BRANDYWINE FUNDS
PROSPECTUS
(BRANDYWINE FUND, INC. LOGO)
(BRANDYWINE BLUE FUND, INC. LOGO)
JANUARY 31, 2000
"NEVER INVEST IN THE STOCK MARKET - INVEST IN INDIVIDUAL BUSINESSES."
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.
TABLE OF CONTENTS
QUESTIONS YOU SHOULD ASK BEFORE
INVESTING IN BRANDYWINE FUNDS 1
FEES AND EXPENSES 3
INVESTMENT OBJECTIVES, STRATEGIES
AND RISKS 3
MANAGEMENT OF THE FUNDS 4
DETERMINING NET ASSET VALUE 4
ABOUT OUR MINIMUM REQUIREMENTS
FOR INITIAL INVESTMENT 4
INVESTING WITH BRANDYWINE FUNDS 5
How to Open Your Brandywine
Funds Account 5
How to Buy Additional Shares in
Brandywine Funds 6
How to Sell Shares in
Brandywine Funds 6
Payment of Redemption Proceeds 8
How to Exchange Shares 8
DIVIDENDS, DISTRIBUTIONS
AND TAXES 8
STOCKHOLDER STATEMENTS
AND REPORTS 9
ACCOUNT SERVICES AND POLICIES 9
FINANCIAL HIGHLIGHTS 10
SHARE PURCHASE APPLICATIONS 13
A WORD ABOUT RISK
Look for this "warning flag" symbol throughout the prospectus. It is used to
mark detailed information about each type of risk that you, as a shareholder,
will confront.
QUESTIONS YOU SHOULD ASK BEFORE INVESTING IN BRANDYWINE FUNDS
1. WHAT IS THE FUNDS' GOAL?
Brandywine Funds seek capital appreciation.
2. WHAT ARE THE FUNDS' PRINCIPAL INVESTMENT STRATEGIES?
The Brandywine Funds invest principally in common stocks of U.S. companies,
and, to a lesser extent, in equity securities of foreign issuers which are
publicly traded in the United States either directly or through American
Depositary Receipts ("ADRs"). They utilize a fundamentals-driven, company-by-
company investment approach that is based on the belief that you should invest
in individual businesses, not in the stock market. The Brandywine Funds will
invest in companies in a broad range of industries but generally focus on
companies whose earnings are growing by at least 20% per year and whose stocks
sell at reasonable price-to-earnings ratios.
The Funds adhere to a firm sell discipline. The Funds will
sell a stock:
o With deteriorating fundamentals such as contracting margins or reduced
revenue growth
o When investor expectations have become unrealistically high
o When they find a better investment
While this sell discipline is likely to cause the Funds to have
annual portfolio turnover rates of approximately 200%, it also causes the
Funds to keep seeking better investment alternatives.
Brandywine Fund invests in companies of all sizes. Brandywine Blue Fund
invests almost exclusively in mid-cap and larger companies, usually companies
having a market capitalization of more than $2 billion.
3. WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?
The Funds invest principally in common stocks. The prices of the stocks in
which the Funds invest may decline for a number of reasons. The price declines
may be steep, sudden and/or prolonged. As a consequence, investors in the
Funds may lose money.
Investments in foreign securities, even though publicly traded in the United
States, may involve risks which are in addition to those inherent in domestic
investments. Foreign companies may not be subject to the regulatory
requirements of U.S. companies and, as a consequence, there may be less publicly
available information about such companies. Also foreign companies may not be
subject to uniform accounting, auditing and financial reporting standards and
requirements comparable to those applicable to U.S. companies.
The Funds are actively managed and will have high portfolio turnover. High
portfolio turnover necessarily results in greater transaction costs, such as
brokerage commissions, which the Funds must pay and short term capital gains (or
losses) to investors. Distributions to shareholders of short-term capital gains
are taxed as ordinary income under current federal income tax laws.
The Funds are a suitable investment only for those investors who have long-
term investment goals such as investing for retirement. If you may need to
redeem your shares in a hurry, or if you are uncomfortable with an investment
that will fluctuate in value, the Funds may not be the right choice for you.
4. HOW HAVE THE FUNDS PERFORMED?
The bar charts and tables that follow provide some indication of the risks of
investing in the Funds by showing changes in the Funds' performance from year to
year and by showing how their average annual returns over 1, 5 and 10 years
compare with those of the S&P 500 Index, NASDAQ Industrials Index and Russell
2000 Index. Please be aware that past performance is not necessarily an
indication of future performance.
BRANDYWINE FUND, INC.
