<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 18, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 /X/
(FILE NO. 33-98182)
PRE-EFFECTIVE AMENDMENT NO. 1 /X/
POST-EFFECTIVE AMENDMENT NO. __ / /
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
(FILE NO. 811-06317)
AMENDMENT NO. 8 /X/
(CHECK APPROPRIATE BOX OR BOXES.)
------------------------
THE JUNDT GROWTH FUND, INC.
(Exact Name of Registrant as Specified in Charter)
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(Address of Principal Executive Offices) (Zip Code)
(612) 541-0677
(Registrant's Telephone Number, including Area Code)
JAMES R. JUNDT
JUNDT ASSOCIATES, INC.
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(Name and Address of Agent for Service)
COPY TO:
JAMES E. NICHOLSON
FAEGRE & BENSON
PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
2200 NORWEST CENTER
90 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
------------------------
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM AMOUNT MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING BEING OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Common Shares, par value $.01
per share.................... * * * $500.00**
</TABLE>
* Pursuant to Regulation 270.24f-2 under the Investment Company Act of 1940,
The Jundt Growth Fund, Inc. hereby elects to register an indefinite number of
shares of its Common Stock.
** Previously paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE JUNDT GROWTH FUND, INC.
REGISTRATION STATEMENT ON FORM N-1A
CROSS REFERENCE SHEET FOR ITEMS REQUIRED BY FORM N-1A
<TABLE>
<CAPTION>
ITEM NO. CAPTION IN PROSPECTUS
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
1 Cover page
2 Fees and Expenses
3 Financial Highlights
4 The Fund; Investment Objective and Policies; Purchase Information
5 Management of the Fund
5A Not applicable
6 The Fund; Purchase Information; How to Buy Fund Shares; Dividends, Distributions and Taxes; General
Information
7 Purchase Information; How to Buy Fund Shares; Determination of Net Asset Value
8 How to Redeem Fund Shares; Determination of Net Asset Value
9 Not applicable
CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
--------------------------------------------------------------------------------------------------------
10 Cover page
11 Table of Contents
12 Not applicable
13 Investment Objective, Policies and Restrictions
14 Directors and Officers
15 General Information
16 Advisory, Administrative and Distribution Agreements
17 Advisory, Administrative and Distribution Agreements
18 General Information; Financial and Other Information
19 Special Purchase Plans; Monthly Cash Withdrawal Plan; Determination of Net Asset Value
20 Taxes
21 Advisory, Administrative and Distribution Agreements
22 Calculation of Performance Data
23 Financial and Other Information; Financial Statements
</TABLE>
i
<PAGE>
THE JUNDT GROWTH FUND, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART A
PROSPECTUS
<PAGE>
THE JUNDT GROWTH FUND, INC.
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
------------------
The Jundt Growth Fund, Inc. (the "Fund") is a professionally managed,
diversified, open-end management investment company, commonly known as a "mutual
fund." The Fund currently offers its shares of common stock in four classes
(Class A, Class B, Class C and Class D), each sold pursuant to different sales
arrangements and bearing different expenses (each, a "Class" and, collectively,
the "Classes." Class A shares are offered for sale exclusively to certain
specified investors and are not offered for sale to the public generally. See
"Purchase Information."
The Fund's investment objective is to provide long-term capital appreciation
by investing primarily in a diversified portfolio of equity securities of
companies that are believed by the Fund's investment adviser, Jundt Associates,
Inc. (the "Investment Adviser"), to have significant potential for growth in
revenue and earnings. Income is not a consideration in the selection of
investments and is not an investment objective of the Fund. Like all mutual
funds, attainment of the Fund's investment objective cannot be assured. See
"Investment Objective and Policies."
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Please read this Prospectus
carefully before investing and retain it for future reference. A Statement of
Additional Information, dated December 29, 1995, containing more information
about the Fund (which is incorporated herein by reference), has been filed with
the Securities and Exchange Commission (the "SEC") and is available upon request
and without charge by calling the Fund at the telephone number listed above.
AN INVESTMENT IN THE FUND INVOLVES CERTAIN RISKS, AS DESCRIBED UNDER
"INVESTMENT OBJECTIVE AND POLICIES." FUND SHARES ARE NOT OBLIGATIONS, DEPOSITS
OR ACCOUNTS OF, OR ENDORSED OR GUARANTEED BY, ANY BANKING INSTITUTION, ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE "FDIC")
OR ANY OTHER FEDERAL AGENCY AND INVOLVE INVESTMENT RISK INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
AS WITH ALL MUTUAL FUNDS, 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.
------------------------
PROSPECTUS DATED DECEMBER 29, 1995
<PAGE>
THE FUND
The Fund is a professionally managed, diversified, open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Fund was incorporated under the laws
of the State of Minnesota on May 20, 1991 and originally commenced operations on
September 3, 1991 as a closed-end investment company. The Fund converted to an
open-end investment company immediately following the close of business on the
New York Stock Exchange on December 28, 1995 (the "Open-End Conversion"). The
Fund's principal business address is 1550 Utica Avenue South, Suite 950,
Minneapolis, Minnesota 55416.
PURCHASE INFORMATION
The Fund offers investors the choice among three Classes of shares (Class B,
Class C and Class D), which offer different sales charges and bear different
expenses. See "Fees and Expenses" below. These alternatives permit an investor
to choose the method of purchasing shares that is most beneficial, given the
amount of the purchase, the length of time the investor expects to hold the
shares and other circumstances. AS MORE FULLY DISCUSSED BELOW, CLASS A SHARES
ARE OFFERED FOR SALE EXCLUSIVELY TO CERTAIN SPECIFIED INVESTORS AND ARE NOT
OFFERED FOR SALE TO THE GENERAL PUBLIC.
Investors making investments that, based upon the amount of the investment,
would qualify for reduced Class D sales charges may wish to consider Class D
shares, as opposed to Class B or Class C shares, which bear higher Rule 12b-1
charges. Other investors may wish to consider Class B or Class C shares because
all of the purchase price is invested immediately. Orders for Class B shares for
$250,000 or more will be treated as orders for Class D shares (or Class A
shares, if the investor is eligible to purchase Class A shares) or declined.
Sales personnel may receive different compensation depending on which Class of
shares they sell.
Effective upon the Open-End Conversion, each issued and outstanding Fund
share was converted into a Class A share of the reorganized open-end fund. Class
A shares are available for additional investments only by: (a) Fund shareholders
at the time of the Open-End Conversion, but only so long as such shareholders
remain Fund shareholders (a liquidation of the investor's account will terminate
his or her privilege to invest in Class A shares); (b) directors, officers,
employees and consultants of the Fund (including partners and employees of
outside legal counsel to the Fund), the Investment Adviser and the Fund's
principal distributor, U.S. Growth Investments, Inc. (the "Distributor"),
members of their immediate families, and their lineal ancestors and descendants;
and (c) accounts for the benefit of any of the foregoing. Class A shares will
also be issued in connection with the reinvestment of dividends and
distributions on outstanding Class A shares.
2
<PAGE>
FEES AND EXPENSES
The following fee and expense summary format was developed for use by all
mutual funds to assist investors in making investment decisions. Of course,
investors contemplating an investment in Fund shares should also consider other
relevant factors, including the Fund's investment objective and historical
performance.
<TABLE>
<CAPTION>
CLASS A CLASS B(A) CLASS C CLASS D
-------- ---------- -------- --------
<S> <C> <C> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge Imposed on Purchases....... 5.25% NONE(b) NONE(b) 5.25%
Sales Charge Imposed on Dividend
Reinvestments.................................. NONE NONE NONE NONE
Maximum Deferred Sales Load (as a percentage of
original purchase price or redemption proceeds,
whichever is lower) (c)........................ 1.00%(d) 4.00% 1.00% 1.00%(d)
Annual Fund Operating Expenses (as a percentage of
average net assets) (e):
Investment Advisory Fees (f).................... 1.00% 1.00% 1.00% 1.00%
12b-1 Fees:
Account Maintenance Fees...................... NONE 0.25% 0.25% 0.25%
Distribution Fees............................. NONE 0.75%(b) 0.75%(b) NONE
Other Expenses:
Administrative Fees........................... 0.20% 0.20% 0.20% 0.20%
Shareholder Servicing Costs................... 0.11% 0.13% 0.13% 0.11%
Other 0.24% 0.24% 0.24% 0.24%
-------- ---------- -------- --------
Total Fund Operating Expenses..................... 1.55% 2.57% 2.57% 1.80%
-------- ---------- -------- --------
-------- ---------- -------- --------
</TABLE>
- ------------------------
(a) Class B shares will convert automatically into Class D shares on their
designated conversion date (the 15th day of each month or the next business
day if the 15th is not a business day) immediately following the eighth
anniversary of their sale. See "How to Buy Fund Shares."
(b) Class B and Class C shares are sold without a front-end sales charge;
however, their higher 12b-1 fees may cause long-term Class B and Class C
shareholders to pay more than the economic equivalent of the maximum
permitted front-end sales charges.
(c) In addition to any applicable deferred sales loads, service agents may
charge a nominal fee for effecting redemptions of Fund shares.
(d) A contingent deferred sales charge of 1% is imposed on certain redemptions
of Class A or Class D shares that were purchased without an initial sales
charge as part of an investment of $1 million or more. See "How to Buy Fund
Shares -- Class A Shares" and "-- Class D Shares."
(e) Annual Fund Operating Expenses set forth in the above table assume that the
Fund has aggregate net assets of approximately $225 million. However,
following the Open-End Conversion, Fund asset levels can be expected to
fluctuate. Because certain Fund expenses, as a percentage of average net
assets, will vary inversely with Fund asset levels, Fund expenses (as a
percentage of average net assets) following the Open-End Conversion may
differ materially from expense levels reflected in the above table.
(f) The fee paid by the Fund to the Investment Adviser is higher than the
advisory fee paid by most other investment companies.
3
<PAGE>
EXAMPLE:
Investors would pay the following expenses on a $1,000 investment, assuming
a 5% annual return and redemption at the end of each time period:
<TABLE>
<CAPTION>
CLASS A (1) CLASS B CLASS C CLASS D (1)
------------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
One year......................................... $ 67 $ 66 $ 36 $ 70
Three years...................................... 99 110 80 106
Five years....................................... 133 157 137 145
Ten years........................................ 227 272 290 253
</TABLE>
- ------------------------
(1) Numbers do not reflect the 1% contingent deferred sales charge that may be
imposed on certain redemptions of Class A and Class D shares.
Investors in Class B and Class C shares would pay the following expenses on
the same investment, assuming no redemption at the end of each time period:
<TABLE>
<CAPTION>
CLASS B CLASS C
----------- -----------
<S> <C> <C>
One year................................................................... $ 26 $ 26
Three years................................................................ 80 80
Five years................................................................. 137 137
Ten years.................................................................. 272 290
</TABLE>
The purpose of the fee and expense information set forth above is to assist
investors in understanding the various costs and expenses that investors will
bear directly or indirectly in each Class of the Fund's shares. More detailed
information regarding these expenses is set forth under "Management of the
Fund." THE FOREGOING INFORMATION IS NOT BASED ON HISTORICAL FINANCIAL EXPERIENCE
OF THE FUND BUT REPRESENTS MANAGEMENT'S GOOD FAITH ESTIMATE OF FUND EXPENSES
FOLLOWING THE OPEN-END CONVERSION BASED ON AN ASSUMED ASSET LEVEL OF $225
MILLION. THE FOREGOING EXAMPLES SHOULD NOT BE CONSIDERED REPRESENTATIONS OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The information presented in this section relates to periods ended prior to
the Open-End Conversion. This information has been derived from financial
statements of the Fund that are included in the Statement of Additional
Information and should be read in conjunction with such financial statements.
Except for the financial statements as of June 30, 1995 and for the six-month
period then ended (which have not been audited), such financial statements have
been audited by KPMG Peat Marwick LLP, the Fund's independent auditors, whose
report thereon also is included in the Statement of Additional Information.
Per share data for a share of capital stock outstanding throughout each
period and selected supplemental and ratio information for each period indicated
are as follows:
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM PERIOD FROM
1/01/95 7/01/94 YEAR ENDED YEAR ENDED 9/3/91*
TO 6/30/95 TO 12/31/94 6/30/94 6/30/93 TO 6/30/92
----------- ----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period.............. $ 14.95 $ 13.53 $ 15.10 $ 13.78 $ 14.07
----------- ----------- ----------- ----------- -----------
Operations:
Investment income (loss) -- net................. (0.05) (0.07) (0.11) (0.05) 0.13
Net realized and unrealized gain (loss) on
investments.................................... 1.50 1.83 (0.57) 1.38 (0.30)
----------- ----------- ----------- ----------- -----------
Total from operations............................. 1.45 1.76 (0.68) 1.33 (0.17)
Distributions to shareholders:
From investment income -- net................... -- -- -- (0.01) (0.12)
From realized capital gains -- net.............. -- -- (0.52) -- --
Return of capital............................... -- (0.34) (0.37) -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of period.................... $ 16.40 $ 14.95 $ 13.53 $ 15.10 $ 13.78
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Total investment return, net asset value (1)...... 9.70% 13.06% (4.53)% 9.64% (1.30)%
Net assets at end of period (000's omitted)....... $244,958 $223,317 $202,192 $473,768 $465,055
Ratio of expenses to average net assets........... 1.45%+ 1.58%+ 1.55% 1.40% 1.37%+
Ratio of net investment income (loss) to average
net assets....................................... (0.71)%+ (0.98)%+ (0.63)% (0.36)% 1.05%+
Portfolio turnover rate (excluding short-term
securities)...................................... %19 %19 %70 %66 %20
</TABLE>
- --------------------------
* Commencement of operations.
(1) Total investment return, net asset value, is based on the change in net
asset value of a share during the period and assumes reinvestment of
distributions at actual prices pursuant to the Fund's dividend reinvestment
plan.
+ Adjusted to an annual basis.
5
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective and certain other specifically designated
investment policies and restrictions are deemed to be "fundamental" and, as
such, may not be changed except by a vote of a "majority" (as defined in the
Investment Company Act) of the Fund's outstanding shares. Except for the Fund's
investment objective and the policies and restrictions that are specifically
designated as "fundamental," each of the Fund's investment policies and
restrictions are "non-fundamental" and, as such, may be changed or eliminated by
the Fund's Board of Directors without any vote by Fund shareholders. If a
percentage limitation set forth in any of the following investment policies and
restrictions is adhered to at the time a transaction is effected, later changes
in the percentage resulting from changes in value or in the number of
outstanding securities of the issuer will not be considered a violation.
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide long-term capital appreciation
by investing primarily in a diversified portfolio of equity securities of
companies that are believed by the Investment Adviser to have significant
potential for growth in revenue and earnings. Income is not a consideration in
the selection of investments and is not an investment objective of the Fund.
Like all mutual funds, attainment of the Fund's investment objective cannot be
assured.
INVESTMENT POLICIES
The Fund invests primarily in equity securities of companies that are
believed by the Investment Adviser to have significant potential for growth in
revenues and earnings. In normal market conditions, the Investment Adviser
endeavors to invest substantially all (and no less than 65%) of the Fund's
assets in equity securities. The Investment Adviser emphasizes larger
capitalization companies, with at least half of the Fund's equity securities
consisting of companies with annual revenues over $750 million, and attempts to
maintain equity positions in 30 to 50 of what it believes are the fastest
growing American corporations (with some investments in comparable foreign
companies).
The Fund may invest up to 20% of the value of its total assets in securities
of foreign issuers. The Fund may only purchase foreign securities that are
represented by American Depository Receipts listed on a domestic securities
exchange or included in the NASDAQ National Market System, or foreign securities
listed directly on a domestic securities exchange or included in the NASDAQ
National Market System. Interest or dividend payments on such securities may be
subject to foreign withholding taxes. The Fund's investments in foreign
securities involve considerations and risks not typically associated with
investments in securities of domestic companies, including unfavorable changes
in currency rates and exchange control regulations, reduced and less reliable
information about issuers and markets, different accounting standards,
illiquidity of securities and markets, local economic or political instability
and greater market risk in general.
Pending the investment or reinvestment of proceeds from the issuance of Fund
shares or the sale of Fund portfolio investments, the Fund may invest in
short-term money market securities and bank deposits in domestic branches of
U.S. banks having total assets in excess of $1 billion that are members of the
FDIC. In normal market conditions, short-term money market securities and bank
deposits may comprise up to 35% of the Fund's total assets; however, when the
Investment Adviser believes that economic conditions warrant a defensive
investment posture, the Fund may temporarily invest greater than 35% of its
total assets in such investments. The short-term money market securities in
which the Fund may invest include obligations of the United States Government,
its
6
<PAGE>
agencies or instrumentalities ("U.S. Government Securities"); commercial paper
rated A-1 or higher by Standard & Poor's Corporation and/or Prime-1 or higher by
Moody's Investor Services, Inc.; repurchase agreements; and certificates of
deposit and banker's acceptances issued by domestic branches of U.S. banks
having total assets in excess of $1 billion that are members of the FDIC.
Additionally, to the extent permitted by applicable law, the Fund may invest to
a limited extent in money market mutual funds (which, to the extent of any such
investment, would subject the Fund and its shareholders to duplicate expenses).
The U.S. Government Securities in which the Fund may invest include
securities issued or guaranteed as to payment of principal and interest by the
U.S. Government or its agencies or instrumentalities. The Fund may invest in
direct obligations of the U.S. Treasury, such as U.S. Treasury bills, and in
obligations of U.S. Government agencies or instrumentalities, including, but not
limited to, the Federal National Mortgage Association and the Student Loan
Mortgage Association. Obligations of U.S. Government agencies or
instrumentalities, such as the Federal National Mortgage Association and the
Student Loan Mortgage Association, may be merely backed by the credit of the
agency or instrumentality issuing the obligations and not by the full faith and
credit of the U.S. Treasury.
