former member of the Board of
Directors of Wilmington Trust Company. He is a member of the board of
directors of Milford Memorial Hospital and is a member of the Private
Industry Council for the State of Delaware. He also has served as a
director of Brandywine Fund, Inc. since it was founded in 1985.
WILLIAM F. D'ALONZO
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT)
Mr. D'Alonzo, age 43, has been an analyst for Friess Associates,
Inc. since 1981. He also has served as a Vice President of Brandywine
Fund, Inc. since April, 1990.
CLARKE ADAMS, JR.
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT)
Mr. Adams, age 52, has been an analyst for Friess Associates,
Inc. since 1983. He also has served as a Vice President of Brandywine
Fund, Inc. since April, 1990.
CARL S. GATES
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT)
Mr. Gates, age 65, has been an analyst for Friess Associates,
Inc. since 1988. He has served as a Vice President of both the Fund and
Brandywine Fund, Inc. since April, 1994.
PAUL R. ROBINSON
3908 Kennett Pike
Greenville, Delaware
(VICE PRESIDENT AND ASSISTANT SECRETARY)
Mr. Robinson, age 74, has been a consultant for Friess
Associates, Inc. since June, 1985. He also has served as a Vice President
of Brandywine Fund, Inc. since April, 1990 and as Assistant Secretary of
Brandywine Fund, Inc. since April, 1987.
LYNDA J. CAMPBELL
3908 Kennett Pike
Greenville, Delaware
(SECRETARY)
Ms. Campbell, age 52, has served as Secretary of Brandywine
Fund, Inc. since December, 1989. She is also an employee of Friess
Associates, Inc. and has been employed in various capacities with such
firm since December, 1985.
__________________
* Mr. Friess is the only director who is an "interested person" of the
Fund as that term is defined in the Investment Company Act of 1940.
During the fiscal year ended September 30, 1997, the Fund paid
$2,000 in director's fees to the Fund's disinterested directors. The
Fund's standard method of compensating directors is to pay each
disinterested director an annual fee of $1,000. The Fund also may
reimburse its directors for travel expenses incurred in order to attend
meetings of the Board of Directors.
The table below sets forth the compensation paid by the Fund to
each of the directors of the Fund during the fiscal year ended September
30, 1997:
<TABLE>
<CAPTION>
COMPENSATION TABLE
Pension or
Retirement Total
Aggregate Benefits Accrued Estimated Annual Compensation
Compensation As Part of Fund Benefits Upon from Fund Paid
Name of Person From Fund Expenses Retirement to Directors
<S> <C> <C> <C> <C>
Foster S. Friess $0 $0 $0 $0
Stig Ramel $1,000 $0 $0 $1,000
John E. Burris $1,000 $0 $0 $1,000
</TABLE>
PRINCIPAL STOCKHOLDERS
At December 31, 1997, all officers and directors of the Fund as
a group (8 persons) beneficially owned 804,192 shares of Common Stock, or
3.6% of the then outstanding shares. At such date, Charles Schwab & Co.,
Inc., 101 Montgomery Street, San Francisco, California 94104, owned of
record 2,876,043 shares of the Fund's Common Stock, or 12.9% of the then
outstanding shares, and National Financial Services Corp., Church Street
Station, P.O. Box 3908, New York, New York 10068, owned of record
2,081,495 shares of the Fund's Common Stock, or 9.4% of the then
outstanding shares. All of the shares owned by Charles Schwab & Co., Inc.
and National Financial Services Corp. were owned of record only.
INVESTMENT ADVISER
As set forth in the Prospectus under the caption "Management of
the Fund" the investment adviser to the Fund is Friess Associates, Inc.
(the "Adviser"). Pursuant to an investment advisory agreement between the
Fund and the Adviser (the "Agreement") the Adviser furnishes continuous
investment advisory services and management to the Fund. During the
fiscal years ended September 30, 1997, September 30, 1996 and September
30, 1995, the Fund paid the Adviser fees of $4,414,637, $2,563,756 and
$678,052, respectively.
The Fund will pay all of its expenses not assumed by the Adviser
including, but not limited to, the costs of preparing and printing its
registration statements required under the Securities Act of 1933 and the
Investment Company Act of 1940 and any amendments thereto, the expense of
registering its shares with the Securities and Exchange Commission and in
the various states, the printing and distribution cost of prospectuses
mailed to existing stockholders, the cost of stock certificates, director
and officer liability insurance, reports to stockholders, reports to
government authorities and proxy statements, interest charges, brokerage
commissions, and expenses incurred in connection with portfolio
transactions. During the fiscal years ended September 30, 1997, September
30, 1996 and September 30, 1995, such expenses included $1,775, $9,450 and
$6,125, respectively, in administrative services performed by the Adviser.