(Total return per calendar year)
1990 0.56%
1991 49.18%
1992 15.68%
1993 22.58%
1994 0.02%
1995 35.75%
1996 24.92%
1997 12.02%
1998 -0.65%
1999 53.50%
Note: During the ten year period shown on the bar chart, the Fund's highest
total return for a quarter was 32.46% (quarter ended December 31, 1999) and the
lowest total return for a quarter was -18.88% (quarter ended September 30,
1998).
AVERAGE ANNUAL
TOTAL RETURNS
(FOR THE PERIODS ENDING ONE FIVE TEN
DECEMBER 31, 1999) YEAR YEARS YEARS
------------------ ---- ----- -----
Brandywine Fund 53.50% 23.71% 19.95%
S&P 500(1)<F1> 21.14% 28.66% 18.25%
Nasdaq(2)<F2> 71.67% 24.33% 17.46%
Russell 2000(3)<F3> 21.26% 16.69% 13.40%
BRANDYWINE BLUE FUND, INC.
(Total return per calendar year)
1992 13.13%
1993 27.20%
1994 2.31%
1995 32.33%
1996 23.23%
1997 19.25%
1998 -0.98%
1999 49.36%
Note: During the eight year period shown on the bar chart, the Fund's highest
total return for a quarter was 31.37% (quarter ended December 31, 1999) and the
lowest total return for a quarter was -19.93% (quarter ended September 30,
1998).
AVERAGE ANNUAL
TOTAL RETURNS SINCE THE INCEPTION
(FOR THE PERIODS ENDING ONE FIVE DATE OF THE FUND
DECEMBER 31, 1999) YEAR YEARS (JANUARY 10, 1991)
------------------ ---- ----- ------------------
Brandywine Blue 49.36% 23.53% 21.94%
S&P 500(1) 21.14% 28.66% 21.50%
Nasdaq(2) 71.67% 24.33% 21.39%
Russell 2000(3) 21.26% 16.69% 18.25%
(1)<F1> The S&P 500 Index consists of 500 stocks, mostly on the New York Stock
Exchange, selected by the Standard & Poor's Ratings Group. Each
stock's weighting is based on its relative total market value. Stocks
may be added or deleted from the Index which assumes reinvestment of
dividends.
(2)<F2> THE NASDAQ Industrials is capitalization-weighted to measure the
performance of all NASDAQ stocks in the industrial sector and does not
include income.
(3)<F3> The Russell 2000, a trademark of the Frank Russell Company, is the
smallest 2,000 of the 3,000 largest publicly traded companies in the
United States equity market and includes income.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and
hold shares of the Funds.
BRANDYWINE BRANDYWINE
FUND BLUE FUND
---------- ----------
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) None None
Maximum Deferred
Sales Charge (Load) None None
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends and Distributions None None
Redemption Fee None*<F4> None*<F4>
Exchange Fee None None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED
FROM FUND ASSETS)
Management Fees 1.00% 1.00%
Distribution and/or
Service (12b-1) Fees None None
Other Expenses 0.05% 0.08%
----- -----
Total Fund Operating
Expenses 1.05% 1.08%
*<F4> The Transfer Agent charges a fee of $12.00 for each wire redemption.
Example:
This example is intended to help you compare the cost of investing in the
Funds with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Funds for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Funds' operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions, your costs would be:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
Brandywine Fund $107 $334 $579 $1,283
Brandywine Blue $110 $343 $595 $1,317
INVESTMENT OBJECTIVES, STRATEGIES AND RISKS
THE FUNDS' INVESTMENT OBJECTIVE
Each Fund's investment objective is capital appreciation. The Funds may
change their investment objective without obtaining shareholder approval.
Please remember that an investment objective is not a guarantee. An
investment in the Funds may not appreciate and investors may lose money.
THE FUNDS' INVESTMENT STRATEGIES
The Funds' investment adviser believes the Funds are most likely to achieve
their investment objective if they consistently invest in companies that perform
better than the investment community expects. Accordingly, the Funds invest in
fundamentally sound companies that are experiencing a positive change.
Fundamentally sound companies generally have some or all of the following
attributes
Earnings growth of over 20% annually
High rates of profitability
Strong balance sheets
High quality of earnings
The positive change could be:
New products
New management
An acquisition or divestiture
The Brandywine Funds typically do not invest in companies with high
price-to-earnings ratios because these companies are less likely to perform
better than the investment community expects. The Funds are generally more
likely to invest in lesser known companies moving from a lower to higher market
share position within their industry groups than the largest and best known
companies in such groups.