The Fund intends to purchase and hold securities for long-term capital
appreciation and does not expect to trade for short-term gain. Accordingly, it
is anticipated that the annual portfolio turnover rate normally will not exceed
100%. The portfolio turnover rate is calculated by dividing the lesser of sales
or purchases of portfolio securities by the average monthly value of the Fund's
portfolio securities. For purposes of this calculation, portfolio securities
exclude all options, futures and securities having a maturity when purchased of
one year or less. The turnover rate has a direct effect on the transaction costs
(including brokerage costs) to be borne by the Fund.
The net asset value of the Fund itself will fluctuate with changes in the
value of its portfolio securities. The Fund is intended for investors seeking
long-term capital appreciation and is not intended to provide a trading vehicle
for those who wish to profit from short-term swings in the stock market.
OTHER INVESTMENT POLICIES
REPURCHASE AGREEMENTS. Except as limited by the Fund's policy regarding
illiquid securities (see "Illiquid Securities" below), the Fund may invest
without limitation in repurchase agreements with securities dealers and member
banks of the Federal Reserve System. Repurchase agreements involve the purchase
by the Fund of an underlying debt instrument, subject to an obligation of the
seller to repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. Certain costs may be incurred
by the Fund in connection with the sale of the securities if the seller does not
repurchase them in accordance with the repurchase agreement. In addition, if
bankruptcy proceedings are commenced with respect to the seller of the
securities, realization on the securities by the Fund may be delayed or limited.
The Fund's Board of Directors has established procedures, which it periodically
reviews, pursuant to which the Investment Adviser will monitor the
creditworthiness of the dealers and banks with which the Fund enters into
repurchase agreements.
LENDING OF PORTFOLIO SECURITIES. To enhance the return on its portfolio,
the Fund may lend securities in its portfolio representing up to 25% of its
total assets, taken at market value, to securities firms and financial
institutions, provided that each loan is secured continuously by collateral in
the
7
<PAGE>
form of cash, high quality money market instruments or short-term U.S.
Government Securities adjusted daily to have a market value at least equal to
the current market value of the securities loaned. These loans are terminable at
any time, and the Fund will receive any interest or dividends paid on the loaned
securities. In addition, it is anticipated that the Fund may share with the
borrower some of the income received on the collateral for the loan or the Fund
will be paid a premium for the loan. The risk in lending portfolio securities,
as with other extensions of credit, consists of possible delay in recovery of
the securities or possible loss of rights in the collateral should the borrower
fail financially. In determining whether the Fund will lend securities, the
Investment Adviser will consider all relevant factors and circumstances. The
Fund will only enter into loan arrangements with broker-dealers, banks or other
institutions which the Investment Adviser has determined are creditworthy under
guidelines established by the Board of Directors.
FUTURES AND OPTIONS TRANSACTIONS. Through the purchase and sale of stock
index futures contracts, options on stock indices, stock options and options on
stock index futures contracts, the Fund at times may seek to hedge against
either a decline in the value of securities owned by it or an increase in the
price of securities which it plans to purchase. The Fund is not a commodity
pool, and all futures transactions engaged in by the Fund must constitute bona
fide hedging or other permissible transactions in accordance with the rules and
regulations promulgated by the Commodity Futures Trading Commission.
Options purchased and written by the Fund may be exchange traded or may be
options entered into by the Fund in negotiated transactions with investment
dealers and other financial institutions ("OTC Options"), such as commercial
banks or savings and loan associations, deemed creditworthy by the Investment
Adviser. OTC Options are not as liquid as exchange traded options, and it may
not be possible for the Fund to dispose of an OTC Option it has purchased or
terminate its obligations under an OTC Option it has written at a time when the
Investment Adviser believes it would be advantageous to do so.
The use of futures and options involves the risk of imperfect correlation
between movements in futures and options prices and movements in the price of
securities which are the subject of the hedge. Expenses and losses incurred as a
result of the above hedging strategies would reduce the Fund's performance. For
a further discussion of futures and options transactions, including certain
additional risks associated therewith, see Appendix A.
ILLIQUID SECURITIES. The Fund may invest up to 10% of the value of its
assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Fund's investment objective.
Such securities may include securities that are not readily marketable, such as
certain securities that are subject to legal or contractual restrictions on
resale, repurchase agreements providing for settlement in more than seven days
after notice, and certain options traded in the over-the-counter market and
securities used to cover such options. As to these securities, the Fund is
subject to the risk of unavailability of a buyer for a favorable price if the
Fund desires to sell these securities. Such lack of liquidity could adversely
affect the value of the Fund's net assets.
INVESTMENT RESTRICTIONS
In addition to the investment policies set forth above, the Fund has adopted
certain fundamental investment restrictions (set forth in their entirety in the
Statement of Additional Information), which may not be amended without the vote
of a "majority" (as defined in the Investment Company Act) of the Fund's
outstanding voting securities. These restrictions prohibit the Fund, among other
matters,
8
<PAGE>
from (a) investing more than 25% of its total assets in any one industry
(disregarding investments in securities of the U.S. Government, its agencies and
instrumentalities); or (b) borrowing money or issuing senior securities (as
defined in the Investment Company Act), except that the Fund may borrow in
amounts not exceeding 15% of its total assets from banks for temporary or
emergency purposes, including the meeting of redemption requests which might
require the untimely disposition of securities. Additionally, the Fund has
adopted certain non-fundamental investment restrictions (also set forth in their
entirety in the Statement of Additional Information), which may be changed by
the Fund's Board of Directors without the approval of the Fund's shareholders.
According to these restrictions, the Fund, among other matters, may not: (a)
invest more than 10% of its assets (taken at market value at the time of
purchase) in the outstanding securities of any single issuer; (b) invest more
than 10% of its total assets in securities of issuers which together with any
predecessors have a record of less than three years of continuous operations; or
(c) own more than 10% of the outstanding voting securities of any one issuer.
BROKERAGE AND PORTFOLIO TRANSACTIONS
Subject to policies established by the Board of Directors of the Fund, the
Investment Adviser is responsible for investment decisions and for the execution
of the Fund's portfolio transactions. The Fund has no obligation to deal with
any particular broker or dealer in the execution of transactions in portfolio
securities. In executing such transactions, the Investment Adviser seeks to
obtain the best price and execution for its transactions. While the Investment
Adviser generally seeks reasonably competitive commission rates, the Fund does
not necessarily pay the lowest commission.
Where best price and execution may be obtained from more than one broker or
dealer, the Investment Adviser may, in its discretion, purchase and sell
securities through brokers or dealers who provide research, statistical and
other information to the Investment Adviser. Information so received will be in
addition to and not in lieu of the services required to be performed by the
Investment Adviser under its investment advisory agreement with the Fund and the
expenses of the Investment Adviser will not necessarily be reduced as a result
of the receipt of such supplemental information. Such information may be useful
to the Investment Adviser in providing services to clients other than the Fund.
Conversely, such information provided to the Investment Adviser by brokers and
dealers through whom other clients of the Investment Adviser effect securities
transactions may be useful to the Investment Adviser in providing services to
the Fund.
Consistent with the rules and regulations of the National Association of
Securities Dealers, Inc. (the "NASD"), the Investment Adviser may also consider
distribution of Fund shares when allocating Fund portfolio transactions between
or among brokers and dealers that otherwise offer best price and execution.
The Fund will not purchase securities from, or sell securities to, the
Investment Adviser.
Certain other clients of the Investment Adviser have investment objectives
and policies similar to those of the Fund. The Investment Adviser may, from time
to time, make recommendations that result in the purchase or sale of a
particular investment by its other clients simultaneously with the Fund. If
transactions on behalf of more than one client during the same period increase
the demand for the investments being purchased or the supply of investments
being sold, there may be an adverse effect on price or quantity. In addition, it
is possible that the number of options or futures transactions that the Fund may
enter into may be affected by options or futures transactions entered into by
other investment advisory clients of the Investment Adviser. It is the policy of
the Investment Adviser to
9
<PAGE>
allocate advisory recommendations and the placing of orders in a manner that is
deemed equitable by the Investment Adviser to the accounts involved, including
the Fund. When two or more of the clients of the Investment Adviser (including
the Fund) are purchasing or selling the same security on a given day from, to or
through the same broker-dealer, such transactions may be averaged as to price.
MANAGEMENT OF THE FUND
The Fund's Board of Directors is responsible for the overall management and
operation of the Fund. The Fund's officers are responsible for the day-to-day
operations of the Fund under the supervision of the Board of Directors.
INVESTMENT ADVISER
Pursuant to an Investment Advisory Agreement with the Fund (the "Investment
Advisory Agreement"), the Investment Adviser serves as the Fund's investment
adviser and, as such, is responsible for the overall management of the Fund's
investment portfolio. The Investment Adviser was incorporated in December 1982.
As of November 30, 1995, the Investment Adviser managed approximately $3.0
billion of assets for the Fund and 21 institutional clients.
The Investment Adviser is a growth-oriented manager. The Investment Adviser
believes that the U.S. economy, due to its heterogeneous nature and immense
size, provides investors with significant growth opportunities. In selecting
investments, the Investment Adviser emphasizes fundamental prospects of
individual companies rather than macroeconomic trends.
Under the Investment Advisory Agreement, the Fund pays the Investment
Adviser a monthly fee equal on an annual basis to 1.00% of the Fund's average
daily net assets. This fee is higher than the advisory fee paid by most other
investment companies.
James R. Jundt serves as director, Chairman of the Board, Chief Executive
Officer and Secretary of the Investment Adviser and beneficially owns 76% of the
Investment Adviser's capital stock. Mary Joann Jundt, wife of James R. Jundt, is
the trustee of a trust that beneficially owns 4% of the Investment Adviser's
capital stock. The current beneficiaries of the trust are the children of Mr.
and Mrs. Jundt (including Marcus E. Jundt, Vice Chairman of the Board and a
director of the Investment Adviser) and the issue of such children. Mrs. Jundt
votes the shares owned by the trust. The remaining 20% of the Investment
Adviser's capital stock is beneficially owned by Gail M. Knappenberger, formerly
a director and officer of the Investment Adviser.
PORTFOLIO MANAGERS
The Investment Adviser has no formal investment committee. All investment
decisions are made by one or more of the firm's four portfolio managers (James
R. Jundt, Donald M. Longlet, Thomas L. Press and Marcus E. Jundt). The
Investment Adviser places significant emphasis on the team approach in
conducting its portfolio management activities. The portfolio managers confer
frequently throughout the typical business day as to investment opportunities,
and most investment decisions are made after consultation with the other
portfolio managers.
James R. Jundt, CFA, began his investment career in 1964 with Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), New York, New York, as a
security analyst before joining Investors Diversified Services, Inc. in
Minneapolis, Minnesota (now known as American Express Financial Advisers, Inc.)
in 1969, where he served in analytical and portfolio management positions until
1979. From 1979 to 1982, Mr. Jundt was a portfolio manager for St. Paul
Advisers, Inc. ("St. Paul
10
<PAGE>
Advisers," subsequently known as AMEV Advisers, Inc. and now known as Fortis
Advisers, Inc.) in Minneapolis. In December 1982, Mr. Jundt left St. Paul
Advisers and founded the Investment Adviser. He has served as Chairman of the
Board, President and Chief Executive Officer of Jundt Funds, Inc. since 1995.
Mr. Jundt has approximately 31 years of investment experience.
Donald M. Longlet, CFA, began his investment career in 1968 with
Northwestern National Bank of Minneapolis (now known as Norwest Bank Minnesota,
National Association) where he served as a security analyst and portfolio
manager until 1982. Mr. Longlet worked as a portfolio manager for AMEV Advisers,
Inc. (now known as Fortis Advisers, Inc.) from 1983 until 1989, when he joined
the Investment Adviser as a portfolio manager. He has served as Vice President
and Treasurer of Jundt Funds, Inc. since 1995. Mr. Longlet has approximately 27
years of investment experience.
Thomas L. Press was a Senior Vice President of Investment Advisers, Inc. and
Co-Manager of the IAI Emerging Growth Fund from 1992 until July 1993, when he
joined the Investment Adviser as a portfolio manager. From 1987 to 1992, Mr.
Press was a Vice President, Institutional Sales in the Chicago office of Morgan
Stanley & Co., Inc., and prior thereto, was an institutional salesman and trader
in the Chicago office of Salomon Brothers Inc. Mr. Press has approximately 10
years of investment experience.
Marcus E. Jundt has been a portfolio manager for the Investment Adviser
since June 1992. Mr. Jundt was employed as a research analyst for Victoria
Investors from 1988 to 1992, and from 1987 to 1988 was employed by Cargill
Investor Services, where he worked on the floor of the Chicago Mercantile
Exchange. Mr. Jundt has approximately 8 years of investment and related
experience.
ADMINISTRATOR
Under the terms of an Administration Agreement between Princeton
Administrators, L.P. (the "Administrator") and the Fund (the "Administration
Agreement"), the Administrator performs or arranges for the performance of
certain administrative services (I.E., services other than investment advice and
related portfolio activities) necessary for the operation of the Fund,
including, but not limited to, maintaining certain of the books and records of
the Fund, preparing or reviewing certain reports and other documents required by
United States federal, state and other applicable laws and regulations to
maintain the registration of the Fund and its shares and providing the Fund with
administrative office facilities. For the services rendered to the Fund and the
facilities furnished, the Fund pays the Administrator a monthly fee equal to the
greater of (a) $125,000 per annum, or (b) an annual rate equal to .20% of the
Fund's average daily net assets up to $600 million and .175% of the Fund's
average daily net assets in excess of $600 million. The principal address of the
Administrator is P.O. Box 9011, Princeton, New Jersey 08543. The Administrator
is an affiliate of Merrill Lynch.
THE DISTRIBUTOR; RULE 12b-1 DISTRIBUTION PLANS
Pursuant to a Distribution Agreement between the Distributor and the Fund,
the Distributor serves as the principal underwriter of each Class of the Fund's
shares. Additionally, the Fund has adopted Distribution Plans pursuant to Rule
12b-1 under the Investment Company Act with respect to its Class B, Class C and
Class D shares, pursuant to which each such Class pays the Distributor certain
fees in connection with the distribution of shares of such Class and/or the
maintenance of shareholder accounts.
Under its Distribution Plan, each of Class B, Class C and Class D pays the
Distributor a Rule 12b-1 "account maintenance fee" equal on an annual basis to
.25% of the average daily net assets
11
<PAGE>
attributable to each such Class. This account maintenance fee is designed to
compensate the Distributor and certain broker-dealers and financial institutions
with which the Distributor has entered into selling arrangements for the
provision of certain services to the holders of Fund shares, including, but not
limited to, answering shareholder questions, providing shareholders with reports
and other information and providing various other services relating to the
maintenance of shareholder accounts.
The Distribution Plans of Class B and Class C provide for the additional
payment of a Rule 12b-1 "distribution fee" to the Distributor, equal on an
annual basis to .75% of the average daily net assets attributable to each such
Class. This fee is designed to compensate the Distributor for advertising,
marketing, and distributing the Class B and Class C shares, including the
provision of initial and ongoing sales compensation to the Distributor's sales
representatives and to other broker-dealers and financial institutions with
which the Distributor has entered into selling arrangements.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND CUSTODIAN; SUBACCOUNTING AGENTS
Investors Fiduciary Trust Company (the "Transfer Agent"), 1004 Baltimore,
Kansas City Missouri 64105, serves as the Fund's transfer agent and dividend
disbursing agent. Norwest Bank Minnesota, N.A., Norwest Center, 90 South Seventh
Street, Minneapolis, Minnesota 55402, serves as the Fund's custodian. In
addition, the Fund compensates certain broker-dealers that sell Fund shares for
performing various accounting and administrative services with respect to large
street-name accounts maintained by such broker-dealers.
HOW TO BUY FUND SHARES
ALTERNATIVE PURCHASE ARRANGEMENTS
The Fund offers investors the choice among three Classes of shares (Class B,
Class C and Class D) which offer different sales charges and bear different
expenses. (THE FUND'S CLASS A SHARES ARE OFFERED FOR SALE EXCLUSIVELY TO CERTAIN
SPECIFIED INVESTORS AND ARE NOT OFFERED FOR SALE TO THE PUBLIC GENERALLY.) These
alternatives permit an investor to choose the method of purchasing shares that
is most beneficial given the amount of the purchase, the length of time the
investor expects to hold the shares and other circumstances.
As more fully set forth below, a broker-dealer or financial institution may
receive different levels of compensation depending upon which Class of shares is
sold. In addition, the Distributor from time to time may pay certain additional
cash incentives of up to $100 and/or non cash incentives to its investment
executives and other broker-dealers and financial institutions in consideration
of their sales of Fund shares. In some instances, other incentives may be made
available only to selected broker-dealers and financial institutions, based on
objective standards developed by the Distributor, to the exclusion of other
broker-dealers and financial institutions. The Distributor in its discretion may
from time to time, pursuant to objective criteria established by it, pay fees to
qualifying brokers, dealers or financial intermediaries for certain services or
activities which are primarily intended to result in sales of Fund shares.
GENERAL PURCHASE INFORMATION
The minimum initial investment is $1,000, and the minimum additional
investment is $50. The Fund may waive or reduce these minimums for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. The Fund's shares may be purchased at their public
12
<PAGE>
offering price (see below) from the Distributor, from the Transfer Agent, from
other broker-dealers who are members of the NASD and who have selling agreements
with the Distributor, and from certain financial institutions that have selling
agreements with the Distributor.
When purchasing Fund shares, investors must specify which Class of shares is
being purchased. If no Class is specified, the order will be deemed an
investment in Class D shares. (However, for investors qualifying to purchase
Class A shares, the order will be deemed an investment in Class A shares.) No
share certificates will be issued by the Fund.
Banks, acting as agents for their customers and not for the Fund or the
Distributor, from time to time may purchase Fund shares for the accounts of such
customers. Generally, the Glass-Steagall Act prohibits banks from engaging in
the business of underwriting, selling or distributing securities. Should the
activities of any bank, acting as agent for its customers in connection with the
purchase of the Fund's shares, be deemed to violate the Glass-Steagall Act,
management will take whatever action, if any, is appropriate in order to provide
efficient services for the Fund. Fund management does not believe that a
termination in the relationship with any bank would result in any material
adverse consequences to the Fund. In addition, state securities laws on this
issue may differ and banks and financial institutions may be required to
register as dealers pursuant to state law. Fund shares are not deposits or
obligations of, or guaranteed or endorsed by, any bank and are not insured or
guaranteed by the U.S. Government, the FDIC, the Federal Reserve Board or any
other federal agency.