The Fund will also pay the fees of directors who are not interested
persons of the Fund, salaries of administrative and clerical personnel,
association membership dues, auditing and accounting services, fees and
expenses of any custodian or trustees having custody of Fund assets,
expenses of calculating the net asset value and repurchasing and redeeming
shares, and charges and expenses of dividend disbursing agents,
registrars, and stock transfer agents, including the cost of keeping all
necessary stockholder records and accounts and handling any problems
related thereto.
The Adviser has undertaken to reimburse the Fund to the extent
that the aggregate annual operating expenses, including the investment
advisory fee but excluding interest, taxes, brokerage commissions and
extraordinary items, exceed that percentage of the average net assets of
the Fund for such year, as determined by valuations made as of the close
of each business day of the year, which is the most restrictive percentage
provided by the state laws of the various states in which the Common Stock
is qualified for sale. As of the date hereof, no such state law provision
was applicable to the Fund. The Fund monitors its expense ratio at least
on a monthly basis. If the accrued amount of the expenses of the Fund
exceeds the applicable expense limitation, the Fund creates an account
receivable from the Adviser for the amount of such excess. In such a
situation the monthly payment of the Adviser's fee will be reduced by the
amount of such excess, subject to adjustment month by month during the
balance of the Fund's fiscal year if accrued expenses thereafter fall
below this limit. Notwithstanding the most restrictive applicable expense
limitation of state securities commissions described above, the Adviser
has voluntarily agreed to reimburse the Fund for any such expenses
incurred in excess of 2% of average net assets. No reimbursement was
required during the fiscal years ended September 30, 1997, September 30,
1996 and September 30, 1995.
The Agreement will remain in effect as long as its continuance
is specifically approved at least annually, by (i) the Board of Directors
of the Fund, or by the vote of a majority (as defined in the Investment
Company Act of 1940) of the outstanding shares of the Fund, and (ii) by
the vote of a majority of the directors of the Fund who are not parties to
the Agreement or interested persons of the Adviser, cast in person at a
meeting called for the purpose of voting on such approval. The Agreement
provides that it may be terminated at any time without the payment of any
penalty, by the Board of Directors of the Fund or by vote of a majority of
the Fund's stockholders, on sixty days written notice to the Adviser, and
by the Adviser on the same notice to the Fund and that it shall be
automatically terminated if it is assigned.
The Agreement provides that the Adviser shall not be liable to
the Fund or its stockholders for anything other than willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations or
duties. The Agreement also provides that the Adviser and its officers,
directors and employees may engage in other businesses, devote time and
attention to any other business whether of a similar or dissimilar nature,
and render investment advisory services to others.
SERVICE AGREEMENT
As described in the Fund's prospectus under the caption
"Management of the Fund," the Fund and Fiduciary Management, Inc.,
Milwaukee, Wisconsin, have entered into a Service Agreement pursuant to
which certain accounting and record keeping services will be performed for
the Fund by Fiduciary Management, Inc. For its services the Fund
currently pays Fiduciary Management, Inc. ("FMI") an annual fee of
$102,000 and varying fees for blue sky filing services. For the fiscal
years ended September 30, 1997 and 1996, the annual fees were $85,000 and
$70,000, respectively. Prior to October 1, 1995, the Fund paid FMI a
monthly fee of 1/12 of 0.1% (0.1% per annum) on the first $30,000,000 of
the daily net assets of the Fund and 1/12 of 0.05% (0.05% per annum) on
the daily net assets of the Fund over $30,000,000, with a minimum fee of
$15,000. The total fees (i.e., annual and blue sky fees) paid pursuant to
the Service Agreement for the fiscal years ended September 30, 1997,
September 30, 1996 and September 30, 1995 were $91,800, $70,000 and
$40,246, respectively. The Service Agreement may be terminated at any
time by either the Fund or FMI upon 90 days' written notice. The Service
Agreement provides that FMI shall not be liable to the Fund, the Adviser
or any stockholders of the Fund for anything other than willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties. FMI performs similar services for other investment
companies.
DETERMINATION OF NET ASSET VALUE AND PERFORMANCE
As set forth in the Prospectus under the caption "Determination
of Net Asset Value" the net asset value of the Fund will be determined as
of the close of trading on each day the New York Stock Exchange is open
for trading. The New York Stock Exchange is open for trading Monday
through Friday except New Year's Day, Dr. Martin Luther King, Jr. Day,
President's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Additionally, if any of the
aforementioned holidays falls on a Saturday, the New York Stock Exchange
will not be open for trading on the preceding Friday and when any such
holiday falls on a Sunday, the New York Stock Exchange will not be open
for trading on the succeeding Monday, unless unusual business conditions
exist, such as the ending of a monthly or the yearly accounting period.