PRINCIPAL RISKS OF
INVESTING IN THE FUNDS
Investing in shares of common stock or in ADRs involves risks. The common
stocks or ADRs in which the Funds invest may decline in value for any number of
reasons. If that happens, the value of your investment will decline as well.
The following are some of the main reasons why common stocks or ADRs purchased
by the Funds may decline in value.
1. The Funds' investment adviser was incorrect in its assessment of a
company's prospects.
2. The Funds' investment adviser was correct in its assessment of a
company's prospects, but the company was out-of-favor with other
investors.
3. Investor psychology in the marketplace shifted from equity securities in
general to other assets such as debt securities or money market
instruments (sometimes called "a flight to safety").
TEMPORARY DEFENSIVE POSITIONS
The Funds may, in response to adverse market, economic, political or other
conditions, take temporary defensive positions that are inconsistent with the
Funds' principal investment strategies but that are dictated by their sell
discipline. This means the Funds will attempt to avoid losses by investing in
money market instruments such as United States Treasury Bills, commercial paper
and repurchase agreements. The Funds will not be able to achieve their
investment objectives of capital appreciation to the extent that they invest in
money market instruments since these securities do not appreciate in value.
When the Funds are not taking a temporary defensive position, they still will
hold enough cash and money market instruments to meet current needs and to take
advantage of investment opportunities.
MANAGEMENT OF THE FUNDS
ABOUT THE ADVISER
Friess Associates, Inc. (the "Adviser"), 115 East Snow King Avenue, P. O. Box
576, Jackson, Wyoming 83001, manages the investment portfolios for the Funds.
In addition to the Funds, Friess Associates is the investment adviser to
individual and institutional clients with substantial investment portfolios.
Friess Associates was established in 1974 and was incorporated in 1980; it is
wholly owned by Foster S. Friess and Lynnette E. Friess, who are the sole
directors and the sole officers of Friess Associates, Inc.
COMPENSATION
As the investment adviser to the Funds, the Adviser manages the investment
portfolios for the Funds. The Funds pay the Adviser an annual investment
advisory fee, which is calculated daily and paid monthly, at an annual rate of
1% of the net assets of the Funds.
INVESTMENT DECISIONS
The Adviser supervises the investment portfolios of the Funds, directing the
purchase and sale of investment securities in the day to day management of the
Funds. All investment decisions are made by a team of investment professionals
representing the Adviser, any of whom may make recommendations subject to the
final approval of Foster Friess or another senior member of the Adviser's
management team to whom he may delegate the authority. Mr. Friess has been
President, Treasurer and a director of Brandywine Fund and Brandywine Blue Fund
since they were incorporated in 1985 and 1990, respectively. He is also
President and Chairman of the Board of Friess Associates, Inc. and Friess
Associates of Delaware, Inc.
DETERMINING NET ASSET VALUE
The price at which investors purchase shares of the Funds and at which
shareholders redeem shares of the Funds is called the net asset value. The
Funds calculate net asset value as of the close of regular trading on the New
York Stock Exchange (normally 4:00 p.m. Eastern Time) on each day the New York
Stock Exchange is open for trading. The New York Stock Exchange is closed on
most national holidays and on Good Friday. The Funds calculate net asset value
based on the market price of the securities (other than money market
instruments) they hold. They value most money market instruments they hold at
their amortized cost.
If the transfer agent, Firstar Mutual Fund Services, LLC, 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 Funds' share prices can be found daily in the mutual fund listings of
most major newspapers under the heading "Brandywine" or "Brandyw" for Brandywine
Fund and "BrndywBlue" or "BrandywBl" for Brandywine Blue Fund. The NASDAQ
symbols are "BRWIX" for Brandywine Fund and "BLUEX" for Brandywine Blue Fund.
ABOUT OUR MINIMUM REQUIREMENTS FOR
INITIAL INVESTMENT
The Board of Directors has established $25,000 as the minimum initial
investment in Brandywine Fund and $100,000 as the minimum initial investment in
Brandywine Blue Fund.
Employees, officers and directors of the Funds or the Adviser or firms
providing contractual services to the Funds, 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 Funds may, but are not required to, waive or lower the
requirement for charitable organizations and employee benefit plans whose
aggregate investment exceeds a fund's minimum initial investment. The officers
may also, but are not required to, waive or lower the requirement for
shareholders' spouses, parents, children and grandchildren under special
circumstances, considering the additional shares to be an extension of the
investment of the first shareholder.