When orders are placed for shares of the Fund, the public offering price
used for the purchase will be the net asset value per share next determined,
plus the applicable sales charge, if any. If an order is placed with the
Distributor or other broker-dealer, the broker-dealer is responsible for
promptly transmitting the order to the Fund.
Shares of the Fund may be purchased by opening an account either by mail or
by phone. Shares are deemed to be purchased as of the time of determination of
the Fund's net asset value on the day the purchase order for the purchase of its
shares is received in good form and accepted by the Fund.
An investor who may be interested in having shares redeemed shortly after
purchase should consider making unconditional payment by certified check or
other means approved in advance by the Distributor. Payment of redemption
proceeds will be delayed as long as necessary to verify by expeditious means
that the purchase payment has been or will be collected. Such period of time
typically will not exceed 15 days.
AUTOMATIC INVESTMENT PLAN. Investors may make systematic investments in
fixed amounts automatically on a monthly basis through the Fund's Automatic
Investment Plan. Additional information is available from the Distributor.
PURCHASES BY MAIL. To open an account by mail, complete the general
authorization form attached to this Prospectus, and mail it, along with a check
payable to "The Jundt Growth Fund, Inc." to:
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
13
<PAGE>
PURCHASES BY TELEPHONE. To open an account by telephone, call (800)
370-0612 to obtain an account number and instructions. Information concerning
the account will be taken over the phone. The investor must then request a
commercial bank with which he or she has an account and which is a member of the
Federal Reserve System to transmit Federal Funds by wire to the Fund as follows:
State Street Bank & Trust Company ABA #011000028
For credit of: The Jundt Growth Fund, Inc.
Checking Account No.: 9905-154-2
Account Number: (assigned by telephone)
Information on how to transmit Federal Funds by wire is available at any
national bank or any state bank that is a member of the Federal Reserve System.
The bank may charge the shareholder for the wire transfer. The investor will be
required to complete the general authorization form attached to this Prospectus
and mail it to the Fund after making the initial telephone purchase.
CLASS A SHARES -- LIMITED PURCHASER CLASS
Class A shares are not generally available for sale to the public and are
offered for sale exclusively to: (a) directors, officers, employees and
consultants of the Fund (including partners and employees of outside legal
counsel to the Fund), the Investment Adviser and the Distributor, members of
their immediate families, and their lineal ancestors and descendants; (b)
shareholders of the Fund at the time of the Open-End Conversion, but only so
long as such shareholders remain Fund shareholders (a liquidation of the
shareholder's account will thereupon terminate such person's privilege to invest
in Class A shares); and (c) accounts for the benefit of any of the foregoing.
The public offering price of Class A shares of the Fund is their next
determined net asset value plus the applicable front-end sales charge ("FESC").
The Fund receives the net asset value. The FESC varies depending on the size of
the purchase and is allocated between the Distributor and other broker-dealers.
The current FESC schedule is as follows:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
-------------------------------
(AS A % OF DEALER REALLOWANCE
OFFERING (AS A % OF (AS A % OF
AMOUNT OF INVESTMENT PRICE) NET INVESTMENT) OFFERING PRICE)
- ------------------------------------------------------------- -------------- --------------- ------------------
<S> <C> <C> <C>
Less than $25,000............................................ 5.25% 5.54% 4.50%
$25,000 but less than $50,000................................ 4.75% 4.99% 4.25%
$50,000 but less than $100,000............................... 4.00% 4.17% 3.50%
$100,000 but less than $250,000.............................. 3.00% 3.09% 2.50%
$250,000 but less than $1,000,000............................ 2.00% 2.04% 1.75%
$1,000,000 and greater....................................... NONE* NONE* *
</TABLE>
- ------------------------
* On any sale of Class A shares to an investor in the amount of $1 million or
more, the Distributor will pay the dealer a commission equal to 1% of the
amount of that sale that is less than $2.5 million, .50% of the amount of
the sale that equals or exceeds $2.5 million but is less than $5 million and
.25% of the sale that equals or exceeds $5 million. Although such purchases
are not subject to a FESC, a contingent deferred sales charge of 1% will be
imposed at the time of redemption if redeemed within one year. See "How to
Redeem Fund Shares -- Contingent Deferred Sales Charge."
In connection with the distribution of the Fund's Class A shares, the
Distributor receives all applicable sales charges. The Distributor, in turn,
pays other broker-dealers selling such shares the
14
<PAGE>
"dealer reallowance" set forth above. In the event that shares are purchased by
a financial institution acting as agent for its customers, the Distributor or
the broker-dealer with whom such order was placed may pay all or part of its
dealer reallowance to such financial institution in accordance with agreements
between such parties.
SPECIAL PURCHASE PLANS -- REDUCED SALES CHARGES. Certain investors (or
groups of investors) may qualify for reductions in, or waivers of, the sales
charges shown above. Investors should contact their broker-dealer or the Fund
for details about the Combined Purchase Privilege, Cumulative Quantity Discount
and Letter of Intention plans. Descriptions are also included in the
authorization form and in the Statement of Additional Information. These special
purchase plans may be amended or eliminated at any time by the Distributor
without notice to existing Fund shareholders.
RULE 12b-1 FEES. Class A shares are not subject to any Rule 12b-1 account
maintenance or distribution fees.
WAIVER OF SALES CHARGES. Class A shares will be issued at net asset value,
and not subject to a FESC or contingent deferred sales charge ("CDSC"), if the
purchase of such shares by a qualifying investor is funded by the proceeds from
the redemption of shares of any unrelated open-end investment company that
charges a sales charge. In order to exercise this privilege, the purchase order
must be received by the Fund within 60 days after the redemption of shares of
the unrelated investment company. Class A shares also will be issued at their
net asset value, and not subject to a FESC or CDSC, to: (a) directors, officers,
employees and consultants of the Fund (including partners and employees of
outside legal counsel to the Fund), the Investment Adviser and the Distributor,
members of their immediate families, and their lineal ancestors and descendants;
and (b) accounts for the benefit of any of the foregoing. Investors that qualify
to purchase Class A shares and would qualify to purchase Class D shares at net
asset value, I.E., without the imposition of an FESC or CDSC, may also invest in
Class A shares at net asset value. See "Class D Shares -- Initial Sales Charge
Alternative -- Waiver of Sales Charges."
CLASS B SHARES -- CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE
The public offering price of Class B shares of the Fund is the net asset
value of the Fund's shares. Class B shares are sold without an initial sales
charge so that the Fund receives the full amount of the investor's purchase.
However, a CDSC of up to 4% will be imposed if shares are redeemed within six
years of purchase. For additional information, see "How to Redeem Fund Shares --
Contingent Deferred Sales Charge." In addition, Class B shares are subject to
higher Rule 12b-1 fees as described below. The CDSC will depend on the number of
years since the purchase was made, according to the following table, and will be
calculated on an amount equal to the lesser of the net asset value of the shares
at the time of purchase or their net asset value at the time of redemption.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES CHARGE
(AS A PERCENTAGE OF AMOUNT SUBJECT TO
REDEMPTION DURING CHARGE)
- ---------------------------------------------------------------------- -------------------------------------------
<S> <C>
1st Year Since Purchase............................................... 4%
2nd Year Since Purchase............................................... 4%
3rd Year Since Purchase............................................... 3%
4th Year Since Purchase............................................... 3%
5th Year Since Purchase............................................... 2%
6th Year Since Purchase............................................... 1%
Thereafter............................................................ None
</TABLE>
15
<PAGE>
Proceeds from the CDSC are paid to the Distributor and are used to defray
expenses of the Distributor related to providing distribution-related services
to the Fund in connection with the sale of Class B shares, such as the payment
of compensation to selected broker-dealers, and for selling Class B shares. The
combination of the CDSC and the Rule 12b-1 fee enable the Fund to sell the Class
B shares without deduction of a sales charge at the time of purchase. Although
Class B shares are sold without an initial sales charge, the Distributor pays a
sales commission equal to 4% of the amount invested to broker-dealers who sell
Class B shares and an annual fee of 0.25% of the amount invested that begins to
accrue one year after the shares are sold. Orders for Class B shares of $250,000
or more will be treated as orders for Class D shares (or Class A shares, if the
investor is eligible to purchase Class A shares) or declined.
RULE 12b-1 FEES. Class B shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class B shares and a Rule 12b-1 distribution
fee payable at an annual rate of .75% of the average daily net assets
attributable to Class B shares. The higher Rule 12b-1 fee will cause Class B
shares to have a higher expense ratio and to pay lower dividends than Class A or
Class D shares. For additional information about this fee, see "Management of
the Fund -- The Distributor; Rule 12b-1 Distribution Plans."
CONVERSION FEATURE. On the "designated conversion date" (the 15th day of
each month, or the next business day if the 15th day is not a business day)
following the eighth anniversary of their sale, Class B shares (including a pro
rata portion of the shares of the Fund received in connection with dividend and
distribution reinvestments) will automatically convert to Class D shares and
will no longer be subject to the higher Rule 12b-1 fees attributable to Class B
shares. Such conversion will be on the basis of the relative net asset values of
the two Classes. Class D shares issued upon such conversion will not be subject
to any FESC or CDSC. Class B shares acquired by exercise of the "reinstatement
privilege" will convert into Class D shares based on the time of the original
purchase of Class B shares. See "How to Redeem Fund Shares -- Reinstatement
Privilege." The conversion of Class B shares into Class D shares is subject to
the continuing availability of a ruling from the Internal Revenue Service that
payment of different dividends by each of the Classes of shares does not result
in the Fund's dividends or distributions constituting "preferential dividends"
under the Internal Revenue Code of 1986, as amended (the "Code"), and that such
conversions do not constitute taxable events for federal tax purposes. There can
be no assurance that such ruling will continue to be available, and the
conversion of Class B shares into Class D shares will not occur if such ruling
is not available at the time of conversion. In such event, Class B shares would
continue to be subject to higher expenses than Class D shares for an indefinite
period.
CLASS C SHARES -- LEVEL LOAD ALTERNATIVE
The public offering price of Class C shares of the Fund is the net asset
value of the Fund's shares. Class C shares are sold without an initial sales
charge so that the Fund receives the full amount of the investor's purchase.
However, a CDSC of 1% will be imposed if shares are redeemed within one year of
purchase. For additional information, see "How to Redeem Fund Shares --
Contingent Deferred Sales Charge." In addition, Class C shares are subject to
higher annual Rule 12b-1 fees as described below.
Proceeds from the CDSC are paid to the Distributor and are used to defray
expenses of the Distributor related to providing distribution-related services
to the Fund in connection with the sale of Class C shares, such as the payment
of compensation to selected broker-dealers, and for selling Class C shares. The
combination of the CDSC and the Rule 12b-1 fee enable the Fund to sell the
16
<PAGE>
Class C shares without deduction of a sales charge at the time of purchase.
Although Class C shares are sold without an initial sales charge, the
Distributor pays a sales commission equal to 1.00% of the amount invested to
broker-dealers who sell Class C shares at the time the shares are sold and an
annual fee of 1.00% of the amount invested that begins to accrue one year after
the shares are sold.
RULE 12b-1 FEES. Class C shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class C shares and a Rule 12b-1 distribution
fee payable at an annual rate of .75% of the average daily net assets
attributable to Class C shares. The higher Rule 12b-1 fee will cause Class C
shares to have a higher expense ratio and to pay lower dividends than Class A or
Class D shares. For additional information about this fee, see "Management of
the Fund -- Distributor; Rule 12b-1 Distribution Plans."
As between Class B and Class C shares, an investor that anticipates an
investment in the Fund of longer than six years (the CDSC period applicable to
Class B shares) would conclude that Class B shares are preferable to Class C
shares because the Class B shares will automatically convert to Class D shares
(to which lower Rule 12b-1 expenses apply) after eight years. However, an
investor with an anticipated investment time frame of less than six years (or
with an uncertain time frame) may choose Class C shares because of the larger
and longer-term CDSC applicable to Class B shares.
CLASS D SHARES -- INITIAL SALES CHARGE ALTERNATIVE
The public offering price of Class D shares of the Fund is their next
determined net asset value plus the applicable FESC. The Fund receives the net
asset value. The FESC varies depending on the size of the purchase and is
allocated between the Distributor and other broker-dealers. The current FESC
schedule is as follows:
<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
-------------------------------
(AS A % OF DEALER REALLOWANCE
OFFERING (AS A % OF (AS A % OF
AMOUNT OF INVESTMENT PRICE) NET INVESTMENT) OFFERING PRICE)
- ------------------------------------------------------------- -------------- --------------- ---------------------
<S> <C> <C> <C>
Less than $25,000............................................ 5.25% 5.54% 4.50%
$25,000 but less than $50,000................................ 4.75% 4.99% 4.25%
$50,000 but less than $100,000............................... 4.00% 4.17% 3.50%
$100,000 but less than $250,000.............................. 3.00% 3.09% 2.50%
$250,000 but less than $1,000,000............................ 2.00% 2.04% 1.75%
$1,000,000 and greater....................................... NONE* NONE* *
</TABLE>
- ------------------------
* On any sale of Class D shares to an investor in the amount of $1 million or
more, the Distributor will pay the dealer a commission equal to 1% of the
amount of that sale that is less than $2.5 million, .50% of the amount of
the sale that equals or exceeds $2.5 million but is less than $5 million and
.25% of the sale that equals or exceeds $5 million. Although such purchases
are not subject to a FESC, a CDSC of 1% will be imposed at the time of
redemption if redeemed within one year. See "How to Redeem Fund Shares --
Contingent Deferred Sales Charge."
In connection with the distribution of the Fund's Class D shares, the
Distributor receives all applicable sales charges. The Distributor, in turn,
pays other broker-dealers selling such shares the "dealer reallowance" set forth
above and an annual fee of 0.25% of the amount invested that begins to accrue
one year after the shares are sold. In the event that shares are purchased by a
financial
17
<PAGE>
institution acting as agent for its customers, the Distributor or the
broker-dealer with whom such order was placed may pay all or part of its dealer
reallowance to such financial institution in accordance with agreements between
such parties.
SPECIAL PURCHASE PLANS -- REDUCED SALES CHARGES. Certain investors (or
groups of investors) may qualify for reductions in, or waivers of, the sales
charges shown above. Investors should contact their broker-dealer or the Fund
for details about the Combined Purchase Privilege, Cumulative Quantity Discount
and Letter of Intention plans. Descriptions are also included in the
authorization form and in the Statement of Additional Information. These special
purchase plans may be amended or eliminated at any time by the Distributor
without notice to existing Fund shareholders.
RULE 12b-1 FEES. Class D shares are subject to a Rule 12b-1 account
maintenance fee payable at an annual rate of .25% of the average daily net
assets of the Fund attributable to Class D shares. For additional information
about this fee, see "Management of the Fund -- The Distributor; Rule 12b-1
Distribution Plans."
WAIVER OF SALES CHARGES. Class D shares will be issued at net asset value,
and not subject to a FESC or CDSC, if the purchase of such shares is funded by
the proceeds from the redemption of shares of any unrelated open-end investment
company that charges a sales charge. In order to exercise this privilege, the
purchase order must be received by the Fund within 60 days after the redemption
of shares of the unrelated investment company. Class D shares also will be
issued at their net asset value, and not subject to a FESC or CDSC, to the
following categories of investors:
- Investment executives and other employees of broker-dealers and financial
institutions that have entered into agreements with the Distributor for
the distribution of Fund shares, and parents and immediate family members
of such persons.
- Trust companies and bank trust departments for funds held in a fiduciary,
agency, advisory, custodial or similar capacity.
- States and their political subdivisions, and instrumentalities,
departments, authorities and agencies of states and their political
subdivisions.
- Registered investment advisers and their investment advisory clients.
- Employee benefit plans qualified under Section 401(a) of the Code (which
does not include Individual Retirement Accounts), and custodial accounts
under Section 403(b)(7) of the Code (also known as tax-sheltered
annuities).
HOW TO REDEEM FUND SHARES
The Fund will redeem its shares in cash at the net asset value per share
next determined after receipt of a shareholder's written request for redemption
in good order. If shares for which payment has been collected are redeemed,
payment will be made within three days. Shareholders that own more than one
Class of the Fund's shares should clearly specify the Class or Classes of shares
being redeemed.
The Fund imposes no charges (other than any applicable CDSC) when shares are
redeemed directly through the Transfer Agent. Service agents may charge a
nominal fee for effecting redemptions of Fund shares. It is the responsibility
of each service agent to transmit redemption orders to the
18
<PAGE>
Transfer Agent. Any certificates representing Fund shares being redeemed must be
submitted with the redemption request. The value of shares redeemed may be more
or less than their original cost depending upon the then-current net asset value
of the Class being redeemed.
The Fund may suspend this right of redemption and may postpone payment only
when the New York Stock Exchange is closed for other than customary weekends or
holidays, or if permitted by the rules of the SEC during periods when trading on
the New York Stock Exchange is restricted or during any emergency which makes it
impracticable for the Fund to dispose of its securities or to determine fairly
the value of its net assets, or during any other period permitted by order of
the SEC for the protection of investors.
Although the Fund has no current intention of doing so, the Fund reserves
the right to redeem its shares in kind. However, the Fund will pay in cash all
redemption requests by any shareholder that, during any 90-day period, amount to
no more than the lesser of: (a) $250,000; or (b) 1% of the Fund's net asset
value at the beginning of such 90-day period. If a redemption were made in kind,
a shareholder would incur transaction costs in disposing of any securities
received.
The Fund expects to redeem all of the shares of any shareholder whose
account has remained below $1,000 as a result of redemptions for at least 60
days after the mailing to the shareholder of a "notice of intention to redeem."