Securities traded on any national stock exchange or quoted on
the NASDAQ National Market System will be valued on the basis of the last
sale price on the date of valuation or, in the absence of any sale on that
date, the most recent bid price. Other securities will be valued at the
most recent bid price, if market quotations are readily available. Any
securities for which there are no readily available market quotations and
other assets will be valued at their fair value as determined in good
faith by the Board of Directors. Odd lot differentials and brokerage
commissions will be excluded in calculating values.
Any total rate of return quotation for the Fund will be for a
period of three or more months and will assume the reinvestment of all
dividends and capital gains distributions which were made by the Fund
during that period. Any period total rate of return quotation of the Fund
will be calculated by dividing the net change in value of a hypothetical
shareholder account established by an initial payment of $1,000 at the
beginning of the period by 1,000. The net change in the value of a
shareholder account is determined by subtracting $1,000 from the product
obtained by multiplying the net asset value per share at the end of the
period by the sum obtained by adding (A) the number of shares purchased at
the beginning of the period plus (B) the number of shares purchased during
the period with reinvested dividends and distributions. Any average
annual compounded total rate of return quotation of the Fund will be
calculated by dividing the redeemable value at the end of the period
(i.e., the product referred to in the preceding sentence) by $1,000. A
root equal to the period, measured in years, in question is then
determined and 1 is subtracted from such root to determine the average
annual compounded total rate of return.
The foregoing computation may also be expressed by the following
formula:
n
P(1+T) = ERV
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the stated periods at
the end of the stated periods.
PURCHASE OF SHARES
The Fund has adopted procedures pursuant to Rule 17a-7
under the Investment Company Act of 1940 pursuant to which the Fund may
effect a purchase and sale transaction with an affiliated person of the
Fund (or an affiliated person of such an affiliated person) in which the
Fund issues its shares in exchange for securities of a character which is
a permitted investment for the Fund. For purposes of determining the
number of shares of the Fund to be issued, the securities to be exchanged
will be valued in accordance with the requirements of Rule 17a-7. No such
transactions will be made with respect to any person in which an
affiliated person of the Fund has a beneficial interest.
SYSTEMATIC WITHDRAWAL PLAN
A stockholder who owns Fund shares worth at least $100,000 at the
current net asset value may, by completing an application which may be
obtained from Firstar Trust Company, create a Systematic Withdrawal Plan
from which a fixed sum will be paid to the stockholder at regular
intervals. To establish the Systematic Withdrawal Plan, the stockholder
deposits Fund shares with the Fund and appoints it as agent to effect
redemptions of Fund shares held in the account for the purpose of making
withdrawal payments (not more than monthly) of a fixed amount to the
stockholder out of the account. Fund shares deposited by the stockholder
in the account need not be endorsed or accompanied by a stock power if
registered in the same name as the account; otherwise, a properly executed
endorsement or stock power, obtained from any bank, broker-dealer or the
Fund is required. The stockholder's signature should be guaranteed by a
bank, a member firm of a national stock exchange, or other eligible
guarantor institution.
There is no minimum withdrawal payment. These payments will be
made from the proceeds of periodic redemption of shares in the account at
net asset value. Redemptions will be made on or about the day selected by
the stockholder of each month in which a withdrawal payment is to be made.
Establishment of a Systematic Withdrawal Plan constitutes an election by
the stockholder to reinvest in additional Fund shares, at net asset value,
all income dividends and capital gains distributions payable by the Fund
on shares held in such account, and shares so acquired will be added to
such account. The stockholder may deposit additional Fund shares in his
account at any time.
Withdrawal payments cannot be considered as yield or income on the
stockholder's investment, since portions of each payment will normally
consist of a return of capital. Depending on the size or the frequency of
the disbursements requested, and the fluctuation in the value of the
Fund's portfolio, redemptions for the purpose of making such disbursements
may reduce or even exhaust the stockholder's account.
The stockholder may vary the amount or frequency of withdrawal
payments, temporarily discontinue them, or change the designated payee or
payee's address, by notifying Firstar Trust Company in writing. The
stockholder also may vary the amount or frequency of withdrawal payments
or temporarily discontinue them by notifying Firstar Trust Company by
telephone at (800) 656-3017 or (414) 765-4124.