INVESTING WITH
BRANDYWINE FUNDS
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 FUNDS ACCOUNT
1. Read this prospectus carefully.
2. Determine how much you want to invest.
MINIMUM INVESTMENTS ARE AS FOLLOWS:
BRANDYWINE FUND
TO OPEN A NEW ACCOUNT $25,000
TO ADD TO AN EXISTING ACCOUNT $1,000
BRANDYWINE BLUE FUND
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 Funds.)
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 application to add these
privileges which would require a signature guarantee.
5. Make your check payable to the Fund: Brandywine Fund, Inc. or Brandywine
Blue Fund, Inc.
All checks must be drawn on U.S. banks. The transfer agent will not accept
cash or third party checks.
FIRSTAR MUTUAL FUND SERVICES, LLC, THE FUNDS' TRANSFER AGENT, WILL CHARGE A
$25 FEE AGAINST A SHAREHOLDER'S ACCOUNT FOR ANY PAYMENT CHECK RETURNED FOR
INSUFFICIENT FUNDS. THE SHAREHOLDER WILL ALSO BE RESPONSIBLE FOR ANY LOSSES
SUFFERED BY THE FUNDS AS A RESULT.
6. Send application and check to:
BY MAIL
FOR FIRST CLASS MAIL
Brandywine Fund, Inc. or
Brandywine Blue Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
FOR OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL:
Brandywine Fund, Inc. or
Brandywine Blue Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
615 E. Michigan St., 3rd Floor
Milwaukee, WI 53202-5207
PLEASE DO NOT MAIL LETTERS BY OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL
TO THE POST OFFICE BOX ADDRESS.
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.
WIRE TO:
Firstar Bank, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
ABA 075000022
CREDIT:
Firstar Mutual Fund Services, LLC
Account 112-952-137
FURTHER CREDIT:
Brandywine Fund, Inc. or
Brandywine Blue Fund, Inc.
(shareholder account number)
(shareholder registration)
You should then send a properly signed share purchase application marked
"FOLLOW UP." Wired funds must be received prior to 4:00 p.m. Eastern time to be
eligible for same day pricing. THE FUNDS AND FIRSTAR BANK, N.A. ARE NOT
RESPONSIBLE FOR THE CONSEQUENCES OF DELAYS RESULTING FROM THE BANKING OR FEDERAL
RESERVE WIRE SYSTEM, OR FROM INCOMPLETE WIRING INSTRUCTIONS.
THROUGH BROKER-DEALERS, FINANCIAL INSTITUTIONS AND OTHERS
Some broker-dealers may sell shares of the Funds. These broker-dealers may
charge investors 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 Funds or
the Adviser. Some broker-dealers may purchase and redeem shares on a three day
settlement basis.
The Funds may enter into agreements with broker-dealers, financial
institutions or other service providers ("Servicing Agents") that may include
the Funds as investment alternatives in the programs they offer or administer.
Servicing agents may:
1. Become shareholders of record of the Funds. This means all requests to
purchase additional shares and all redemption requests must be sent through
the Servicing Agent.
2. Use procedures and impose restrictions that may be in addition to, or
different from, those applicable to investors purchasing shares directly
from the Funds.
3. Charge fees to their customers for the services they provide them. Also,
the Funds and/or the Adviser may pay fees to Servicing Agents to compensate
them for the services they provide their customers.
4. Be allowed to purchase shares by telephone with payment to follow the next
day. If the telephone purchase is made prior to the close of regular
trading on the New York Stock Exchange, it will receive same day pricing.
5. Be authorized to accept purchase orders on the Funds' behalf. This means
that the Funds will process the purchase order at the net asset value which
is determined following the Servicing Agent's acceptance of the customer's
order.
If you decide to purchase shares through Servicing Agents, please review
carefully the program materials provided to you by the Servicing Agent. When
you purchase shares of the Funds through a Servicing Agent, it is the
responsibility of the Servicing Agent to place your order with the Fund on a
timely basis. If the Servicing Agent does not, or if it does not pay the
purchase price to the Fund within the period specified in its agreement with the
Funds, it may be held liable for any resulting fees or losses.
OTHER INFORMATION ABOUT PURCHASING SHARES OF THE FUNDS
The Funds may reject any purchase application for any reason. The Funds will
not accept purchase orders made by telephone, unless they are from a Servicing
Agent which has an agreement with the Funds.
SHARE CERTIFICATES
Shares are credited to your account and certificates are not issued unless
you request them by writing to:
The Brandywine Funds
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
HOW TO GET IN TOUCH WITH
BRANDYWINE FUNDS
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 FUNDS
You may purchase additional shares (over $1000) 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 5. The
Funds do not accept telephone orders for purchase of shares.