CONTINGENT DEFERRED SALES CHARGE
The CDSC will be calculated on an amount equal to the lesser of the net
asset value of the shares at the time of purchase or their net asset value at
the time of redemption. No CDSC will be imposed on any redeemed shares that have
been held for longer than the applicable CDSC period or to the extent the value
of any redeemed shares represents reinvestment of dividends or capital gains
distributions or capital appreciation of shares redeemed.
In determining whether a CDSC is applicable to any redemption, the
calculation will be determined in the manner that results in the lowest rate
being charged. Therefore, it will be assumed that a redemption of Class B shares
is made first of shares representing reinvestment of dividends and capital gains
distributions and then of remaining shares held by the shareholder for the
longest period of time. If a shareholder owns Class B and Class D shares, then
absent a shareholder choice to the contrary, Class B shares not subject to a
CDSC will be redeemed in full prior to any redemption of Class D shares not
subject to a CDSC.
The CDSC does not apply to: (a) redemption of shares when a Fund exercises
its right to liquidate accounts which are less than the minimum account size;
(b) redemptions in the event of the death or disability of the shareholder
within the meaning of Section 72(m)(7) of the Code; and (c) redemptions
representing a minimum required distribution from an individual retirement
account processed under a systematic withdrawal plan.
REINSTATEMENT PRIVILEGE
The Distributor, upon notification, intends to provide, out of its own
assets, a pro rata refund of any CDSC paid in connection with a redemption of
shares of the Fund (by crediting such refunded CDSC to such shareholder's
account) if, within 90 days of such redemption, all or any portion of the
redemption proceeds are reinvested in shares of the same Class of the Fund. Any
reinvestment within 90 days of a redemption with respect to which the CDSC was
paid will be made without the imposition
19
<PAGE>
of an FESC but will be subject to the same CDSC to which such amount was subject
prior to the redemption. The CDSC period will run from the original investment
date of the redeemed shares but will be extended by the number of days between
the redemption date and the reinvestment date.
EXCHANGE PRIVILEGE
Except as described below, shareholders may exchange some or all of their
Fund shares for shares of Jundt U.S. Emerging Growth Fund (a series of Jundt
Funds, Inc.), provided that the shares to be acquired in the exchange are
eligible for sale in the shareholder's state of residence. Class B shareholders
may exchange their shares for Class B shares of Jundt U.S. Emerging Growth Fund,
Class C shareholders may exchange their shares for Class C shares of Jundt U.S.
Emerging Growth Fund and Class A and Class D shareholders may exchange their
shares for Class D shares (or Class A shares, if the shareholder is eligible to
purchase Class A shares) of Jundt U.S. Emerging Growth Fund.
The minimum amount which may be exchanged is $1,000. The Fund and Jundt
Emerging Growth Fund will execute the exchange on the basis of the relative net
asset values next determined after receipt by the Fund. If a shareholder
exchanges shares of the Fund that are subject to a CDSC for shares of Jundt
Emerging Growth Fund, the transaction will not be subject to a CDSC. However,
when shares acquired through the exchange are redeemed, the shareholder will be
treated as if no exchange took place for the purpose of determining the CDSC.
There is no specific time limit on exchange frequency; however, the Fund is
intended for long term investment and not as a trading vehicle. The Investment
Adviser reserves the right to prohibit excessive exchanges (more than four per
quarter). The Distributor reserves the right, upon 60 days' prior notice, to
restrict the frequency of, or otherwise modify, condition, terminate or impose
charges upon, exchanges. An exchange is considered a sale of shares on which the
investor may realize a capital gain or loss for income tax purposes. A
shareholder may place exchange requests directly with the Fund, through the
Distributor or through other broker-dealers. An investor considering an exchange
should obtain a prospectus of Jundt Emerging Growth Fund and should read such
prospectus carefully. Contact the Fund, the Distributor or any of such other
broker-dealers for further information about the exchange privilege.
EXPEDITED REDEMPTIONS
The Fund offers several expedited redemption procedures, described below,
which allow a shareholder to redeem Fund shares at net asset value determined on
the same day that the shareholder placed the request for redemption of those
shares. Pursuant to these expedited redemption procedures, the Fund's shares
will be redeemed at their net asset value next determined following the Fund's
receipt of the redemption request. The Fund reserves the right at any time to
suspend or terminate the expedited redemption procedures or to impose a fee for
this service. There is currently no additional charge to the shareholder for use
of the Fund's expedited redemption procedures.
EXPEDITED TELEPHONE REDEMPTION. Shareholders redeeming at least $1,000 and
no more than $25,000 of shares (which are not then represented by share
certificates) may redeem by telephoning the Fund directly at (800) 370-0612. The
applicable section of the authorization form must have been completed by the
shareholder and filed with the Fund before the telephone request is received.
The Fund will employ reasonable procedures to confirm that telephone
instructions are genuine, including requiring that payment be made only to the
shareholder's address of record or to the bank account designated on the
authorization form and requiring certain means of telephonic identification. If
the Fund fails to employ such procedures, it may be liable for any losses
suffered by shareholders as a
20
<PAGE>
result of fraudulent instructions. The proceeds of the redemption will be paid
by check mailed to the shareholder's address of record or, if requested at the
time of redemption, by wire to the bank designated on the authorization form.
EXPEDITED REDEMPTIONS THROUGH CERTAIN BROKER-DEALERS. Certain
broker-dealers who have sales agreements with the Distributor may allow their
customers to effect an expedited redemption of shares of the Fund purchased
through such a broker-dealer by notifying the broker-dealer of the amount of
shares to be redeemed. The broker-dealer is then responsible for promptly
placing the redemption request with the Fund on the customer's behalf. Payment
will be made to the shareholder by check or wire sent to the broker-dealer.
Broker-dealers offering this service may impose a fee or additional requirements
for such redemptions.
MONTHLY CASH WITHDRAWAL PLAN
An investor who owns or buys shares of the Fund valued at $10,000 or more at
the current offering price may open a Withdrawal Plan and have a designated sum
of money paid monthly to the investor or another person. The applicable CDSC may
apply to monthly redemptions of Class B or Class C shares. See "Monthly Cash
Withdrawal Plan" in the Statement of Additional Information.
DETERMINATION OF NET ASSET VALUE
The net asset value of each Class of the Fund's shares is determined once
daily as of 15 minutes after the close of business on the New York Stock
Exchange (generally 4:00 p.m., New York time) on each day during which the New
York Stock Exchange is open for trading. Any assets or liabilities initially
expressed in terms of non-U.S. dollar currencies are translated into U.S.
dollars at the prevailing market rates as quoted by one or more banks or dealers
on the day of valuation. The net asset value is computed by dividing the market
value of the securities held by the Fund plus any cash or other assets
(including interest and dividends accrued but not yet received) minus all
liabilities (including accrued expenses) by the total number of shares
outstanding at such time. Expenses, including but not limited to the fees paid
to the Investment Adviser and the Administrator and any account maintenance
and/or distribution fees payable to the Distributor, are accrued daily.
Portfolio securities which are traded on a national securities exchange or
on the NASDAQ National Market System are valued at the last sale price on such
exchange or market as of the close of business on the date of valuation.
Securities traded on a national securities exchange or on the NASDAQ National
Market System for which there were no sales on the date of valuation and
securities traded on other over-the-counter markets, including listed securities
for which the primary market is believed to be over-the-counter, are valued at
the mean between the most recently quoted bid and asked prices. Options are
valued at market value or fair value if no market exists. Futures contracts are
valued in a like manner, except that open futures contract sales are valued
using the closing settlement price or, in the absence of such a price, the most
recent quoted asked price. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by
the Fund's Board of Directors or by the Investment Adviser in accordance with
policies and procedures established by the Board of Directors. Short-term
investments that mature in 60 days or less are valued at amortized cost, which
approximates fair value.
21
<PAGE>
DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
Substantially all of the Fund's net realized gains and net investment
income, if any, will be paid to shareholders annually. Dividends and
distributions may be taken in cash or automatically reinvested in additional
Fund shares (of the same Class of shares as the shares to which the dividends or
distributions relate) at net asset value on the ex-dividend date. Dividends and
distributions will be automatically reinvested in additional Fund shares unless
the shareholder has elected in writing to receive dividends and distributions in
cash.
TAXES
The Fund historically has qualified, and intends to continue to qualify, as
a "regulated investment company" under Subchapter M of the Code. If so
qualified, the Fund will not be subject to federal income taxes to the extent
its earnings are timely distributed. The Fund also intends to make distributions
as required by the Code to avoid the imposition of the 4% federal excise taxes.
The Fund will distribute substantially all of its net investment income and
net capital gains to investors. Distributions to shareholders from the Fund's
income and short-term capital gains are taxed as dividends (as ordinary income),
and long-term capital gain distributions are taxed as long-term capital gains.
Distributions of long-term capital gains will be taxable to the investor as
long-term capital gains regardless of the length of time the shares have been
held. A portion of the Fund's dividends may qualify for the dividends received
deduction for corporations. The Fund's distributions are taxable when they are
paid, whether a shareholder takes them in cash or reinvests them in additional
Fund shares, except that dividends and distributions declared in December but
paid in January are taxable as if paid on or before December 31. The federal
income tax status of all distributions will be reported to shareholders
annually. In addition to federal income taxes, dividends and distributions may
also be subject to state or local taxes, and if the shareholder lives outside
the United States, the dividends and distributions could also be taxed by the
country in which the shareholder resides.
"BUYING A DIVIDEND"
On the ex-dividend date for a dividend or distribution by the Fund, its
share price is reduced by the amount of the dividend or distribution. If an
investor purchases shares of the Fund on or before the record date ("buying a
dividend"), the investor will pay the full price for the shares (which includes
realized but undistributed earnings and capital gains of the Fund that
accumulate throughout the year), and then receive a portion of the purchase
price back in the form of a taxable distribution.
OTHER TAX INFORMATION
Under federal tax law, some shareholders may be subject to a 31% withholding
on reportable dividends, capital gains distributions and redemption payments
("backup withholding"). Generally, shareholders subject to backup withholding
will be those for whom a taxpayer identification number is not on file with the
Fund or any of its agents or who, to the Fund's or agent's knowledge, have
furnished an incorrect number. In order to avoid this withholding requirement,
investors must certify that the taxpayer identification number provided is
correct and that the investment is not otherwise subject to backup withholding,
or is exempt from backup withholding.
22
<PAGE>
THE FOREGOING TAX DISCUSSION IS GENERAL IN NATURE, AND EACH INVESTOR IS
ADVISED TO CONSULT HIS OR HER TAX ADVISER REGARDING SPECIFIC QUESTIONS AS TO
FEDERAL, STATE, LOCAL OR FOREIGN TAXATION.
PERFORMANCE INFORMATION
Advertisements and communications to shareholders may contain various
measures of the Fund's performance, including various expressions of total
return. Additionally, such advertisements and communications may occasionally
cite statistics to reflect the Fund's volatility or risk. Performance for each
Class of the Fund's shares may be calculated on the basis of average annual
total return and/or total return. These total return figures reflect changes in
the price of the shares and assume that any income dividends and/or capital
gains distributions made by the Fund during the measuring period were reinvested
in shares of the same Class. The Fund presents performance information for Class
A shares commencing with the Fund's inception and for Class B, Class C and Class
D shares commencing with the Open-End Conversion. Performance information for
Class A shares for the period prior to the Open-End Conversion reflects the
performance of the Fund as a closed-end fund. As an open-end fund, the Fund
incurs certain additional expenses as a result of the continuous offering and
redemption of its shares. Class A and Class D average annual total return
figures reflect the maximum initial FESC (but do not reflect the imposition of
any CDSC upon redemption), and Class B and Class C average annual total return
figures reflect any applicable CDSC. Performance for each Class is calculated
separately.
Average annual total return is calculated pursuant to a standardized formula
which assumes that an investment was purchased with an initial payment of $1,000
and that the investment was redeemed at the end of a stated period of time,
after giving effect to the reinvestment of dividends and distributions during
the period. The return is expressed as a percentage rate which, if applied on a
compounded annual basis, would result in the redeemable value of the investment
at the end of the period. Advertisements of the performance of the Fund's Class
A shares will cover one and, when available, five and ten-year periods, as well
as the time period since the inception of the Fund. Advertisements of the
performance of the Fund's Class B, Class C and Class D shares will cover the
time period since the Open-End Conversion and, when available, one, five and
ten-year periods.
Total return is computed on a per share basis and assumes the reinvestment
of dividends and distributions. Total return generally is expressed as a
percentage rate which is calculated by combining the income and principal
changes for a specified period and dividing by the maximum offering price per
share (in the case of Class A or Class D shares) or the net asset value per
share (in the case of Class B or Class C shares) at the beginning of the period.
Advertisements may include the percentage rate of total return or may include
the value of a hypothetical investment at the end of the period which assumes
the application of the percentage rate of total return. Total return also may be
calculated by using the net asset value per share at the beginning of the period
instead of the maximum offering price per share at the beginning of the period
for Class A or Class D shares, or without giving effect to any applicable CDSC
at the end of the period for Class B or Class C shares. Calculations based on
the net asset value per share do not reflect the deduction of the applicable
front-end or contingent deferred sales charge which, if reflected, would reduce
the performance quoted.
In each case performance figures are based upon past performance. The
investment results of the Fund, like all others, will fluctuate over time; thus,
performance figures should not be considered to represent what an investment may
earn in the future or what the Fund's total return or average annual total
return may be in any period.
23
<PAGE>
The Fund's performance from time to time in reports or promotional
literature may be compared to generally accepted indices or analyses such as
those published by Lipper Analytical Service, Inc., Standard & Poor's
Corporation, Dow Jones & Company, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc. and Investment Company Data Incorporated. Performance ratings
reported periodically in national financial publications also may be used.
The Fund's Annual Reports will contain certain performance information
regarding the Fund and will be made available to any recipient of this
Prospectus upon request and without charge.
GENERAL INFORMATION
The Fund was incorporated under the laws of the State of Minnesota on May
20, 1991 and is registered with the SEC under the Investment Company Act as an
open-end management investment company. This registration does not involve
supervision of management or investment policy by an agency of the federal
government. The Fund initially was registered with the SEC as a closed-end
management investment company but converted into an open-end management
investment company immediately following the close of business on the New York
Stock Exchange on December 28, 1995.
The Fund is authorized to issue up to 10 billion shares of its common stock,
par value $.01 per share. Currently, the Fund's shares are classified in four
Classes (Class A, Class B, Class C and Class D) with 1 billion of the Fund's
authorized shares allocated to each Class. The Fund's Board of Directors,
without shareholder approval, is authorized to designate additional Classes of
shares in the future (subject only to the Fund's overall authorized number of
shares that have not been previously designated); however, the Board has no
present intention to do so. Each Fund share has one vote, and shareholders will
vote in the aggregate and not by Class except as otherwise required by law.
Therefore, all Fund shares, irrespective of Class designation, have equal voting
rights regarding the election of Fund directors, the ratification of the Fund's
independent auditors and the approval of amendments to the Fund's Investment
Advisory Agreement. In accordance with rules and regulations under the
Investment Company Act, however, only shares of a given Class have the right to
vote on amendments to the Rule 12b-1 Distribution Plan applicable to such Class.
Additionally, because Class B shares (if held for the applicable time period)
automatically convert into Class D shares, any proposed amendment to the Class D
Distribution Plan that would increase the fees payable thereunder must be
approved by Class D AND Class B shareholders (each voting separately as a
Class).
The Fund is not required under Minnesota law to hold annual or periodically
scheduled regular meetings of shareholders, and does not intend to hold such
meetings. The Board of Directors may convene shareholder meetings when it deems
appropriate and is required under Minnesota law to schedule regular or special
meetings in certain circumstances. Additionally, under Section 16(c) of the
Investment Company Act, the Fund's Board of Directors must promptly call a
meeting of shareholders for the purpose of voting upon the question of removal
of any director when requested in writing to do so by the record holders of not
less than ten percent of the Fund's outstanding shares.
Under Minnesota law, the Fund's Board of Directors has overall
responsibility for managing the Fund in good faith, in a manner reasonably
believed to be in the Fund's best interests, and with the care an ordinarily
prudent person in a like position would exercise in similar circumstances. The
Fund's Articles of Incorporation limit the liability of the Fund's officers and
directors to the fullest extent permitted by law.
24
<PAGE>
The Fund and the Investment Adviser have adopted a Code of Ethics that has
been filed with the SEC as an exhibit to the Fund's Registration Statement (of
which this Prospectus is a part). The Code of Ethics does not permit any
director, officer or employee of the Fund, the Investment Adviser or the
Distributor, other than the Fund's directors and officers who are not interested
persons of the Fund, the Investment Adviser or the Distributor (collectively,
the "Disinterested Directors and Officers"), to purchase any security in which
the Fund is permitted to invest. If such person owns a security in which,
following its purchase by such person, the Fund becomes permitted to invest, the
person would not be permitted to acquire any additional interest in such
security and must observe strict limitations in connection with any disposition
of such security. Disinterested Directors and Officers are permitted to purchase
and sell securities in which the Fund may invest, but may not effect any
purchase or sale at any time during which the Fund has a pending buy or sell
order for the same security. Information about how the Code of Ethics can be
inspected or copied at the SEC's public reference rooms or obtained at the SEC's
headquarters is available through the SEC's toll-free telephone number, (800)
SEC-0330.
For a further discussion of the above matters, see "General Information" in
the Statement of Additional Information.
25
<PAGE>
THE JUNDT GROWTH FUND, INC. GENERAL AUTHORIZATION FORM
I wish to establish or revise my account in the Fund in accordance with these
instructions, the terms and conditions of this form and the current Prospectus
of the Fund, a copy of which I have received.
<TABLE>
<S> <C>
INSTRUCTIONS: 1) Please complete Sections A through J, as applicable. Be sure to sign the
certifications in Section J.