ALLOCATION OF PORTFOLIO BROKERAGE
Decisions to buy and sell securities for the Fund are made by the
Adviser subject to review by the Fund's Board of Directors. In placing
purchase and sale orders for portfolio securities for the Fund, it is the
policy of the Adviser to seek the best execution of orders at the most
favorable price in light of the overall quality of brokerage and research
services provided, as described in this and the following paragraph. In
selecting brokers to effect portfolio transactions, the determination of
what is expected to result in best execution at the most favorable price
involves a number of largely judgmental considerations. Among these are
the Adviser's evaluation of the broker's efficiency in executing and
clearing transactions, block trading capability (including the broker's
willingness to position securities) and the broker's financial strength
and stability. The most favorable price to the Fund means the best net
price without regard to the mix between purchase or sale price and
commission, if any. Over-the-counter securities are generally purchased
and sold directly with principal market makers who retain the difference
in their cost in the security and its selling price. In some instances,
the Adviser feels that better prices are available from non-principal
market makers who are paid commissions directly. While some brokers with
whom the Fund effects portfolio transactions may recommend the purchase of
the Fund's shares, the Adviser will not allocate portfolio brokerage on
the basis of recommendations to purchase shares of the Fund.
In allocating brokerage business for the Fund, the Adviser also
takes into consideration the research, analytical, statistical and other
information and services provided by the broker, such as general economic
reports and information, reports or analyses of particular companies or
industry groups, market timing and technical information, and the
availability of the brokerage firm's analysts for consultation. While the
Adviser believes these services have substantial value, they are
considered supplemental to the Adviser's own efforts in the performance of
its duties under the Agreement. Other clients of the Adviser may
indirectly benefit from the availability of these services to the Adviser,
and the Fund may indirectly benefit from services available to the Adviser
as a result of transactions for other clients. The Agreement provides
that the Adviser may cause the Fund to pay a broker which provides
brokerage and research services to the Adviser a commission for effecting
a securities transaction in excess of the amount another broker would have
charged for effecting the transaction, if the Adviser determines in good
faith that such amount of commission is reasonable in relation to the
value of brokerage and research services provided by the executing broker
viewed in terms of either the particular transaction or the Adviser's
overall responsibilities with respect to the Fund and the other accounts
as to which he exercises investment discretion. Brokerage commissions
paid by the Fund during the fiscal years ended September 30, 1997,
September 30, 1996 and September 30, 1995 totaled $1,907,197 on total
transactions of $1,180,501,076, $1,269,308 on total transactions of
$1,149,183,806 and $383,604 on total transactions of $344,918,024,
respectively. All of the brokers to whom commissions were paid provided
research services to the Adviser.
CUSTODIAN
Firstar Trust Company, 615 East Michigan Street, Milwaukee,
Wisconsin 53202, acts as custodian for the Fund. As such, Firstar Trust
Company holds all securities and cash of the Fund, delivers and receives
payment for securities sold, receives and pays for securities purchased,
collects income from investments and performs other duties, all as
directed by officers of the Fund. Firstar Trust Company does not exercise
any supervisory function over the management of the Fund, the purchase and
sale of securities or the payment of distributions to stockholders.
Firstar Trust Company also acts as the Fund's transfer agent and dividend
disbursing agent.
TAXES
As set forth in the Prospectus under the caption "Dividends,
Distributions and Taxes" the Fund will endeavor to qualify annually for
and elect tax treatment applicable to a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended, (the
"Code").
The Fund intends to distribute substantially all of its net
investment income and net capital gain each fiscal year. Dividends from
net investment income, including short-term capital gains, are taxable to
investors as ordinary income, while distributions of net capital gains are
taxable as long-term capital gain regardless of the stockholder's holding
period for the shares. The Code provides for a three-tiered tax rate
structure for long-term capital gains dependent upon the Fund's holding
period of the underlying financial instrument or capital asset.
Distributions from the Fund are taxable to investors, whether received in
cash or in additional shares of the Fund. A portion of the Fund's income
distributions may be eligible for the 70% dividends-received deduction for
domestic corporate stockholders.
Any dividend or capital gains distribution paid shortly after a
purchase of shares of Common Stock will have the effect of reducing the
per share net asset value of such shares by the amount of the dividend or
distribution. Furthermore, if the net asset value of the shares of Common
Stock immediately after a dividend or distribution is less than the cost
of such shares to the stockholder, the dividend or distribution will be
taxable to the stockholder even though it results in a return of capital
to him.
Redemptions of shares will generally result in a capital gain or
loss for income tax purposes. Such capital gain or loss will be long term
or short term, depending upon the holding period. However, if a loss is
realized on shares held for six months or less, and the investor received
a capital gain distribution during that period, then such loss is treated
as a long-term capital loss to the extent of the capital gain distribution
received.