Make your check payable to: Brandywine Fund, Inc. or Brandywine Blue Fund,
Inc.
All checks must be drawn on U.S. banks. Brandywine Funds will not accept
cash or checks made payable to third parties.
NOTE:
In the case of retirement plan accounts established through Servicing Agents,
additional shares may be purchased by the plans through Servicing Agents without
regard to the Funds' minimum subsequent purchase amounts.
HOW TO SELL SHARES IN
BRANDYWINE FUNDS
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:
o the account number(s)
o the amount of money or number of shares being redeemed
o the names on the account
o your daytime phone number
o the signature(s) of all registered account owners, if you plan to request a
redemption in writing
o 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 Funds.
2. You would like the check mailed to an address which has been changed
within 30 days of the redemption request.
o 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 Funds' transfer agent,
Firstar Mutual Fund Services, LLC, 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 Mutual Fund Services, LLC, the Funds' transfer agent, receives your
written request in proper form with all the required information listed above.
BY MAIL
FOR FIRST CLASS MAIL
Brandywine Fund, Inc. or
Brandywine Blue Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
FOR OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL:
Brandywine Fund, Inc. or
Brandywine Blue Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
615 E. Michigan St., 3rd Floor
Milwaukee, WI 53202-5207
PLEASE DO NOT MAIL LETTERS BY OVERNIGHT DELIVERY SERVICE OR REGISTERED MAIL
TO THE POST OFFICE BOX ADDRESS.
BY TELEPHONE
Instruct Firstar Mutual Fund Services, LLC that you want the option of
redeeming shares by telephone. This can be done by completing the appropriate
section on the share purchase application.
Assemble the same information that you would include in the letter of
instruction for a written redemption request.
Call Firstar Mutual Fund Services, LLC at 1-800-656-3017 or 1-414-765-4124.
PLEASE DO NOT CALL THE FUND OR THE ADVISER.
REDEMPTION BY TELEPHONE IS NOT AVAILABLE FOR IRA ACCOUNTS OR WHEN SHARE
CERTIFICATES HAVE BEEN ISSUED FOR AN ACCOUNT. FOR MORE INFORMATION ON TELEPHONE
REDEMPTIONS, PLEASE READ THE SECTION ENTITLED "ACCOUNT SERVICES AND POLICIES" ON
PAGE 9.
THROUGH SERVICING
AGENTS
If your shares are held by a Servicing Agent, you must redeem your shares
through the Servicing Agent. Contact the Servicing Agent for instructions on
how to do so.
AUTOMATICALLY
The Systematic Withdrawal Plan option may be activated if you have a minimum
of
$25,000 in your Brandywine
Fund account
$100,000 in your Brandywine
Blue 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 Mutual Fund Services, LLC 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 Mutual Fund
Services, LLC 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.
If you redeem by telephone, Firstar Mutual Fund Services, LLC normally will
transfer the redemption proceeds to your designated bank account if you have
elected to receive redemption proceeds by either electronic funds transfer or
wire. If you redeem shares through a Servicing Agent, you will receive your
redemption proceeds in accordance with the procedures established by the
Servicing Agent.
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
shareholder'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 Mutual
Fund Services, LLC, currently charges a $12 fee for each wire, which is deducted
from the shareholder's account.
HOW TO EXCHANGE SHARES
You may redeem shares in Brandywine Blue Fund and replace them with shares in
Brandywine Fund. You may also redeem shares in Brandywine Fund and replace
them with shares in Brandywine Blue Fund, providing you can meet or have met the
$100,000 minimum. Before exchanging your shares, you should first carefully
read the appropriate sections of the prospectus for the new Fund and you should
consider the tax consequences if yours is a taxable account.
IMPORTANT TAX NOTE:
WHEN YOU EXCHANGE SHARES, YOU ARE SELLING YOUR SHARES IN ONE FUND AND BUYING
SHARES OF ANOTHER 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 if you are opening a new account, (the application for both
Brandywine Fund and Brandywine Blue Fund is found at the back of this
Prospectus.) to:
Brandywine Fund, Inc.
or
Brandywine Blue Fund, Inc.
c/o Firstar Mutual Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
YOU MUST INCLUDE:
Account name
Account number
Amount or number of shares of Fund to be exchanged, sold or redeemed.
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 Funds on
exchanges. THE FUNDS DO NOT PERMIT TELEPHONE EXCHANGES.