2) Please send this completed form and your check payable to the Fund to:
THE JUNDT GROWTH FUND, INC., C/O NATIONAL FINANCIAL DATA SERVICES, P.O. BOX 419168,
KANSAS CITY, MO 64141-6168
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
A. ACCOUNT
REGISTRATION / / Individual ---------------------------------------------------------------------------------
First Name Middle Last Name Social Security #
1. NAME / / Joint Investor* ----------------------------------------------------------------------------
First Name Middle Last Name Social Security #
*The account will be registered "Joint tenants with rights of survivorship" unless otherwise
specified.
/ / Trust Account -----------------------------------------------------------------------------
Name of Trust Tax Identification #
----------------------------------------------------------------------------------------------
Date of Trust Trustee(s)
/ / Corporation, Partnership or Other Entity ----------------------------------------------------
Type of Entity Tax Identification #
----------------------------------------------------------------------------------------------
Name of Entity
</TABLE>
<TABLE>
<S> <C> <C>
/ / Transfer/Gift to Minors
-------------------------------------------------------------------------------------
Custodian's Name (one name only) Minor's State of Residence
-------------------------------------------------------------------------------------
Minor's Name Minor's Social Security #
/ / Transfer on death to: ----------------------------------------------------------------------
Tax Identification #
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
2. ADDRESS ( )
------------------------------------------------- ---------------------------------------------------------
Address/Apt.
No. Area Code Business Telephone
( )
------------------------------------------------- ---------------------------------------------------------
City State Zip Code Area Code Home Telephone
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
B. INITIAL The minimum initial investment is $1,000. Class A and Class D shares (except for
INVESTMENT investments of $1 million or more) are subject to a front-end sales charge at the
time of purchase. Class B and Class C shares may be subject to a contingent deferred
sales charge at the time of redemption. If a Class is not selected, the purchase will
be made in Class D shares (Class A shares for investors qualified to purchase Class A
shares). Orders for Class B shares of $250,000 or more will be treated as orders for
Class D shares (Class A shares for investors qualified to purchase Class A shares).
</TABLE>
$
----------------------------------------------------
Class A Shares
$
----------------------------------------------------
Class B Shares
$
----------------------------------------------------
Class C Shares
$
----------------------------------------------------
Class D Shares
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
C. DEALER
INFORMATION ----------------------------------------------------------------------------------------------------
Name of Broker-Dealer Name of Representative Representative's Phone #
----------------------------------------------------------------------------------------------------
Branch Office Address Branch ID # Representative's ID #
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
D. DIVIDEND NOTE: IF NO ELECTION IS MADE, DIVIDENDS AND CAPITAL GAIN WILL AUTOMATICALLY BE REINVESTED.
DISTRIBUTIONS
/ / Reinvested in additional shares or / / receive dividends in cash*
*For "receive in cash", please choose a delivery option:
/ / Deposit directly into my bank account. ATTACHED IS A VOIDED CHECK, PHOTOCOPY OF A CHECK, OR A
SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT WHERE I WOULD LIKE YOU TO DEPOSIT THE DIVIDEND.
/ / Savings / / Checking
/ / Mail check to my address listed in Section A.
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
E. AUTOMATIC / / Please arrange with my bank to invest $ ($100 minimum) per month in the Fund.
INVESTMENT Please charge my bank account on the 5th day (or next business day) of each month. ATTACHED IS A
PLAN VOIDED CHECK, PHOTOCOPY OF A CHECK, OR A SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT ON WHICH THE
INVESTMENT IS GOING TO BE DRAWN.
/ / Savings / / Checking
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
F. LETTER OF / / I elect to take advantage of the Letter of Intention and agree to the escrow provisions herein
INTENTION and certify that I am entitled to reduced rates in accordance with the provisions herein. My initial
(CLASS A AND investment will be at least 5% of the Letter of Intention amount. I intend to purchase, although
D ONLY) I am not obligated to do so, Fund shares within a 13-month period, an aggregate amount of which
will be at least:
/ / $25,000 / / $50,000 / / $100,000 / / $1,000,000
/ / This is a new Letter of Intention.
/ / This is a retroactive 90-day Letter, requiring adjustment of prior purchase(s).
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
G. COMBINED / / I elect to take advantage of the Combined Purchase Privilege. Below is a list of accounts of qualifying
PURCHASE individuals, organizations or other persons (see "Special Purchase Plans -- Combined Purchase Privilege" in the
PRIVILEGE Statement of Additional information) with which I wish to combine my purchase for reduced sales charge purposes.
(CLASS A AND
D ONLY)
1. 2.
-------------------------------------------------- --------------------------------------------------
Account Number Fund Name Account Number Fund Name
-------------------------------------------------- --------------------------------------------------
Owner(s) Name Owner(s) Name
-------------------------------------------------- --------------------------------------------------
Relationship Relationship
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
H. TELEPHONE / / I hereby authorize the Fund's transfer agent (the "Transfer Agent") to honor any telephone
REDEMPTION instructions from any of the registered shareholders or the registered representative of the
PRIVILEGE above account for redemptions of at least $1,000 and no more than $25,000. Redemptions greater
than $25,000 must be in writing and signature guaranteed. The Transfer Agent and the Fund will
employ reasonable procedures to confirm that telephone instructions are genuine, including
requiring that payment be made only to the address registered on the account or to the bank
account designated below and requiring certain means of telephone identification. If the
Transfer Agent and the Fund fail to employ such procedures, they may be liable for any losses
suffered as a result of unauthorized or fraudulent instructions. Provided the Transfer Agent and
the Fund employ such procedures, I will indemnify and hold harmless the Transfer Agent, the
Distributor, and the Fund from and against all losses, claims, expenses and liabilities that may
arise out of, or be in any way connected with a redemption of shares under this expedited
redemption procedure. Proceeds will be mailed as registered on the account or wired to the bank
account designated below.
/ / Savings / / Checking
ATTACHED IS A VOIDED CHECK, PHOTOCOPY OF A CHECK, OR A SAVINGS DEPOSIT FORM SHOWING THE BANK ACCOUNT
TO WHICH PROCEEDS OF $1,000 OR MORE MAY BE WIRED IF REQUESTED.
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
I. MONTHLY / / Please send a check for $ on the 20th day (or preceding business day) of each month (minimum
WITHDRAWAL $100). This service is available only for accounts with balances of $10,000. A contingent
deferred sales charge may apply to redemptions of shares. Refer to "How to Redeem Fund Shares"
in the Prospectus.
</TABLE>
2
<PAGE>
________________________________________________________________________________
J. SIGNATURE
AND
CERTIFICATION
Substitute Form W-9 THE JUNDT GROWTH FUND, INC.
<TABLE>
<S> <C> <C>
SIGNATURE CARD AND ----------------------------------------
TAXPAYER IDENTIFICATION NUMBER Account Number (to be completed by the
CERTIFICATION Fund)
</TABLE>
________________________________________________________________________________
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PART I
------------------------------------
Social Security Number
--------------------------------------------------
Name PLEASE PRINT
---------------------------------------------
REQUIRED --> or
---------------------------------------------
Tax Identification Number
---------------------------------------------
NOTE: If the account is in more than one name, give the
actual owner of the account or the first name
listed on the account and their tax identification
number.
</TABLE>
________________________________________________________________________________
<TABLE>
<S> <C>
PART II Are you an organization that meets the Internal Revenue Service ("IRS") definition of an exempt payee
(I.E., corporations, the United States and its agencies, a state, etc., qualify as exempt but
individuals DO NOT qualify as exempt)?
Yes / / No / /
</TABLE>
________________________________________________________________________________
CERTIFICATION: Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification number;
and
(2) I am not subject to backup withholding either because I have not been
notified by the IRS that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or the IRS has notified me that
I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS: You must cross out item (2) above if you have been
notified by IRS that you are currently subject to backup withholding because of
underreporting interest or dividends on your tax return.
I hereby certify that I have received a current prospectus, agree to be bound by
its terms, and that I am empowered and duly authorized to execute and carry out
the terms of this General Authorization Form and to purchase and hold the shares
subscribed for thereby, and further certify that this General Authorization Form
has been duly and validly executed on behalf of the person or entity listed
above and constitutes a legal and binding obligation of such person or entity.
I hereby acknowledge that it is my obligation to notify my investment
representative (at the time of investment) about my eligibility for any of the
special purchase plans detailed in the Prospectus. Absent such notification,
none of such plans will automatically be applied to any investment in Fund
shares, and I have waived my eligibility for all applicable plans.
________________________________________________________________________________
PLEASE
REQUIRED
SIGN HERE
Signature--> Date-->
________________________________________________________________________________
JOINT
Signature--> Date-->
________________________________________
INVESTORS
PLEASE
SIGN HERE
Signature--> Date-->
________________________________________________________________________________
The signature card is provided as a convenience to shareholders allowing
shareholders to submit written requests for redemption without signature
guarantee. (NOTE: For written redemption requests asking for proceeds to be
mailed to other than the shareholder(s) or address of record a signature
guarantee MUST be obtained. Signature guarantees are also required on
redemptions over $50,000.)
Please be sure to have all joint shareholders sign this card.
________________________________________________________________________________
NOTE: THIS SIGNED PAGE MUST ACCOMPANY THE PREVIOUS PAGE OF GENERAL AUTHORIZATION
FORM
3
<PAGE>
LETTER OF INTENTION AND TERMS OF ESCROW
(CLASS A AND D SHARES ONLY)
If you estimate that during the next 13 months you will make a series of
purchases totaling an amount which qualifies for a reduced sales charge, you may
elect to take advantage of a Letter of Intention. The total investment must
equal at least $25,000 in any class of Fund shares. The Letter of Intention does
not obligate you to make purchases totaling a given amount, nor is the Fund
making a binding commitment to sell you the full amount of the shares indicated.
As soon as the Fund is informed that you have chosen to invest with a Letter of
Intention, each purchase can receive the appropriate (lower) sales charge. You
or your dealer must inform us EACH TIME that a purchase is made under a Letter
of Intention. (Automatic Investment Plans are not allowed for Letter of
Intention purchasers.) Your first purchase must be at least 5% of the Letter of
Intention amount.
For example, if you choose a Letter of Intention at the $100,000 level, you are
telling the Fund that you expect your purchases over the next 13 months to total
at least $100,000. Your first purchase must be at least $5,000. Whenever you
make another purchase and tell the Fund you have a Letter of Intention for
$100,000, you will be able to buy shares at the public offering price associated
with a single purchase of $100,000.
Reduced rates on large transactions are limited to the following: an individual
or a "company" as defined in Section 2(a)(8) of the Investment Company Act of
1940; an individual, his or her spouse and their children under the age of 21
purchasing securities for their own account; a trustee or other fiduciary
purchasing securities for a single trust estate or single fiduciary account
(including a pension, profit sharing or other employee benefit trust created
pursuant to a plan qualified under Section 401 of the Internal Revenue Code);
tax-exempt organizations enumerated in Section 501(c)(3) of the Internal Revenue
Code; and any organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying redeemable
securities of a registered investment company, and provided that the purchase is
made through a central administration, or through a single dealer, or by other
means which result in economy of sales effort or expense. Such rates are not
allowable to a group of individuals whose funds are combined, directly or
indirectly, for the purchase of securities or to the agent, custodian or other
representative of such group.
Out of your initial purchase or purchases, 5% of the dollar amount specified in
the Letter of Intention shall be held in escrow by the Fund in the form of
shares computed at the applicable public offering price. For example, if the
amount of this Letter of Intention is $100,000 and the offering price (at the
time of the initial transaction) is $10 a share, 500 shares ($5,000 worth) would
be held in escrow. All shares purchased, including those escrowed, will be
registered in your name and recorded in the same account, which will be credited
fully with all income dividends and capital gain distributions declared. If the
total purchases equal or exceed the amount specified by you as your expected
aggregate purchases, the escrowed shares will be delivered to you or credited to
your account. If total purchases are less than the amount specified, you will
remit to the Fund an amount equal to the difference between the dollar amount of
sales charges actually paid and the amount of sales charges you would have paid
on your aggregate purchases if the total of such purchases had been made at a
single time. Neither dividends from investment income nor capital gain
distributions taken in shares will apply toward the completion of this Letter of
Intention. The contingent deferred sales charge (and not the front-end sales
charge) will apply to Letters of Intention for $1,000,000 or more. See "How to
Redeem Fund Shares -- Contingent Deferred Sales Charge" in the Prospectus.
However, if total purchases pursuant to such Letter of Intention are less than
$1,000,000 after a period of 13 months from the date of the first credited
investment, you will remit to the Fund an amount equal to the front-end sales
charge that would have applied if the actual aggregate amount invested were
invested at one time, less any contingent deferred sales charge paid on any
investment pursuant to such Letter of Intention redeemed during such period. The
Fund will prepare and mail a statement to you and your dealer or representative,
who shall be responsible for notifying you of the difference due and for
determining from you whether you prefer to pay it in cash or have it liquidated
from the escrowed shares. If the Fund has not received a check within 21 days of
notification, it will be assumed that the preferred method is liquidation. The
Fund will redeem a number of escrowed shares sufficient to realize the
difference and release or deliver the remainder.
The Fund is hereby irrevocably appointed your attorney to surrender for
redemption any or all escrowed shares under the conditions outlined above.
4
<PAGE>
INVESTOR'S CHECKLIST
QUESTIONS: CALL THE FUND AT (800) 370-0612
PURCHASE SHARES
BY MAIL: Send completed application, together with your check payable to the
Fund at:
The Jundt Growth Fund, Inc.
c/o National Financial Data Services
P.O. Box 419168
Kansas City, MO 64141-6168
BY WIRE/TELEPHONE: Call your investment dealer/advisor or the Fund at (800)
370-0612. The Fund will assign a new account number to you.
Then instruct your commercial bank to wire transfer "Federal
Funds" via the Federal Reserve System to:
State Street Bank & Trust Company ABA #011000028
For Credit of: The Jundt Growth Fund, Inc.
Checking Account No.: 9905-154-2
Account Number: (assigned by telephone)
SIGNATURES
All shareholders must sign the General Authorization Form exactly as their
names appear on the account form. Be sure all joint tenants sign. Only the
custodian for a minor must sign. Fiduciaries and officers of the corporations or
other organizations should indicate their capacity or title.
NOTE: See "How to Buy Fund Shares" in the Prospectus for order effectiveness and
further information.
5
<PAGE>
THE JUNDT GROWTH FUND, INC.
ELIGIBILITY CERTIFICATION STATEMENT
This Eligibility Certification Statement must accompany your General
Authorization Form when you establish your account in order to qualify your
account: (1) to purchase Class A shares; and/ or (2) to purchase Class A shares
or Class D shares at net asset value; I.E. without the imposition of any sales
charges.
Name: ___________________________________________________________________
1. ELIGIBILITY TO PURCHASE CLASS A SHARES
The above-named purchaser is eligible to purchase Class A shares
of The Jundt Growth Fund, Inc. (the "Fund") because it falls into the following
category of investors:
(CHECK ALL BOXES THAT APPLY)
/ / Shareholder of the Fund on December 28, 1995 who has
continuously held Fund shares since that date. Please give details, including
name in which shares were held, and name and telephone number of any broker who
held such shares.
_______________________________________________________________________________
_______________________________________________________________________________
/ / Director, officer, employee or consultant of the Fund
(including partners and employees of outside legal counsel to the Fund), Jundt
Associates, Inc. or U.S. Growth Investments, Inc. or a member of the immediate
family, or a lineal ancestor or descendant, of any such person. Please give
details, including name of person and company or firm: _________________________
_______________________________________________________________________________
/ / Account for the benefit of any of the foregoing. Please
explain: _______________________________________________________________________
_______________________________________________________________________________
I hereby certify that the enclosed investment represents a purchase of
Fund shares for myself or a beneficial account. I also certify that, as
described in the Fund's current prospectus, I am eligible to purchase Class A
shares, and I will notify the Fund in the event I cease to be so eligible.
Signature: ______________________________
Date: _______________________________
2. ELIGIBILITY TO PURCHASE CLASS A SHARES OR CLASS D SHARES AT NET
ASSET VALUE
The above-named purchaser is eligible to purchase Class A shares
or Class D shares of the Fund at net asset value because it falls into the
following category of investors:
<PAGE>
(CHECK ALL BOXES THAT APPLY)
/ / Director, officer, employee or consultant of the Fund
(including partners and employees of outside legal counsel to the Fund), Jundt
Associates, Inc. or U.S. Growth Investments, Inc. or a member of the immediate
family, or a lineal ancestor or descendant, of any such person. Please give
details, including name of person and company or firm: _________________________
_______________________________________________________________________________
/ / Account for the benefit of any of the foregoing. Please
explain: _______________________________________________________________________
_______________________________________________________________________________
/ / Investment executive or other employee of a broker-dealer
or financial institution that has entered into an agreement with U.S. Growth
Investments, Inc. for the distribution of Fund shares or a parent or immediate
family member of any such person.
Please give details, including name of person and
broker-dealer or financial institution:
_______________________________________________________________________________
_______________________________________________________________________________
/ / Trust company or bank trust department for funds held in
a fiduciary, agency, advisory, custodial or similar capacity.
/ / States and their political subdivisions or
instrumentalities, departments, authorities and agencies thereof.
/ / Registered investment advisers or their investment
advisory clients.
/ / Section 401(a) employee benefit plans.
/ / Section 403(b)(7) custodial accounts.
I hereby certify that the enclosed investment represents a purchase of
Fund shares for myself or a beneficial account. I also certify that, as
described in the Fund's current prospectus, I am eligible to purchase Class A
shares or Class D shares, as applicable, at net asset value, and I will notify
the Fund in the event I become no longer eligible for net asset value purchases.
I understand that any intention abuse of the net asset value purchase
privilege may result in the application of retroactive sales charges or other
penalties in the discretion of U.S. Growth Investments, Inc.
Signature: ______________________________
Date: _______________________________
- 2 -
<PAGE>
APPENDIX A
GENERAL CHARACTERISTICS AND RISKS OF FUTURES AND OPTIONS
STOCK INDEX FUTURES, OPTIONS ON STOCK INDICES AND OPTIONS ON STOCK INDEX FUTURES
CONTRACTS
The Fund may purchase and sell stock index futures, options on stock indices
and options on stock index futures contracts as a hedge against movements in the
equity markets.