The Fund may be required to withhold Federal income tax at a rate
of 31% ("backup withholding") from dividend payments and redemption
proceeds if a shareholder fails to furnish the Fund with his social
security or other tax identification number and certify under penalty of
perjury that such number is correct and that he is not subject to backup
withholding due to the under-reporting of income. The certification form
is included as part of the share purchase application and should be
completed when the account is opened.
STOCKHOLDER MEETINGS
The Maryland General Corporation Law permits registered investment
companies, such as the Fund, to operate without an annual meeting of
shareholders under specified circumstances if an annual meeting is not
required by the Investment Company Act of 1940. The Fund has adopted the
appropriate provisions in its Bylaws and may, at its discretion, not hold
an annual meeting in any year in which the election of directors is not
required to be acted on by stockholders under the Investment Company Act
of 1940.
The Fund's Bylaws also contain procedures for the removal of
directors by its stockholders. At any meeting of stockholders, duly
called and at which a quorum is present, the stockholders may, by the
affirmative vote of the holders of a majority of the votes entitled to be
cast thereon, remove any director or directors from office and may elect a
successor or successors to fill any resulting vacancies for the unexpired
terms of removed directors.
Upon the written request of the holders of shares entitled to not
less than ten percent (10%) of all the votes entitled to be cast at such
meeting, the Secretary of the Fund shall promptly call a special meeting
of stockholders for the purpose of voting upon the question of removal of
any director. Whenever ten or more stockholders of record who have been
such for at least six months preceding the date of application, and who
hold in the aggregate either shares having a net asset value of at least
$25,000 or at least one percent (1%) of the total outstanding shares,
whichever is less, shall apply to the Fund's Secretary in writing, stating
that they wish to communicate with other stockholders with a view to
obtaining signatures to a request for a meeting as described above and
accompanied by a form of communication and request which they wish to
transmit, the Secretary shall within five business days after such
application either: (1) afford to such applicants access to a list of the
names and addresses of all stockholders as recorded on the books of the
Fund; or (2) inform such applicants as to the approximate number of
stockholders of record and the approximate cost of mailing to them the
proposed communication and form of request.
If the Secretary elects to follow the course specified in clause
(2) of the last sentence of the preceding paragraph, the Secretary, upon
the written request of such applicants, accompanied by a tender of the
material to be mailed and of the reasonable expenses of mailing, shall,
with reasonable promptness, mail such material to all stockholders of
record at their addresses as recorded on the books unless within five
business days after such tender the Secretary shall mail to such
applicants and file with the Securities and Exchange Commission, together
with a copy of the material to be mailed, a written statement signed by at
least a majority of the Board of Directors to the effect that in their
opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the
basis of such opinion.
After opportunity for hearing upon the objections specified in the
written statement so filed, the Securities and Exchange Commission may,
and if demanded by the Board of Directors or by such applicants shall,
enter an order either sustaining one or more of such objections or
refusing to sustain any of them. If the Securities and Exchange
Commission shall enter an order refusing to sustain any of such
objections, or if, after the entry of an order sustaining one or more of
such objections, the Securities and Exchange Commission shall find, after
notice and opportunity for hearing, that all objections so sustained have
been met, and shall enter an order so declaring, the Secretary shall mail
copies of such material to all stockholders with reasonable promptness
after the entry of such order and the renewal of such tender.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 100 East Wisconsin Avenue, Suite 1500,
Milwaukee, Wisconsin 53202, currently serves as the independent
accountants for the Fund and has so served for all periods since the Fund
commenced operations on January 10, 1991.
FINANCIAL STATEMENTS
The following financial statements are incorporated by reference to
the Annual Report, dated September 30, 1997, of Brandywine Blue Fund, Inc.
(File No. 811-6221), as filed with the Securities and Exchange Commission
on October 16, 1997:
Report of Independent Accountants
Statement of Net Assets as of September 30, 1997
Statement of Operations for the Year Ended
September 30, 1997
Statements of Changes in Net Assets for the Years
Ended September 30, 1997 and 1996
Financial Highlights for the Years Ended September 30,
1997, 1996, 1995, 1994, 1993 and 1992 and for the period
from January 10, 1991 (commencement of operations) to
September 30, 1991
Notes to Financial Statements
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a.) Financial Statements (Financial Highlights included in Part
A and all incorporated by reference to the Annual Report,
dated September 30, 1997 (File No. 811-6221), of Brandywine
Blue Fund, Inc. (as filed with the Securities and Exchange
Commission on October 16, 1997))
Brandywine Blue Fund, Inc.