DIVIDENDS, DISTRIBUTIONS
AND TAXES
The Funds distribute annually all of their net earnings in the form of
dividends and capital gains as distributions. As long as the Funds meet the
requirements for being a regulated investment company, which is their intent,
they pay no federal income tax on the earnings they distribute to the
shareholders. Consequently, distributions you receive from the Funds, whether
reinvested in additional shares of the Funds or taken as cash, are taxable to
the shareholder in all accounts except tax-exempt accounts.
Income dividends come from the dividends that the Funds earn from their
holdings as well as interest they receive from their cash investments, less
expenses. Capital gains are realized whenever the Funds sell securities for
higher prices than they paid for them. These capital gains are either short
term or long term depending on how long the Funds held the securities.
Most investors have their dividends and capital gains distributions
reinvested in additional shares of the Funds. 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 FUNDS
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 Funds, unless you request them to be paid in cash. You will
be advised of the number of shares purchased and the price paid following
each reinvestment. The amount so reinvested is added to the basis value of
your total investment.
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.
THE PRIMARY DISTRIBUTION WILL NORMALLY BE MADE NEAR THE END OF OCTOBER,
FOLLOWING THE CLOSE OF THE FUNDS' FISCAL YEAR, WITH A SECOND DISTRIBUTION, IF
REQUIRED, AT THE END OF DECEMBER.
In January, the Funds will mail you Form 1099 detailing your dividends and
distributions and their federal tax status, although you should verify your tax
liability with your tax adviser.
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. This may seem unfair to a taxable
investor who has yet to enjoy the returns of the Fund which generated the
distribution. However, your future tax liability may be reduced as a result of
the distribution. In any case, you may wish to consider the Funds' record date
before investing.
STOCKHOLDER 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 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 on the Funds. These
comprehensive reports include an assessment of the Funds' performance, various
comparisons to benchmarks, an overview of the markets, a report from the
Adviser, listings of the Funds' holdings and other items of interest. The
Adviser will also provide interim letters to update stockholders about important
matters.
ACCOUNT SERVICES AND POLICIES
IMMEDIATE BALANCE INFORMATION
We offer a 24-hour a day shareholders service. Just call 1-800-656-3017 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 Funds' site at: http://www.brandywinefunds.com
ACCOUNT MINIMUMS
The Funds reserve 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. 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.
TELEPHONE TRANSACTIONS
It may be difficult to reach the Funds 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 Funds nor Firstar Mutual Fund Services, LLC 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 Funds or their transfer agent, Firstar Mutual Fund Services, LLC.
The Funds reserve 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 Mutual Fund Services, LLC
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 Funds 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.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years. Certain information reflects
financial results for a single Fund share The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Funds (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the Funds' financial statements, are included in the Annual Report which is
available upon request. To obtain a copy, call 1-800-656-3017 or 1-414-765-
4124.
<TABLE>
BRANDYWINE FUND, INC.
YEARS ENDED SEPTEMBER 30,
---------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $25.99 $43.91 $32.83 $33.92 $24.77
Income from investment operations:
Net investment (loss) income (0.20)(1)<F5> 0.21 (0.07)(1)<F5> (0.08)(1)<F5> (0.10)
Net realized and unrealized gains (losses) on investments 9.64 (11.11) 12.50 2.83 10.70
------ ------ ------ ------ ------
Total from investment operations 9.44 (10.90) 12.43 2.75 10.60
Less distributions:
Dividends from net investment income (0.27) -- -- -- --
Distributions from net realized gains (0.07) (7.02) (1.35) (3.84) (1.45)
------ ------ ------ ------ ------
Total from distributions (0.34) (7.02) (1.35) (3.84) (1.45)
------ ------ ------ ------ ------
Net asset value, end of year $35.09 $25.99 $43.91 $32.83 $33.92
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN 36.8% (27.7%) 39.3% 10.0% 45.5%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 4,194,917 4,780,442 9,532,724 6,038,301 4,137,484
Ratio of expenses to average net assets 1.05% 1.04% 1.04% 1.06% 1.07%
Ratio of net investment (loss) income to average net assets (0.7%) 0.6% (0.3%) (0.4%) (0.4%)
Portfolio turnover rate 208.7% 263.7% 192.4% 202.8% 193.7%
</TABLE>
(1)<F5> In 1999, net investment loss per share was calculated using average
shares outstanding. In prior years, net investment loss per share was
calculated using ending balances prior to consideration of adjustments
for book and tax differences.
<TABLE>
BRANDYWINE BLUE FUND, INC.