A stock index futures contract is an agreement in which one party agrees to
deliver to the other an amount of cash equal to a specific dollar amount times
the difference between the value of a specific stock index at the close of the
last trading day of the contract and the price at which the agreement is made.
No physical delivery of securities is made.
Options on stock indices are similar to options on specific securities,
described below, except that, rather than the right to take or make delivery of
the specific security at a specific price, an option on a stock index gives the
holder the right to receive, upon exercise of the option, an amount of cash if
the closing level of that stock index is greater than, in the case of a call
option, or less than, in the case of a put option, the exercise price of the
option. This amount of cash is equal to such difference between the closing
price of the index and the exercise price of the option expressed in dollars
times a specified multiple. The writer of the option is obligated, in return for
the premium received, to make delivery of this amount. Unlike options on
specific securities, all settlements of options on stock indices are in cash and
gain or loss depends on general movements in the stocks included in the index
rather than price movements in particular stocks. Currently, options traded
include the S&P 100 Index, the S&P 500 Index, the NYSE Composite Index, the AMEX
Market Value Index, the National Over-the-Counter Index and other standard
broadly based stock market indices. Options are also traded in certain industry
or market segment indices such as the Computer Technology Index.
If the Fund's Investment Adviser expects general stock market prices to
rise, it might purchase a stock index futures contract, or a call option on that
index, as a hedge against an increase in prices of particular equity securities
it wants ultimately to buy. If the stock index does rise, the price of the
particular equity securities intended to be purchased may also increase, but
that increase would be offset in part by the increase in the value of the Fund's
futures contract or index option resulting from the increase in the index. If,
on the other hand, the Investment Adviser expects general stock market prices to
decline, it might sell a futures contract, or purchase a put option, on the
index. If that index does decline, the value of some or all of the equity
securities in the Fund's portfolio may also be expected to decline, but that
decrease would be offset in part by the increase in the value of the Fund's
position in such futures contract or put option.
The Fund may purchase and write call and put options on stock index futures
contracts. The Fund may use such options on futures contracts in connection with
its hedging strategies in lieu of purchasing and selling the underlying futures
or purchasing and writing options directly on the underlying securities or stock
indices. For example, the Fund may purchase put options or write call options on
stock index futures, rather than selling futures contracts, in anticipation of a
decline in general stock market prices or purchase call options or write put
options on stock index futures, rather than purchasing such futures, to hedge
against possible increases in the price of equity securities which the Fund
intends to purchase.
A-1
<PAGE>
In connection with transactions in stock index futures, stock index options
and options on stock index futures, the Fund will be required to deposit as
"initial margin" an amount of cash and short-term U.S. Government securities
equal to from 5% to 8% of the contract amount. Thereafter, subsequent payments
(referred to as "variation margin") are made to and from the broker to reflect
changes in the value of the futures contract.
OPTIONS ON SECURITIES
The Fund may write covered put and call options and purchase put and call
options on the securities in which it may invest that are traded on U.S.
securities exchanges. The Fund may also write call options that are not covered
for cross-hedging purposes.
The writer of an option may have no control over when the underlying
securities must be sold, in the case of a call option, or purchased, in the case
of a put option; the writer may be assigned an exercise notice at any time prior
to the termination of the obligation. Whether or not an option expires
unexercised, the writer retains the amount of the premium. This amount, of
course, may, in the case of a covered call option, be offset by a decline in the
market value of the underlying security during the option period. If a call
option is exercised, the writer experiences a profit or loss from the sale of
the underlying security. If a put option is exercised, the writer must fulfill
the obligation to purchase the underlying security at the exercise price which
will usually exceed the then market value of the underlying security.
The writer of an option that wished to terminate its obligation may effect a
"closing purchase transaction." This is accomplished by buying an option of the
same series as the option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after being notified of the
exercise of an option. Likewise, an investor who is the holder of an option may
liquidate its position by effecting a "closing sale transaction." This is
accomplished by selling an option of the same series as the option previously
purchased. There is no guarantee that either a closing purchase or a closing
sale transaction can be effected.
Effecting a closing transaction in the case of a written call option will
permit the Fund to write another call option on the underlying security with
either a different exercise price or expiration date or both, or in the case of
a written put option will permit the Fund to write another put option to the
extent that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will permit the
cash or proceeds from the concurrent sale of any securities subject to the
option to be used for other Fund investments. If the Fund desires to sell a
particular security from its portfolio on which it has written a call option, it
will effect a closing transaction prior to or concurrent with the sale of the
security.
The Fund will realize a profit from a closing transaction if the price of
the transaction is less than the premium received from writing the option or is
more than the premium paid to purchase the option; the Fund will realize a loss
from a closing transaction if the price of the transaction is more than the
premium received from writing the option or is less than the premium paid to
purchase the option. Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from the repurchase of a call option is likely to be offset in
whole or in part by appreciation of the underlying security owned by the Fund.
A-2
<PAGE>
An option position may be closed out only where there exists a secondary
market for an option of the same series. If a secondary market does not exist,
it might not be possible to effect closing transactions in particular options
with the result that the Fund would have to exercise the options in order to
realize any profit. If the Fund is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise. Reasons for the absence of a liquid secondary market include the
following: (i) there may be insufficient trading interest in certain options,
(ii) restrictions may be imposed by a national securities exchange ("Exchange")
on opening transactions or closing transactions or both, (iii) trading halts,
suspensions or other restrictions may be imposed with respect to particular
classes or series of options or underlying securities, (iv) unusual or
unforeseen circumstances may interrupt normal operations on an Exchange, (v) the
facilities of an Exchange or the Options Clearing Corporation may not at all
times be adequate to handle current trading volume, or (vi) one or more
Exchanges could, for economic or other reasons, decide or be compelled at some
future date to discontinue the trading of options (or a particular class or
series of options), in which event the secondary market on that Exchange (or in
that class or series of options) would cease to exist, although outstanding
options on that Exchange that had been issued by the Options Clearing
Corporation as a result of trades on that Exchange would continue to be
exercisable in accordance with their terms.
The Fund may write options in connection with buy-and-write transactions;
that is, the Fund may purchase a security and then write a call option against
that security. The exercise price of the call the Fund determines to write will
depend upon the expected price movement of the underlying security. The exercise
price of a call option may be below ("in-the-money"), equal to ("at-the-money")
or above ("out-of-the-money") the current value of the underlying security at
the time the option is written. Buy-and-write transactions using in-the-money
call options may be used when it is expected that the price of the underlying
security will remain flat or decline moderately during the option period.
Buy-and-write transactions using out-of-the-money call options may be used when
it is expected that the premiums received from writing the call option plus the
appreciation in the market price of the underlying security up to the exercise
price will be greater than the appreciation in the price of the underlying
security alone. If the call options are exercised in such transactions, the
Fund's maximum gain will be the premium received by it for writing the option,
adjusted upwards or downwards by the difference between the Fund's purchase
price of the security and the exercise price. If the options are not exercised
and the price of the underlying security declines, the amount of such decline
will be offset in part, or entirely, by the premium received.
The writing of covered put options is similar in terms of risk/return
characteristics to buy-and-write transactions. If the market price of the
underlying security rises or otherwise is above the exercise price, the put
option will expire worthless and the Fund's gain will be limited to the premium
received. If the market price of the underlying security declines or otherwise
is below the exercise price, the Fund may elect to close the position or take
delivery of the security at the exercise price and the Fund's return will be the
premium received from the put option minus the amount by which the market price
of the security is below the exercise price. Out-of-the-money, at-the-money and
in-the-money put options may be used by the Fund in the same market environments
that call options are used in equivalent buy-and-write transactions.
A-3
<PAGE>
The Fund may purchase put options to hedge against a decline in the value of
its portfolio. By using put options in this way, the Fund will reduce any profit
it might otherwise have realized in the underlying security by the amount of the
premium paid for the put option and by transaction costs.
The Fund may purchase call options to hedge against an increase in the price
of securities that the Fund anticipates purchasing in the future. The premium
paid for the call option plus any transaction costs will reduce the benefit, if
any, realized by the Fund upon exercise of the option, and, unless the price of
the underlying security rises sufficiently, the option may expire worthless to
the Fund.
RISK FACTORS IN FUTURES AND OPTIONS TRANSACTIONS
The effective use of futures and options strategies depends, among other
things, on the Fund's ability to terminate futures and options positions at
times when the Investment Adviser deems it desirable to do so. Although the Fund
will not enter into a futures or option position unless the Investment Adviser
believes that a liquid secondary market exists for such future or option, there
is no assurance that the Fund will be able to effect closing transactions at any
particular time or at an acceptable price. The Fund expects that its futures and
options transactions will be conducted on recognized commodities and securities
exchanges.
The use of futures and options involves the risk of imperfect correlation
between movements in futures and options prices and movements in the price of
securities which are the subject of the hedge. Such correlation, particularly
with respect to stock index futures and options on stock indices, is imperfect,
and such risk increases as the composition of the Fund's portfolio diverges from
the composition of the relevant index. The successful use of these strategies
also depends on the ability of the Investment Adviser to correctly forecast
general stock market price movements.
A-4
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE JUNDT GROWTH FUND, INC.
------------------
PROSPECTUS
DECEMBER 29, 1995
------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Fund.............................. 2
Purchase Information.................. 2
Fees and Expenses..................... 3
Financial Highlights.................. 5
Investment Objective and Policies..... 6
Management of the Fund................ 10
How to Buy Fund Shares................ 12
How to Redeem Fund Shares............. 18
Determination of Net Asset Value...... 21
Dividends, Distributions and Taxes.... 22
Performance Information............... 23
General Information................... 24
Appendix A -- General Characteristics
and Risks of Futures and Options..... A-1
</TABLE>
------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND, THE INVESTMENT ADVISER OR THE DISTRIBUTOR. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER
TO BUY, SHARES OF THE FUND IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFERING
OR SOLICITATION MAY NOT LAWFULLY BE MADE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL CREATE ANY IMPLICATION THAT
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.
INVESTMENT ADVISER
Jundt Associates, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416
DISTRIBUTOR
U.S. Growth Investments, Inc.
1550 Utica Avenue South
Suite 950
Minneapolis, Minnesota 55416
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9011
Princeton, New Jersey 08543
TRANSFER AGENT
Investors Fiduciary Trust Company
1004 Baltimore
Kansas City, Missouri 64105
CUSTODIAN
Norwest Bank Minnesota, N.A.
90 South Seventh Street
Minneapolis, Minnesota 55402
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
4200 Norwest Center
Minneapolis, Minnesota 55402
LEGAL COUNSEL
Faegre & Benson
Professional Limited Liability Partnership
2200 Norwest Center
Minneapolis, Minnesota 55402
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
THE JUNDT GROWTH FUND, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
THE JUNDT GROWTH FUND, INC.
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
STATEMENT OF ADDITIONAL INFORMATION
DATED DECEMBER 29, 1995
The Jundt Growth Fund, Inc. (the "Fund") is a professionally managed,
diversified, open-end management investment company (commonly known as a mutual
fund). The Fund currently has four classes of shares (each a "Class" and,
collectively, "Classes") -- Class A, Class B, Class C and Class D shares. Class
A shares are offered for sale exclusively to certain specified investors and are
not offered for sale to the public generally.
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus, dated December 29, 1995 (the
"Prospectus"), which has been filed with the Securities and Exchange Commission
(the "SEC"). To obtain a copy of the Prospectus, please call the Fund or your
investment executive.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Investment Objective, Policies and Restrictions........................................................... B-2
Taxes..................................................................................................... B-3
Advisory, Administrative and Distribution Agreements...................................................... B-5
Special Purchase Plans.................................................................................... B-9
Monthly Cash Withdrawal Plan.............................................................................. B-10
Determination of Net Asset Value.......................................................................... B-11
Calculation of Performance Data........................................................................... B-11
Directors and Officers.................................................................................... B-14
Counsel and Auditors...................................................................................... B-16
General Information....................................................................................... B-16
Financial and Other Information........................................................................... B-17
Financial Statements...................................................................................... F-1
</TABLE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS STATEMENT OF ADDITIONAL
INFORMATION OR IN THE PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
THE FUNDS INVESTMENT ADVISER OR PRINCIPAL UNDERWRITER. NEITHER THIS STATEMENT OF
ADDITIONAL INFORMATION NOR THE PROSPECTUS CONSTITUTES AN OFFER TO SELL, OR THE
SOLICITATION OF AN OFFER TO BUY, SHARES OF THE FUND IN ANY STATE OR JURISDICTION
IN WHICH SUCH OFFERING OR SOLICITATION MAY NOT LAWFULLY BE MADE. NEITHER THE
DELIVERY OF THIS STATEMENT OF ADDITIONAL INFORMATION NOR ANY SALE MADE HEREUNDER
(OR UNDER THE PROSPECTUS) SHALL CREATE ANY IMPLICATION THAT INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
B-1
<PAGE>
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
The Fund's investment objective and policies are set forth in the
Prospectus. Certain additional investment information is set forth below.
INVESTMENT RESTRICTIONS
The Fund has adopted certain FUNDAMENTAL RESTRICTIONS that may not be
changed without approval of shareholders owning a majority of the outstanding
voting securities of the Fund, as defined in the Investment Company Act of 1940,
as amended (the "Investment Company Act"). Under the Investment Company Act,
"majority of the outstanding voting securities" means the affirmative vote of
the lesser of (a) more than 50% of the outstanding shares of the Fund; or (b)
67% or more of the shares present at a meeting if more than 50% of the
outstanding shares are represented at the meeting in person or by proxy. As
fundamental policies, the Fund may not:
1. Invest more than 25% of its total assets in any one industry
(securities issued or guaranteed by the United States Government, its
agencies or instrumentalities are not considered to represent industries);
2. With respect to 75% of the Fund's assets, invest more than 5% of the
Fund's assets (taken at a market value at the time of purchase) in the
outstanding securities of any single issuer or own more than 10% of the
outstanding voting securities of any one issuer, in each case other than
securities issued or guaranteed by the United States Government, its
agencies or instrumentalities;
3. Borrow money or issue senior securities (as defined in the
Investment Company Act) except that the Fund may borrow in amounts not
exceeding 15% of its total assets from banks for temporary or emergency
purposes, including the meeting of redemption requests which might require
the untimely disposition of securities;
4. Pledge, mortgage or hypothecate its assets other than to secure
borrowings permitted by restriction 3 above (collateral arrangements with
respect to margin requirements for options and futures transactions are not
deemed to be pledges or hypothecations for this purpose);
5. Make loans of securities to other persons in excess of 25% of its
total assets; provided the Fund may invest without limitation in short-term
obligations (including repurchase agreements) and publicly distributed
obligations;
6. Underwrite securities of other issuers, except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933 in selling
portfolio securities;
7. Purchase or sell real estate or any interest therein, including
interests in real estate limited partnerships, except securities issued by
companies (including real estate investment trusts) that invest in real
estate or interests therein;
8. Purchase securities on margin, or make short sales of securities,
except for the use of short-term credit necessary for the clearance of
purchases and sales of portfolio securities, but it may make margin deposits
in connection with transactions in options, futures and options on futures;
B-2
<PAGE>
9. Purchase or sell commodities or commodity contracts, except that,
for the purpose of hedging, it may enter into contracts for the purchase or
sale of debt and/or equity securities for future delivery, including futures
contracts and options on domestic and foreign securities indices;
10. Make investments for the purpose of exercising control or
management; or
11. Invest more than 15% of its assets in illiquid securities.
In addition to the foregoing fundamental restrictions, the Fund has adopted
certain NON-FUNDAMENTAL RESTRICTIONS, which may be changed by the Fund's Board
of Directors without the approval of the Fund's shareholders. As non-fundamental
policies, the Fund may not:
1. Invest in securities issued by other investment companies in excess
of limitations imposed by federal and applicable state law;
2. Invest more than 10% of its net assets (taken at market value at the
time of purchase) in securities which cannot be readily resold because of
legal or contractual restrictions or which are not otherwise marketable;
3. Invest more than 10% of its assets (taken at market value at the
time of purchase) in the outstanding securities of any single issuer;
4. Purchase or sell interests in oil, gas or other mineral exploration
or development plans or leases;
5. Invest in warrants if at the time of acquisition more than 5% of its
total assets, taken at market value at the time of purchase, would be
invested in warrants, and if at the time of action more than 2% of its total
assets, taken at market value at the time of purchase, would be invested in
warrants not traded on the New York Stock Exchange. For purposes of this
restriction, warrants acquired by the Fund in units or attached to
securities may be deemed to be without value;
6. Invest more than 10% of its total assets in securities of issuers
which together with any predecessors have a record of less than three years
of continuous operation;
7. Own more than 10% of the outstanding voting securities of any one
issuer; or
8. Purchase equity securities in private placements.
With respect to each of the foregoing fundamental and non-fundamental
investment restrictions involving a percentage of the Fund's assets, if a
percentage restriction or limitation is adhered to at the time of an investment
or sale (other than a maturity) of a security, a later increase or decrease in
such percentage resulting from a change of values or net assets will not be
considered a violation thereof.
TAXES
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). To
so qualify, the Fund must, among other things: (a) derive in each taxable year
at least 90% of its gross income from dividends, interest, payments with respect
to securities loans, gains from the sale or other disposition of stock,
securities
B-3
<PAGE>
or foreign currencies, or other income derived with respect to its business of
investing in such stock, securities or currencies; (b) derive in each taxable
year less than 30% of its gross income from the sale or other disposition of
stock or securities, or options, futures, and certain forward contracts or
foreign currencies held for less than three months; and (c) satisfy certain
diversification requirements at the close of each quarter of the Funds taxable
year.
As a regulated investment company, the Fund will not be liable for federal
income taxes on the part of its taxable net investment income and net capital
gains, if any, that it distributes to shareholders, provided it distributes at
least 90% of its "investment company taxable income" (as that term is defined in
the Code) to Fund shareholders in each taxable year. However, if for any taxable
year a Fund does not satisfy the requirements of Subchapter M of the Code, all
of its taxable income will be subject to tax at regular corporate rates without
any deduction for distributions to shareholders, and such distributions will be
taxable to shareholders as ordinary income to the extent of the Fund's current
or accumulated earnings and profits.