Report of Independent Accountants
Statement of Net Assets as of September 30, 1997
Statement of Operations for the Year Ended
September 30, 1997
Statements of Changes in Net Assets for the
Years Ended September 30, 1997 and 1996
Financial Highlights for the Years Ended
September 30, 1997, 1996, 1995, 1994, 1993 and 1992 and
for the period from January 10, 1991 (commencement
of operations) to September 30, 1991
Notes to Financial Statements
(b.) Exhibits
(1) Registrant's Articles of Incorporation as amended
through January 15, 1997; Exhibit 1 to Post-
Effective Amendment No. 7 to Registrant's
Registration Statement on Form N-1A is incorporated
by reference pursuant to Rule 411 under the
Securities Act of 1933.
(1.1) Articles Supplementary to Articles of Incorporation
dated March 28, 1996; Exhibit 1.1 to Post-Effective
Amendment No. 7 to Registrant's Registration
Statement on Form N-1A is incorporated by reference
pursuant to Rule 411 under the Securities Act of
1933.
(2) Registrant's By-Laws as amended through January 15,
1997; Exhibit 2 to Post-Effective Amendment No. 7
to Registrant's Registration Statement on Form N-1A
is incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(3) None
(4) None
(5) Investment Advisory Agreement; Exhibit No. 5 to
Post-Effective Amendment No. 7 to Registrant's
Registration Statement on Form N-1A is incorporated
by reference pursuant to Rule 411 under the
Securities Act of 1933.
(6) None
(7) None
(8) Custodian Agreement with Firstar Trust Company;
Exhibit No. 8 to Post-Effective Amendment No. 7 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(9.1) Service Agreement with Fiduciary Management, Inc.;
Exhibit No. 9.1 to Post-Effective Amendment No. 7
to Registrant's Registration Statement on Form N-1A
is incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(9.2) Transfer Agent Agreement with First Wisconsin Trust
Company; Exhibit No. 9.2 to Post-Effective
Amendment No. 7 to Registrant's Registration
Statement on Form N-1A is incorporated by reference
pursuant to Rule 411 under the Securities Act of
1933.
(10) Opinion of Foley & Lardner, counsel for Registrant.
(11) Consent of Price Waterhouse LLP
(12) None
(13) Subscription Agreement
(14) None
(15) None
(16) Schedule for Computation of Performance Quotations;
Exhibit 16 to Post-Effective Amendment No. 6 to
Registrant's Registration Statement on Form N-1A is
incorporated by reference pursuant to Rule 411
under the Securities Act of 1933.
(17) Financial Data Schedule
(18) None
Item 25. Persons Controlled by or under Common Control with
Registrant
Registrant is not controlled by any person. Registrant
neither controls any person nor is under common control with any other
person.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Class as of December 31, 1997
Common Stock, $.01 par value 1,062
Item 27. Indemnification
Pursuant to the authority of the Maryland General
Corporation Law, particularly Section 2-418 thereof, Registrant's Board of
Directors has adopted the following bylaw which is in full force and
effect and has not been modified or canceled:
Article VII
GENERAL PROVISIONS
Section 7. Indemnification.
A. The corporation shall indemnify all of its corporate
representatives against expenses, including attorneys' fees, judgments,
fines and amounts paid in settlement actually and reasonably incurred by
them in connection with the defense of any action, suit or proceeding, or
threat or claim of such action, suit or proceeding, whether civil,
criminal, administrative, or legislative, no matter by whom brought, or in
any appeal in which they or any of them are made parties or a party by
reason of being or having been a corporate representative, if the
corporate representative acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation
and with respect to any criminal proceeding, if he had no reasonable cause
to believe his conduct was unlawful provided that the corporation shall
not indemnify corporate representatives in relation to matters as to which
any such corporate representative shall be adjudged in such action, suit
or proceeding to be liable for gross negligence, willful misfeasance, bad
faith, reckless disregard of the duties and obligations involved in the
conduct of his office, or when indemnification is otherwise not permitted
by the Maryland General Corporation Law.
B. In the absence of an adjudication which expressly absolves
the corporate representative, or in the event of a settlement, each
corporate representative shall be indemnified hereunder only if there has
been a reasonable determination based on a review of the facts that
indemnification of the corporate representative is proper because he has
met the applicable standard of conduct set forth in paragraph A. Such
determination shall be made: (i) by the board of directors, by a majority
vote of a quorum which consists of directors who were not parties to the
action, suit or proceeding, or if such a quorum cannot be obtained, then
by a majority vote of a committee of the board consisting solely of two or
more directors, not, at the time, parties to the action, suit or
proceeding and who were duly designated to act in the matter by the full
board in which the designated directors who are parties to the action,
suit or proceeding may participate; or (ii) by special legal counsel
selected by the board of directors or a committee of the board by vote as
set forth in (i) of this paragraph, or, if the requisite quorum of the
full board cannot be obtained therefor and the committee cannot be
established, by a majority vote of the full board in which directors who
are parties to the action, suit or proceeding may participate.
C. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall create a rebuttable presumption that the person
was guilty of willful misfeasance, bad faith, gross negligence or reckless
disregard to the duties and obligations involved in the conduct of his or
her office, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
D. Expenses, including attorneys' fees, incurred in the
preparation of and/or presentation of the defense of a civil or criminal
action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding as authorized in
the manner provided in Section 2-418(F) of the Maryland General
Corporation Law upon receipt of: (i) an undertaking by or on behalf of
the corporate representative to repay such amount unless it shall
ultimately be determined that he or she is entitled to be indemnified by
the corporation as authorized in this bylaw; and (ii) a written
affirmation by the corporate representative of the corporate
representative's good faith belief that the standard of conduct necessary
for indemnification by the corporation has been met.
E. The indemnification provided by this bylaw shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under these bylaws, any agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his or her
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person subject to the limitations
imposed from time to time by the Investment Company Act of 1940, as
amended.
F. This corporation shall have power to purchase and maintain
insurance on behalf of any corporate representative against any liability
asserted against him or her and incurred by him or her in such capacity or
arising out of his or her status as such, whether or not the corporation
would have the power to indemnify him or her against such liability under
this bylaw provided that no insurance may be purchased or maintained to
protect any corporate representative against liability for gross
negligence, willful misfeasance, bad faith or reckless disregard of the
duties and obligations involved in the conduct of his or her office.
G. "Corporate Representative" means an individual who is or
was a director, officer, agent or employee of the corporation or who
serves or served another corporation, partnership, joint venture, trust or
other enterprise in one of these capacities at the request of the
corporation and who, by reason of his or her position, is, was, or is
threatened to be made, a party to a proceeding described herein.
Insofar as indemnification for and with respect to
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of Registrant pursuant to the
foregoing provisions or otherwise, 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 Registrant of expenses incurred or
paid by a director, officer or controlling person or Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, 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 of whether such indemnification 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
Incorporated by reference to pages 3 through 5 of the
Statement of Additional Information pursuant to Rule 411 under the
Securities Act of 1933. Mr. Herman Friess, a director of the Adviser, is
a lawyer having his own practice with offices in Rice Lake, Wisconsin.
Item 29. Principal Underwriters
Registrant has no principal underwriters.
Item 30. Location of Accounts and Records
The accounts, books and other documents required to be
maintained by Registrant pursuant to Section 31(a) of the Investment
Company Act of 1940 and the rules promulgated thereunder are in the
physical possession of Fiduciary Management, Inc. and Registrant's
Custodian as follows: the documents required to be maintained by
paragraphs (4), (5), (6), (7), (10) and (11) of Rule 31a-1(b) will be
maintained by Fiduciary Management, Inc. at its offices at 225 East Mason
Street, Milwaukee, Wisconsin 53202, and all other records will be
maintained by the Custodian.
Item 31. Management Services
All management-related service contracts entered into by
Registrant are discussed in Parts A and B of this Registration Statement.
Item 32. Undertakings
None.
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 Amended
Registration Statement pursuant to Rule 485(b) under the Securities Act of
1933 and has duly caused this Amended Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City
of Jackson and State of Wyoming on the 29th day of January, 1998
BRANDYWINE BLUE FUND, INC.
(Registrant)
By: /s/Foster S. Friess
Foster S. Friess, President
Pursuant to the requirements of the Securities Act of 1933, this
Amended Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Name Title Date
/s/Foster S. Friess Principal Executive, January 29, 1998
Foster S. Friess Financial and
Accounting Officer
and Director
Director January , 1998
Stig Ramel
/s/John E. Burris Director January 29, 1998
John E. Burris
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
(1) Registrant's Articles of
Incorporation*
(1.1) Articles Supplementary to Articles of Incorporation*
(2) Registrant's Bylaws*
(3) None
(4) None
(5) Investment Advisory Agreement*
(6) None
(7) None
(8) Custodian Agreement with Firstar
Trust Company*
(9.1) Service Agreement with Fiduciary
Management, Inc.*
(9.2) Transfer Agent Agreement with
First Wisconsin Trust Company*
(10) Opinion of Foley & Lardner,
counsel for Registrant
(11) Consent of Price Waterhouse LLP
(12) None
(13) Subscription Agreement
(14) None
(15) None
(16) Schedule for Computation of
Performance Quotations*
(17) Financial Data Schedule
(18) None
_________________
* Incorporated by reference.