YEARS ENDED SEPTEMBER 30,
------------------------------------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $22.13 $35.78 $25.26 $24.37 $17.18
Income from investment operations:
Net investment (loss) income (0.18)(1)<F6> 0.19 (0.10)(1)<F6> (0.05)(1)<F6> 0.00
Net realized and unrealized gains (losses) on investments 7.85 (8.75) 10.62 2.05 7.30
------ ------ ------ ------ ------
Total from investment operations 7.67 (8.56) 10.52 2.00 7.30
Less distributions:
Dividend from net investment income (0.21) -- -- -- --
Distributions from net realized gains (0.13) (5.09) -- (1.11) (0.11)
------ ------ ------ ------ ------
Total from distributions (0.34) (5.09) -- (1.11) (0.11)
------ ------ ------ ------ ------
Net asset value, end of year $29.46 $22.13 $35.78 $25.26 $24.37
------ ------ ------ ------ ------
------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN 35.2% (26.5%) 41.6% 8.9% 42.8%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 311,984 364,351 617,362 351,459 164,943
Ratio of expenses to average net assets 1.08% 1.06% 1.08% 1.13% 1.31%
Ratio of net investment (loss) income to average net assets (0.7%) 0.6% (0.5%) (0.4%) (0.4%)
Portfolio turnover rate 228.4% 299.5% 202.1% 196.9% 174.1%
</TABLE>
(1)<F6> In 1999, net investment loss per share was calculated using average
shares outstanding. In prior years, net investment loss per share was
calculated using ending balances prior to consideration of adjustments
for book and tax differences.
<TABLE>
(THE BRANDYWINE FUNDS LOGO)
PURCHASE APPLICATION
o This is a follow-up application to an investment by wire transfer.
<S> <C>
Mail to: The Brandywine Funds Overnight Express Mail to: The Brandywine Funds
c/o Firstar Mutual Fund c/o Firstar Mutual Fund
Services, LLC Services, LLC
P.O. Box 701 615 E. Michigan St., 3rd Floor
Milwaukee, WI 53201-0701 Milwaukee, WI 53202-5207
Use this form for individual, custodial, trust, profit-sharing or pension plan accounts. For any additional information please call
the Brandywine Funds at 1-800-656-3017 or 1-414-765-4124.
A. INVESTMENT THE MINIMUM INITIAL INVESTMENT FOR BRANDYWINE FUND IS $25,000 AND FOR BRANDYWINE BLUE FUND $100,000. MINIMUM
ADDITIONS TO EITHER FUND TO $1,000.
Wiring instructions: Firstar Bank, NA, 777 E. Wisconsin Ave., Milwaukee, WI 53202, ABA: 075000022.
For credit to Firstar Mutual Fund Services, LLC, Account # 112-952-137. For further credit (insert full name
of Fund) (shareholders name) & (account number). Notify Firstar Mutual Fund Services, LLC ----------------
------- ----------------- -------------- at 1-800-656-3017 or 1-414-765-4124 prior to sending wire.
Payment by o Check o Wire
o Brandywine Fund $---------------------- o Brandywine Blue Fund $----------------------
($25,000 MINIMUM) ($100,000 MINIMUM)
B. REGISTRATION
o Individual ------------------------- ------------------------- CITIZEN OF o U.S. o OTHER---------------------
NAME SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr)
o Joint Owner*<F7> ------------------------- ------------------------- CITIZEN OF o U.S. o OTHER---------------------
(cannot be a minor) NAME SOCIAL SECURITY # BIRTHDATE (Mo/Dy/Yr)
*<F7> Registration will be Joint Tenancy with Rights of Survivorship (JTWROS) unless otherwise specified.
o 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
o Corporation**<F8> ------------------------------------------------------------------------------------------------------------
(including NAME OF TRUSTEE(S) (IF TO BE INCLUDED IN REGISTRATION)***<F9>
Corporate
Pension Plans),**<F8>
Trust, Estate or
Guardianship***<F9>
o Partnership***<F9> ------------------------------------------------------------------------------------------------------------
NAME OF TRUST/CORPORATION**/PARTNERSHIP
o Other Entity***<F9> ---------------------------------------------------- --------------------------------------------------
SOCIAL SECURITY #/TAX ID # DATE OF AGREEMENT (Mo/Dy/Yr)
**<F8> Corporate Resolution is required. ***<F9> Additional documentation and certification may be requested.
C. MAILING ADDRESS o Duplicate Confirmation to:
------------------------------------------ ------------- ----------------------------------- ----- ------------------
STREET APT/SUITE FIRST NAME M.I. LAST NAME
--------------------------------- ------ --------------- --------------------------------------------- ---------------
CITY STATE ZIP STREET APT/SUITE
----------------------------------- -------------------- ----------------------------------- -------- ---------------
DAYTIME PHONE # EVENING PHONE # CITY STATE ZIP
D. DISTRIBUTION OPTIONS Capital gains & dividends will be reinvested if no option is selected.
o Capital Gains & Dividends Reinvested
o Capital Gains & Dividends in Cash
If the distribution is to be paid in cash, specify payment method below:
o Send check to mailing address in Section C.