The Fund will be liable for a nondeductible 4% excise tax on amounts not
distributed on a timely basis in accordance with a calendar year distribution
requirement. To avoid the tax, during each calendar year the Fund must
distribute: (i) at least 98% of its taxable ordinary income (not taking into
account any capital gains or losses) for the calendar year; (ii) at least 98% of
its capital gain net income for the twelve month period ending on October 31 (or
December 31, if the Fund so elects); and (iii) any portion (not taxed to the
Fund) of the respective balances from the prior year. To the extent possible,
the Fund intends to make sufficient distributions to avoid this 4% excise tax.
The Fund, or the shareholder's broker with respect to the Fund, is required
to withhold federal income tax at a rate of 31% of dividends, capital gains
distributions and proceeds of redemptions if a shareholder fails to furnish the
Fund with a correct taxpayer identification number ("TIN") or to certify that he
is exempt from such withholding, or if the Internal Revenue Service notifies the
Fund or broker that the shareholder has provided the Fund with an incorrect TIN
or failed to properly report dividend or interest income for federal income tax
purposes. Any such withheld amount will be fully creditable on the shareholders
federal income tax return. An individual's TIN is his social security number.
The Fund may write, purchase or sell options or futures contracts.
Generally, options and futures contracts that are "Section 1256 contracts" will
be "marked to market" for federal income tax purposes at the end of each taxable
year, I.E., each option or futures contract will be treated as sold for its fair
market value on the last day of the taxable year. Gain or loss from transactions
in options and futures contracts that are subject to the "marked to market" rule
will be 60% long-term and 40% short-term capital gain or loss. However, the Fund
may be eligible to make a special election under which certain "Section 1256
contracts" would not be subject to the "marked to market" rule.
Code Section 1092, which applies to certain "straddles," may affect the
taxation of the Fund's transactions in options and futures contracts. Under
Section 1092, the Fund may be required to postpone recognition for tax purposes
of losses incurred in certain closing transactions in options and futures.
One of the requirements for qualification as a registered investment company
is that less than 30% of the Fund's gross income may be derived from gains from
the sale or other disposition of
B-4
<PAGE>
securities, including options, futures and forward contracts, held for less than
three months. Accordingly, the Fund may be restricted in effecting closing
transactions within three months after entering into an option or futures
contract.
ADVISORY, ADMINISTRATIVE AND DISTRIBUTION AGREEMENTS
INVESTMENT ADVISORY AGREEMENT
Jundt Associates, Inc. (the "Investment Adviser") has been retained as the
Fund's investment adviser pursuant to an investment advisory agreement entered
into by and between the Fund and Investment Adviser (the "Advisory Investment
Agreement"). Under the terms of the Investment Advisory Agreement, the
Investment Adviser furnishes continuing investment supervision to the Fund and
is responsible for the management of the Fund's portfolio. The responsibility
for making decisions to buy, sell or hold a particular security rests with the
Investment Adviser, subject to review by the Board of Directors.
The Investment Adviser furnishes office space, equipment and personnel to
the Fund in connection with the performance of its investment management
responsibilities. In addition, the Investment Adviser pays the salaries and fees
of all officers and directors of the Fund who are affiliated persons of the
Investment Adviser.
The Fund pays all other expenses incurred in the operation of the Fund
including, but not limited to, brokerage and commission expenses; interest
charges; fees and expenses of legal counsel and independent auditors; the Fund's
organizational and offering expenses, whether or not advanced by the Investment
Adviser; taxes and governmental fees; expenses (including clerical expenses) of
issuance, sale or repurchase of the Fund's shares; membership fees in trade
associations; expenses of registering and qualifying shares of the Fund for sale
under federal and state securities laws; expenses of printing and distributing
reports, notices and proxy materials to existing shareholders; expenses of
regular and special shareholders meetings; expenses of filing reports and other
documents with governmental agencies; charges and expenses of the Fund's
administrator, custodian and registrar, transfer agent and dividend disbursing
agent; expenses of disbursing dividends and distributions; compensation of the
Fund's officers, directors and employees who are not affiliated with the
Investment Adviser; travel expenses of directors of the Fund for attendance at
meetings of the Board of Directors; insurance expenses; indemnification and
other expenses not expressly provided for in the Investment Advisory Agreement;
and any extraordinary expenses of a non-recurring nature.
For its services, the Investment Adviser receives from the Fund a monthly
fee at an annual rate of 1% of the Fund's average daily net assets. These fees
exceed those paid by most other investment companies. During the fiscal years
ended June 30, 1993, June 30, 1994 and December 31, 1994 (a six-month fiscal
year occasioned by the change in the Fund's fiscal year end from June 30 to
December 31 during such period), the Fund paid the Investment Adviser fees of
$4,648,228, $2,586,007, and $1,092,907, respectively.
The Investment Advisory Agreement continues in effect from year to year, if
specifically approved at least annually by a majority of the Fund's directors,
including a majority of the directors who are not interested persons (as defined
in the Investment Company Act) of the Fund or the Investment Adviser
("Independent Directors") at a meeting in person. The Investment Advisory
Agreement may be terminated by either party, by the Independent Directors or by
a vote of the holders of a majority of
B-5
<PAGE>
the outstanding securities of the Fund, at any time, without penalty, upon 60
days' written notice, and automatically terminates in the event of its
"assignment" (as defined in the Investment Company Act).
PORTFOLIO TRANSACTIONS, BROKERAGE COMMISSIONS AND PORTFOLIO TURNOVER RATE
Subject to policies established by the Board of Directors of the Fund, the
Investment Adviser is responsible for investment decisions and for the execution
of the Fund's portfolio transactions. The Fund has no obligation to deal with
any particular broker or dealer in the execution of transactions in portfolio
securities. In executing such transactions, the Investment Adviser seeks to
obtain the best price and execution for its transactions. While the Investment
Adviser generally seeks reasonably competitive commission rates, the Fund does
not necessarily pay the lowest commission.
For the fiscal year ended December 31, 1994 (which consisted of the
six-month period from July 1 to December 31, 1994) and for the twelve months
ended December 31, 1994, the Fund paid brokerage commissions of $56,048 and
$133,214, respectively, to brokers. Of these amounts, $8,586 (15.32% of total
commissions paid by the Fund) and $15,426 (11.58% of total commissions paid by
the Fund), respectively, were paid to Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch"), an affiliated person of Princeton
Administrators, L.P., the Fund's administrator. Additionally, the Fund entered
into principal transactions (excluding short-term securities) with Merrill Lynch
aggregating $3,314,696 and $7,252,312 for the fiscal year ended December 31,
1994 (which consisted of the six-month period from July 1 to December 31, 1994)
and for the 12 months ended December 31, 1994, respectively. No commissions were
paid to brokers which are affiliated persons of the Fund as defined in the
Investment Company Act. The Fund's portfolio turnover rate for these same
periods was 19% and 48%, respectively.
ADMINISTRATION AGREEMENT
Under the terms of an administration agreement by and between Princeton
Administrators, L.P. (the "Administrator") and the Fund (the "Administration
Agreement"), the Administrator performs or arranges for the performance of the
following administrative services: (a) maintenance and keeping of certain books
and records of the Fund; (b) preparation or review and, subject to the Fund's
review, filing certain reports and other documents required by federal, state
and other applicable U.S. laws and regulations to maintain the Fund's
registration as an open-end investment company; (c) coordination of tax related
matters; (d) response to inquiries from Fund shareholders; (e) calculation and
dissemination for publication of the net asset value of the Fund's shares; (f)
oversight and, as the Fund's Board of Directors may request, preparation of
reports and recommendations to the Board of Directors on the performance of
administrative and professional services rendered to the Fund by others,
including the Fund's custodian and any subcustodian, registrar, transfer agency,
and dividend disbursing agent, as well as accounting, auditing and other
services; (g) provision of competent personnel and administrative offices
necessary to perform its services under the Administration Agreement; (h)
arrangement for the payment of Fund expenses; (i) consultations with Fund
officers and various service providers in establishing the accounting policies
of the Fund; (j) preparation of such financial information and reports as may be
required by any banks from which the Fund borrows funds; and (k) provision of
such assistance to the Investment Adviser, the custodian and any subcustodian,
and the Fund's counsel and auditors as generally may be required to carry on
properly the business and operations of the Fund. Under the Administration
B-6
<PAGE>
Agreement, the Fund agrees to cause its transfer agent to timely deliver to the
Administrator such information as may be necessary or appropriate for the
Administrator's performance of its duties and responsibilities to the Fund.
The Administrator is obligated, at its expense, to provide office space,
facilities, equipment and necessary personnel in connection with its provision
of services under the Administration Agreement; however, the Fund (in addition
to the fees payable to the Administrator under the Administration Agreement, as
described below) has agreed to pay reasonable travel expenses of persons who
perform administrative, clerical and bookkeeping functions on behalf of the
Fund. Additionally, the expenses of legal counsel and accounting experts
retained by the Administrator, after consulting with Fund counsel and
independent auditors, as may be necessary or appropriate in connection with the
Administrator's provision of services to the Fund, are deemed expenses of, and
shall be paid by, the Fund.
For the services rendered to the Fund and the facilities furnished, the Fund
is obliged to pay the Administrator, subject to an annual minimum fee of
$125,000, a monthly fee at an annual rate of .20% of the first $600 million of
the Fund's average daily net assets and .175% of the Fund's average daily net
assets in excess of $600 million. Prior to the conversion of the Fund from a
closed-end investment company into an open-end investment company immediately
following the close of business on the New York Stock Exchange on December 28,
1995 (the "Open-End Conversion"), the Fund paid the Administrator, subject to an
annual minimum fee of $150,000, a monthly fee at an annual rate of .25% of the
Fund's average weekly net assets not exceeding $300 million and .20% of the
average weekly net assets in excess of $300 million. During the fiscal years
ended June 30, 1993, June 30, 1994 and December 31, 1994 (which consisted of the
six-month period from July 1 to December 31, 1994), the Fund paid the
Administrator fees and expense reimbursements of $1,079,645, $636,273, and
$273,227, respectively, under the Administration Agreement then in effect.
The Administration Agreement will remain in effect unless and until
terminated in accordance with its terms. It may be terminated at any time,
without the payment of any penalty, by the Fund on sixty days written notice to
the Administrator and by the Administrator on ninety days written notice to the
Fund. The Administration Agreement terminates automatically in the event of its
assignment.
The principal address of the Administrator is P.O. Box 9011, Princeton, New
Jersey 08543.
THE DISTRIBUTOR
Pursuant to a Distribution Agreement by and between U.S. Growth Investments,
Inc. (the "Distributor") and the Fund (the "Distribution Agreement"), the
Distributor serves as the principal underwriter of the Fund's shares. The Fund's
shares are offered continuously by and through the Distributor. As agent of the
Fund, the Distributor accepts orders for the purchase and redemption of Fund
shares. The Distributor may enter into selling agreements with other dealers and
financial institutions, pursuant to which such dealers and/or financial
institutions also may sell Fund shares.
RULE 12B-1 DISTRIBUTION PLANS
Rule 12b-1 under the Investment Company Act provides that any payments made
by the Fund (or any Class thereof) in connection with the distribution of its
shares must be pursuant to a written plan describing all material aspects of the
proposed financing of distribution and that any agreements entered into in
furtherance of the plan must likewise be in writing. In accordance with Rule
12b-1,
B-7
<PAGE>
effective at the time of the Open-End Conversion, the Fund adopted a separate
Rule 12b-1 Distribution Plan for each of its Class B, Class C and Class D
shares. There is no Rule 12b-1 Distribution Plan for the Fund's Class A shares.
Rule 12b-1 requires that the Distribution Plans (the "Plans") and the
Distribution Agreement be approved initially, and thereafter at least annually,
by a vote of the Board of Directors including a majority of the directors who
are not interested persons of the Fund and who have no direct or indirect
interest in the operation of the Plans or in any agreement relating to the
Plans, cast in person at a meeting called for the purpose of voting on the plan
or agreement. Rule 12b-1 requires that the Distribution Agreement and each Plan
provide, in substance:
(a) that it shall continue in effect for a period of more than one year
from the date of its execution or adoption only so long as such continuance
is specifically approved at least annually in the manner described in the
preceding paragraph;
(b) that any person authorized to direct the disposition of moneys paid
or payable by the Fund pursuant to the Plan or any related agreement shall
provide to the Fund's Board of Directors, and the directors shall review, at
least quarterly, a written report of the amounts so expended and the
purposes for which such expenditures were made; and
(c) in the case of a Plan, that it may be terminated at any time by a
vote of a majority of the members of the Fund's Board of Directors who are
not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
to the Plan or by a vote of a majority of the outstanding voting shares of
each affected Class or Classes of the Fund's shares.
Rule 12b-1 further requires that none of the Plans may be amended to
increase materially the amount to be spent for distribution without approval by
the shareholders of the affected Class or Classes and that all material
amendments of the Plan must be approved in the manner described in the paragraph
preceding clause (a) above.
Rule 12b-1 provides that the Fund may rely upon Rule 12b-1 only if the
selection and nomination of the Fund's disinterested directors are committed to
the discretion of such disinterested directors. Rule 12b-1 provides that the
Fund may implement or continue the Plans only if the directors who vote to
approve such implementation or continuation conclude, in the exercise of
reasonable business judgment and in light of their fiduciary duties under state
law, and under Sections 36(a) and (b) of the Investment Company Act, that there
is a reasonable likelihood that each Plan will benefit the Fund and its
shareholders. The Board of Directors has concluded that there is a reasonable
likelihood that the Distribution Plans will benefit the Fund and its
shareholders.
Under its Distribution Plan, each of Class B, Class C and Class D pays the
Distributor a Rule 12b-1 account maintenance fee equal on an annual basis to
.25% of the average daily net assets attributable to each such Class. This
account maintenance fee is designed to compensate the Distributor and certain
broker-dealers and financial institutions with which the Distributor has entered
into selling arrangements for the provision of certain services to the holders
of Fund shares, including, but not limited to, answering shareholder questions,
providing shareholders with reports and other information and providing various
other services relating to the maintenance of shareholder accounts.
The Distribution Plans of Class B and Class C provide for the additional
payment of a Rule 12b-1 distribution fee to the Distributor, equal on an annual
basis to .75% of the average daily net assets
B-8
<PAGE>
attributable to such Class. This fee is designed to compensate the Distributor
for advertising, marketing, and distributing the Class B and Class C shares,
including the provision of initial and ongoing sales compensation to the
Distributors sales representatives and to other broker-dealers and financial
institutions with which the Distributor has entered into selling arrangements.
SPECIAL PURCHASE PLANS
AUTOMATIC INVESTMENT PLAN. As a convenience to investors, shares may be
purchased through a preauthorized automatic investment plan. Such preauthorized
investments (at least $50) may be used to purchase shares of the Fund at the
public offering price next determined after the Fund receives the investment
(normally the 5th of each month, or the next business day thereafter). Further
information is available from the Distributor.
COMBINED PURCHASE PRIVILEGE. The following persons (or groups of persons)
may qualify for reductions from the front-end sales charge ("FESC") schedule for
Class A or Class D shares set forth in the Prospectus by combining purchases of
any Class of Fund shares, if the combined purchase of all Fund shares totals at
least $25,000:
(i) an individual or a company as defined in Section 2(a)(8) of the
Investment Company Act;
(ii) an individual, his or her spouse and their children under
twenty-one, purchasing for his, her or their own account;
(iii) a trustee or other fiduciary purchasing for a single trust estate
or single fiduciary account (including a pension, profit-sharing or other
employee benefit trust) created pursuant to a plan qualified under Section
401 of the Code;
(iv) tax-exempt organizations enumerated in Section 501(c)(3) of the
Code;
(v) employee benefit plans of a single employer or of affiliated
employers;
(vi) any organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company, and provided that
the purchase is made through a central administration, or through a single
dealer, or by other means which result in economy of sales effort or
expense. An organized group does not include a group of individuals whose
sole organizational connection is participation as credit cardholders of a
company, policyholders of an insurance company, customers of either a bank
or broker-dealer, or clients of an investment adviser.
CUMULATIVE QUANTITY DISCOUNT (RIGHT OF ACCUMULATION). A purchase of Class A
or Class D shares may qualify for a Cumulative Quantity Discount. The applicable
FESC will then be based on the total of:
(i) the investor's current purchase; and
(ii) the net asset value (at the close of business on the previous day)
of Fund shares held by the investor; and
(iii) the net asset value of shares of any Class of Fund shares owned by
another shareholder eligible to participate with the investor in a Combined
Purchase Privilege (see above).
B-9
<PAGE>
For example, if an investor owned shares worth $15,000 at the then current
net asset value and purchased an additional $10,000 of shares, the sales charge
for the $10,000 purchase would be at the rate applicable to a single $25,000
purchase.
To qualify for the Combined Purchase Privilege or to obtain the Cumulative
Quantity Discount on a purchase through an investment dealer, when each purchase
is made the investor or dealer must provide the Fund with sufficient information
to verify that the purchase qualifies for the privilege or discount.
LETTER OF INTENTION. Investors wishing to purchase Class A or Class D
shares may also obtain the reduced FESC shown in the Prospectus by means of a
written Letter of Intention, which expresses the investor's intention to invest
not less than $25,000 (including certain "credits," as described below) within a
period of 13 months in any Class of Fund shares. Each purchase of shares under a
Letter of Intention will be made at the public offering price applicable at the
time of such purchase to a single transaction of the dollar amount indicated in
the Letter of Intention. A Letter of Intention may include purchases of shares
made not more than 90 days prior to the date that an investor signs a Letter of
Intention; however, the 13-month period during which the Letter of Intention is
in effect will begin on the date of the earliest purchase to be included.
Investors qualifying for the Combined Purchase Privilege described above may
purchase shares under a single Letter of Intention.