EXHIBIT 10
F O L E Y & L A R D N E R
A T T O R N E Y S A T L A W
CHICAGO FIRSTAR CENTER SAN DIEGO
JACKSONVILLE 777 EAST WISCONSIN AVENUE SAN FRANCISCO
LOS ANGELES MILWAUKEE, WISCONSIN 53202-5367 TALLAHASSEE
MADISON TELEPHONE (414) 271-2400 TAMPA
ORLANDO FACSIMILE (414) 297-4900 WASHINGTON, D.C.
SACRAMENTO WEST PALM BEACH
WRITER'S DIRECT LINE
December 27, 1990
Brandywine Blue Fund, Inc.
3908 Kennett Pike
Greenville, Delaware 19807
Gentlemen:
We have acted as counsel for you in connection with the
preparation of a Registration Statement on Form N-1A relating to the sale
by you of an indefinite amount of Brandywine Blue Fund, Inc. Common Stock,
$.01 par value (such Common Stock being hereinafter referred to as the
"Stock") in the manner set forth in the Registration Statement to which
reference is made. In this connection we have examined: (a) the
Registration Statement on Form N-1A; (b) your Articles of Incorporation
and Bylaws, as amended to date; (c) corporate proceedings relative to the
authorization for issuance of the Stock; and (d) such other proceedings,
documents and records as we have deemed necessary to enable us to render
this opinion.
Based upon the foregoing, we are of the opinion that the shares
of Stock when sold as contemplated in the Registration Statement will be
legally issued, fully paid and nonassessable.
We hereby consent to the use of this opinion as an exhibit to
the Form N-1A Registration Statement. In giving this consent, we do not
admit that we are experts within the meaning of Section 11 of the
Securities Act of 1933, as amended, or within the category of persons
whose consent is required by Section 7 of said Act.
Very truly yours,
FOLEY & LARDNER
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 8 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated October 7, 1997, relating to the financial
statements and financial highlights appearing in the September 30, 1997 Annual
Report to Shareholders of Brandywine Blue Fund, Inc., portions of which are
incorporated by reference into the Registration Statement. We also consent
to the reference to us under the heading "Independent Accountants" in the
Statement of Additional Information.
PRICE WATERHOUSE LLP
Milwaukee, Wisconsin
January 27, 1998
EXHIBIT 13
SUBSCRIPTION AGREEMENT
Brandywine Blue Fund, Inc.
3908 Kennett Pike
Greenville, Delaware 19807
Gentlemen:
The undersigned hereby subscribes to 10,000 shares of the Common
Stock, $.01 par value per share, of Brandywine Blue Fund, Inc., in
consideration for which the undersigned agrees to transfer to you upon
demand cash in the amount of $100,000.
It is understood that a certificate or certificates representing
the shares subscribed for shall be issued to the undersigned upon request
at any time after receipt by you of payment therefor, and that said shares
shall be deemed to be fully paid and nonassessable.
The undersigned agrees that the shares are being purchased for
investment with no present intention of reselling or redeeming said
shares.
Dated and effective as of this 20th day of December, 1990.
FRIESS ASSOCIATES, INC.
By: _________________________________
Foster S. Friess, President
Attest: ___________________________
Lynette Friess, Secretary
ACCEPTANCE
The foregoing subscription is hereby accepted. Dated and
effective as of this 20th day of December, 1990.
By: _________________________________
Foster S. Friess, President
(CORPORATE SEAL)
Attest: ___________________________
Lynda J. Carrad, Secretary
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 491,094
<INVESTMENTS-AT-VALUE> 621,272
<RECEIVABLES> 4,897
<ASSETS-OTHER> 31
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 626,200
<PAYABLE-FOR-SECURITIES> 8,278
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 560
<TOTAL-LIABILITIES> 8,838
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 399,147
<SHARES-COMMON-STOCK> 17,254
<SHARES-COMMON-PRIOR> 13,915
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 88,038
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 130,177
<NET-ASSETS> 617,362
<DIVIDEND-INCOME> 1,813
<INTEREST-INCOME> 807
<OTHER-INCOME> 0
<EXPENSES-NET> 4,775
<NET-INVESTMENT-INCOME> (2,155)
<REALIZED-GAINS-CURRENT> 97,696
<APPREC-INCREASE-CURRENT> 69,827
<NET-CHANGE-FROM-OPS> 165,368
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,155
<NUMBER-OF-SHARES-REDEEMED> 3,816
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 265,903
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (7,504)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,415
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,775
<AVERAGE-NET-ASSETS> 441,216
<PER-SHARE-NAV-BEGIN> 25.26
<PER-SHARE-NII> (.10)
<PER-SHARE-GAIN-APPREC> 10.62
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 35.78
<EXPENSE-RATIO> 1.08
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