o 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 I (we) authorize the Brandywine Funds, to act upon my (our) telephone instructions to redeem shares from
REDEMPTION OPTIONS this account. Please check all that may apply.
(800) 656-3017 OR o The proceeds will be mailed to the address in Section C.
(414) 765-4124 o 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.
o By EFT. Proceeds generally take up to 3 business days to reach your bank (complete bank information
below).
Your signed Application
must be received at least
15 business days prior --------------------------------------------------------- ---------------------------------------------
to initial transaction. NAME(S) ON BANK ACCOUNT ABA NUMBER OR ROUTING NUMBER
--------------------------------------------------------- ---------------------------------------------
An unsigned voided check BANK NAME ACCOUNT NUMBER
(for checking accounts) ---------------------------------------------------------------------------------------------------------
or a savings account BANK ADDRESS
deposit slip is required
with your Application.
To ensure proper crediting of your bank account, please attach a voided check or a deposit slip.
F. SYSTEMATIC I would like to withdraw from: Brandywine Fund, Inc.
WITHDRAWALS Account #---------------------- $----------------------(no minimum):
I would like to withdraw from: Brandywine Blue Fund, Inc.
Account #---------------------- $----------------------(no minimum):
o I would like to have payments made to me on or about the ---------- day of each month, Or
o 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.
o I would like my payments automatically deposited to my checking, NOW or savings account. Complete
bank account information below and attach a copy of a voided check or savings deposit slip. (A
check will be mailed to the address in Section C if this selection is not marked.)
---------------------------------------------------------------------------------------------------------
NAME(S) ON BANK ACCOUNT
---------------------------------------------------- --------------------------------------------------
BANK NAME ACCOUNT NUMBER
---------------------------------------------------------------------------------------------------------
BANK ADDRESS
An unsigned voided check (for checking accounts) or a savings account deposit slip is required with your
application. A balance of at least $10,000 is required.
G. SIGNATURE AND Neither the Funds nor their transfer agent will be responsible for the authenticity of transaction
CERTIFICATION instructions received by telephone, provided that reasonable security procedures have been followed.
REQUIRED BY THE
INTERNAL REVENUE By selecting the options in Section (E or F), I hereby authorize the Fund(s) to initiate credits to my
SERVICE 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*<F10>
--------------------------------------------------------- ----------------------------------------------
DATE (Mo/Dy/Yr) SIGNATURE OF CO-OWNER, if any
*<F10> 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
</TABLE>
To learn more about the Brandywine Funds, you may want to read the Statement of
Additional Information (or "SAI") which contains additional information about
the Funds. The Brandywine Funds have incorporated by reference the SAI into the
Prospectus. This means that you should consider the contents of the SAI to be
part of the Prospectus.
You also may learn more about Brandywine Funds' investments by reading the
Funds' annual and semi-annual reports to shareholders. The annual report
includes a discussion of the market conditions and investment strategies that
significantly affected the performance of each Fund during the fiscal year.
The SAI and the Funds' annual and semi-annual reports are available, without
charge, by calling 1-800-656-3017 or 1-414-765-4124 or by writing to:
The Brandywine Funds
3908 Kennett Pike
P.O. Box 4166
Greenville, Delaware 19807
Prospective investors and shareholders who have questions about Brandywine Funds
may also call the above numbers or write to the above address.
The general public can review and copy information about Brandywine Funds
(including the SAI) at the Securities and Exchange Commission's Public Reference
Room in Washington, D.C. (Please call 1-202-942-8090 for information on the
operations of the Public Reference Room.) Reports and other information about
Brandywine Funds are also available on the EDGAR Database at the Securities and
Exchange Commission's Internet site at http://www.sec.gov and copies of this
information may be obtained, upon payment of a duplicating fee, by electronic
request at the following E-mail address: [email protected], or by writing to:
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-6009
Please refer to Brandywine Funds Investment Company Act File No.811-0447 for
Brandywine Fund and No. 811-06221 for Brandywine Blue Fund when seeking
information about the Funds from the Securities and Exchange Commission.