For example, assume that on the date an investor signs a Letter of Intention
to invest at least $25,000 as set forth above and the investor and the investors
spouse and children under twenty-one have previously invested $10,000 in shares
which are still held by such persons. It will only be necessary to invest a
total of $15,000 during the 13 months following the first date of purchase of
such shares in order to qualify for the sales charges applicable to investments
of $25,000.
The Letter of Intention is not a binding obligation upon the investor to
purchase the full amount indicated. The minimum initial investment under a
Letter of Intention is 5% of such amount. Shares purchased with the first 5% of
such amount will be held in escrow to secure payment of the higher sales charge
applicable to the shares actually purchased if the full amount indicated is not
purchased. When the full amount indicated has been purchased, the escrow will be
released. To the extent that an investor purchases more than the dollar amount
indicated on the Letter of Intention and qualifies for further reduced sales
charges, the sales charges will be adjusted for the entire amount purchased at
the end of the 13-month period. The difference in sales charges will be used to
purchase additional shares at the then current offering price applicable to the
actual amount of the aggregate purchases.
Investors electing to take advantage of the Letter of Intention should
carefully review the appropriate provisions on the general authorization form
attached to the Prospectus.
MONTHLY CASH WITHDRAWAL PLAN
Any investor who owns or buys shares of the Fund valued at $10,000 or more
at the current offering price may open a Withdrawal Plan and have a designated
sum of money paid monthly to the investor or another person. Shares are
deposited in a Withdrawal Plan account and all distributions are reinvested in
additional shares of the Fund at net asset value. Shares in a Withdrawal Plan
account are then redeemed at net asset value to make each withdrawal payment.
Deferred sales charges may apply to monthly redemptions of shares. Redemptions
for the purpose of withdrawal are made on the 20th of the month (or on the
preceding business day if the 20th falls on a weekend or is a holiday) at that
day's closing net asset value, and checks are mailed on the next business day.
B-10
<PAGE>
Payments will be made to the registered shareholder or to another party if
preauthorized by the registered shareholder. As withdrawal payments may include
a return on principal, they cannot be considered a guaranteed annuity or actual
yield of income to the investor. The redemption of shares in connection with a
Withdrawal Plan may result in a gain or loss for tax purposes. Continued
withdrawals in excess of income will reduce and possibly exhaust invested
principal, especially in the event of a market decline. The maintenance of a
Withdrawal Plan concurrently with purchases of additional shares of a Class of
Fund shares which imposes an FESC would normally be disadvantageous to the
investor because of the FESC payable on such purchases. For this reason, an
investor may not maintain an Automatic Investment Plan for the accumulation of
shares of a Fund or Class of Fund shares which imposes an FESC (other than
through reinvestment of distributions) and a Withdrawal Plan at the same time.
The cost of administering Withdrawal Plans is borne by the Fund as an expense of
all shareholders. The Fund or the Distributor may terminate or change the terms
of the Withdrawal Plan at any time. The Withdrawal Plan is fully voluntary and
may be terminated by the shareholder at any time without the imposition of any
penalty.
Since the Withdrawal Plan may involve invasion of capital, investors should
consider carefully with their own financial advisers whether the Withdrawal Plan
and the specified amounts to be withdrawn are appropriate in their
circumstances. The Fund makes no recommendations or representations in this
regard.
DETERMINATION OF NET ASSET VALUE
The net asset value per share is calculated separately for each Class of
shares. The assets and liabilities attributable to each Class of shares is
determined in accordance with generally accepted accounting principles and
applicable SEC rules and regulations.
The portfolio securities in which the Fund invests fluctuate in value, and
hence the Fund's net asset value per share also fluctuates. On December 1, 1995
(which was prior to the Open-End Conversion and, therefore, prior to the
creation and offering by the Fund of different Classes of its shares), the Funds
net asset value per share was calculated as follows:
<TABLE>
<C> <S>
Net Assets ($265,656,905)
------------------------------ = Net Asset Value Per Share ($17.78)
Shares Outstanding (14,940,097)
</TABLE>
CALCULATION OF PERFORMANCE DATA
For purposes of quoting and comparing the performance of each Class of the
Fund's shares to that of other mutual funds and to other relevant market indices
in advertisements or in reports to shareholders, performance may be stated in
terms of "average annual total return" or "cumulative
B-11
<PAGE>
total return." These total return quotations are and will be computed separately
for each Class of shares. Under the rules of the SEC, funds advertising
performance must include average annual total return quotations calculated
according to the following formula:
P(1+T)(n) = ERV
<TABLE>
<C> <C> <S>
Where: P = a hypothetical initial payment of $1,000;
T = average annual total return;
n = number of years; and
ERV = ending redeemable value at the end of the period of a hypothetical
$1,000 payment made at the beginning of such period.
</TABLE>
This calculation assumes all dividends and capital gains distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.
Cumulative total return is computed by finding the cumulative compounded
rate of return over the period indicated in the advertisement that would equate
the initial amount invested to the ending redeemable value, according to the
following formula:
ERV - P
CTR = (________) x 100
P
<TABLE>
<C> <C> <S>
Where: CTR = Cumulative total return;
ERV = ending redeemable value at the end of the period of a hypothetical
$1,000 payment made at the beginning of such period; and
P = initial payment of $1,000.
</TABLE>
This calculation assumes all dividends and capital gain distributions are
reinvested at net asset value on the appropriate reinvestment dates as described
in the Prospectus, and includes all recurring fees, such as investment advisory
and management fees, charged to all shareholder accounts.
Under each of the above formulas, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertisement for publication.
Performance information for any period prior to the Open-End Conversion reflects
the performance of the Fund as a closed-end fund and does not reflect payment of
the underwriting discount paid in connection with the public offerings of the
Funds shares as a closed-end fund. In addition, as an open-end fund, the Fund
incurs certain additional expenses as a result of the continuous offering and
redemption of its shares.
The average annual total return and cumulative total return figures
calculated in accordance with the foregoing formulas assume in the case of Class
A and Class D shares the maximum FESC has been deducted from the hypothetical
initial investment at the time of purchase, or in the case of Class B or Class C
shares the maximum applicable CDSC has been paid upon the hypothetical
redemption of the shares at the end of the period.
The following table sets forth average annual total return and cumulative
total return figures for certain periods ended on June 30, 1995 (which preceded
the Open-End Conversion). Performance prior to the Open-End Conversion can be
restated to reflect the imposition of the applicable FESC or
B-12
<PAGE>
CDSC but otherwise must reflect actual expenses borne by the Fund during such
time periods (and cannot be restated to reflect expenses to be borne by each
Class of the Fund's shares following the Open-End Conversion, including, but not
limited to, Rule 12b-1 fees). Therefore, to avoid investor confusion,
performance that occurred prior to the Open-End Conversion will be calculated
and quoted only on the Fund's Class A shares, and will assume investments are
not subject to any CDSC. SUCH PERFORMANCE SHOULD NOT BE UTILIZED IN EVALUATING
THE RELATIVE MERITS OF EACH AVAILABLE CLASS OF FUND SHARES.
<TABLE>
<CAPTION>
SINCE
1 YEAR INCEPTION(1)
--------- -------------
<S> <C> <C>
Average Annual Total Return on Class A Shares:
With deduction of maximum FESC.................................................. 17.52% 5.2 %
Without deduction of maximum FESC............................................... 24.03% 6.7 %
Cumulative Total Return on Class A Shares
With deduction of maximum FESC.................................................. 17.52% 21.41%
Without deduction of maximum FESC............................................... 24.03% 28.14%
</TABLE>
- ------------------------
(1) The Fund commenced operations as a closed-end fund on September 3, 1991.
Past performance is not predictive of future performance. All advertisements
containing performance data of any kind will include a legend disclosing that
such performance data represents past performance and that the investment return
and principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their original cost.
Advertisements and communications may compare the performance of Fund shares
with that of other mutual funds, as reported by Lipper Analytical Services, Inc.
or similar independent services or financial publications, and may also contrast
the Fund's investment policies and portfolio flexibility with other mutual
funds. From time to time, advertisements and other Fund materials and
communications may cite statistics to reflect the performance over time of Fund
shares, utilizing generally accepted indices or analyses, including, but not
limited to, those published by Lipper Analytical Service, Inc., Standard & Poors
Corporation, Dow Jones & Company, Inc., CDA Investment Technologies, Inc.,
Morningstar, Inc. and Investment Company Data Incorporated. Performance ratings
reported periodically in national financial publications also may be used. In
addition, advertising materials may include the Investment Adviser's analysis
of, or outlook for, the economy or financial markets, compare the Investment
Adviser's analysis or outlook with the views of others in the financial
community and refer to the expertise of the Investment Adviser's personnel and
their reputation in the financial community.
B-13
<PAGE>
DIRECTORS AND OFFICERS
Directors and officers of the Fund, together with information as to their
principal occupations during the past five years, are set forth below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS POSITIONS WITH THE FUND PAST 5 YEARS AND OTHER AFFILIATIONS
- -------------------------------- ---------------------------- -------------------------------------------------
<S> <C> <C>
James R. Jundt (1)(2) Chairman of the Board, Chairman of the Board, Chief Executive Officer,
1550 Utica Avenue South President and Chief Secretary and portfolio manager of the
Suite 950 Executive Officer Investment Adviser since its inception in 1982.
Minneapolis, MN 55416 Also a trustee of Gonzaga University and the
Minneapolis Institute of Arts and a director of
three private companies. Chairman of the Board,
President and Chief Executive Officer of Jundt
Funds, Inc. since 1995.
John E. Clute Director Dean and Professor of Law, Gonzaga University
East 702 Sharp Avenue School of Law (since August 1, 1991); previously
Spokane, WA 99202 Senior Vice President -- Human Resources and
General Counsel, Boise Cascade Corporation
(forest products) for more than five years.
Director of Jundt Funds, Inc. since 1995. Also a
director of Hecla Mining Company (mining).
Floyd Hall Director Chairman, President and Chief Executive Officer
3100 West Big Beaver Road of K-Mart Corporation (retailing) since June
Troy, MI 48084 1995. Chairman and Chief Executive Officer of
The Museum Company (retailing) and Alva Replicas
Company (manufacturer of statuary and sculpture)
from July 1989 to June 1995; from March 1984 to
July 1989 Chairman and Chief Executive Officer
of The Grand Union Company (grocery store
chain). Director of Jundt Funds, Inc. since
1995. Also a director of Jamesway Corp.
(discount retailing) as well as a private
company.
</TABLE>
B-14
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING
NAME AND ADDRESS POSITIONS WITH THE FUND PAST 5 YEARS AND OTHER AFFILIATIONS
- -------------------------------- ---------------------------- -------------------------------------------------
<S> <C> <C>
Demetre M. Nicoloff Director Cardiac and thoracic surgeon, Cardiac Surgical
1492 Hunter Drive Associates, P.A., Minneapolis, Minnesota.
Wayzata, MN 55391 Director of Jundt Funds, Inc. since 1995. Also a
director of Optical Sensors for Medicine, Inc.
(patient monitoring equipment); ATS Medical,
Inc. (heart valves), Micromedics, Inc.
(instrument trays, ENT specialty products and
fibrin glue applicators); Possis Medical Inc.
(cardio-vascular surgical products); Applied
Biometrics, Inc. (cardiac output measuring
devices) and Sonometrics, Inc. (ultrasound
imaging equipment).
Darrell R. Wells Director Managing Director, Security Management Company
4350 Brownsboro Road (asset management firm). Director of Jundt
Louisville, KY 40207 Funds, Inc. since 1995. Also a director of
Churchill Downs Inc. (race track operator), and
Citizen's Financial Inc. (insurance holding
company), as well as several private companies.
Donald M. Longlet Vice President and Treasurer Portfolio manager since May 1989 with the
1550 Utica Avenue South Investment Adviser; portfolio manager with AMEV
Suite 950 Advisers, Inc., St. Paul, Minnesota, from
Minneapolis, MN 55416 January 1983 to April 1989. Vice President and
Treasurer of Jundt Funds, Inc. since 1995.
James E. Nicholson Secretary Partner with the law firm of Faegre & Benson
2200 Norwest Center Professional Limited Liability Partnership,
Minneapolis, MN 55402 Minneapolis, Minnesota, which has served as
general counsel to the Investment Adviser since
its inception. Secretary of Jundt Funds, Inc.
since 1995.
</TABLE>
- ------------------------
(1) Director who is an "interested person" of the Fund, as defined in the
Investment Company Act.
(2) "Controlling person" of the Investment Adviser, as defined in the Investment
Company Act. Mr. Jundt beneficially owns 76% of the capital stock of the
Investment Adviser. Mr. Jundt also owns 100% of the capital stock of the
Distributor and is, therefore, a "controlling person" of the Distributor as
well.
B-15
<PAGE>
Since December 4, 1995 the Fund and Jundt Funds, Inc. together pay each
director who is not an "interested person" of either the Fund or Jundt Funds,
Inc. a fee of $12,000 per year plus $1,200 for each meeting attended and
reimburses each such director for the expenses of attendance at such meetings.
Prior to December 4, 1995 (which preceded the payment of any fees to the
directors of the newly organized Jundt Funds, Inc.), the Fund paid each such
director a fee of $10,000 per year plus $1,000 for each meeting attended. No
compensation is paid by the Fund to its officers or to any of its directors who
are "interested persons" either the Fund or Jundt Funds, Inc.
Director fees and expenses aggregated $40,491 for the fiscal year ended
December 31, 1994 (which consisted of the six-month period from July 1 to
December 31, 1994) and $73,270 for the twelve months ended December 31, 1994.
The following table sets forth for such periods the aggregate compensation
(excluding expenses) paid by the Fund to its directors:
COMPENSATION TABLE
<TABLE>
<CAPTION>
AGGREGATE COMPENSATION
FROM THE FUND
-------------------------------------------------------------
SIX-MONTH
PERIOD FROM TWELVE-MONTH PENSIONS OR RETIREMENT
JULY 1, 1994 TO PERIOD ENDED BENEFITS ACCRUED AS
NAME OF DIRECTOR DECEMBER 31, 1994 DECEMBER 31, 1994 PART OF FUND EXPENSES
- ---------------------------------------------------- ----------------- ----------------- -----------------------
<S> <C> <C> <C>
James R. Jundt...................................... None None None
Demetre M. Nicoloff................................. $ 8,000 $ 15,000 None
Darrell R. Wells.................................... $ 8,000 $ 15,000 None
John E. Clute....................................... $ 8,000 $ 15,000 None
Floyd Hall.......................................... $ 8,000 $ 15,000 None
</TABLE>
COUNSEL AND AUDITORS
Faegre & Benson Professional Limited Liability Partnership, 2200 Norwest
Center, 90 South Seventh Street, Minneapolis, Minnesota 55402, serves as the
Funds general counsel. KPMG Peat Marwick LLP, 4200 Norwest Center, 90 South
Seventh Street, Minneapolis, Minnesota 55402, has been selected as the
independent auditors of the Fund for its fiscal years ending December 31, 1995
and 1996, respectively.
GENERAL INFORMATION
Under Minnesota law, each Fund director owes certain fiduciary duties to the
Fund and to its shareholders. Minnesota law provides that a director "shall
discharge the duties of the position of director in good faith, in a manner the
director reasonably believes to be in the best interest of the corporation, and
with the care an ordinary prudent person in a like position would exercise under
similar circumstances." Fiduciary duties of a director of a Minnesota
corporation include, therefore, both a duty of "loyalty" (to act in good faith
and act in a manner reasonably believed to be in the best interests of the
corporation) and a duty of "care" (to act with the care an ordinarily prudent
person in a like position would exercise under similar circumstances). Minnesota
law authorizes corporations to eliminate or limit the liability of directors:
(a) for any breach of the directors' duty of "loyalty" to the corporation or its
shareholders; (b) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of Minnesota law or for violation
of certain provisions of Minnesota
B-16
<PAGE>
securities laws; or, (c) for any transaction from which the directors derived an
improper personal benefit. The Fund's Articles of Incorporation limit the
liability of the Fund's directors to the fullest extent permitted by Minnesota
statutes, except to the extent that such liability cannot be limited as provided
in the Investment Company Act (which prohibits any provisions which purport to
limit the liability of directors arising from such directors' willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of their role as directors).
Minnesota law does not eliminate the duty of "care" imposed upon a director.
It only authorizes a corporation to eliminate monetary liability for violations
of that duty. Minnesota law, further, does not permit elimination or limitation
of liability of "officers" to the corporation for breach of their duties as
officers (including the liability of directors who serve as officers for breach
of their duties as officer). Minnesota law does not permit elimination of the
availability of equitable relief, such as injunctive or rescissionary relief.
These remedies, however, may be ineffective in situations where shareholders
become aware of such a breach after a transaction has been consummated and
rescission has become impractical. Further, Minnesota law does not permit
elimination or limitation of a director's liability under the Securities Act of
1933 or the Securities Exchange Act of 1934, and it is uncertain whether and to
what extent the elimination of monetary liability would extend to violations of
duties imposed on directors by the Investment Company Act and the rules and
regulations thereunder.
The Fund is not required under Minnesota law to hold annual or periodically
scheduled regular meetings of shareholders. Regular and special shareholder
meetings are held only at such times and with such frequency as required by law.
Minnesota corporation law provides for the Board of Directors to convene
shareholder meetings when it deems appropriate. In addition, if a regular
meeting of shareholders has not been held during the immediately preceding
fifteen months, a shareholder or shareholders holding three percent or more of
the voting shares of the Fund may demand a regular meeting of shareholders of
the Fund by written notice of demand given to the chief executive officer or the
chief financial officer of the Fund. Within ninety days after receipt of the
demand, a regular meeting of shareholders must be held at the expense of the
Fund. Irrespective of whether a regular meeting of shareholders has been held
during the immediately preceding fifteen months, in accordance with Section
16(c) under the Investment Company Act, the Fund's Board of Directors shall
promptly call a meeting of shareholders for the purpose of voting upon the
question of removal of any director when requested in writing to do so by the
record holders of not less than 10 percent of the outstanding shares.
Additionally, the Investment Company Act requires shareholder votes for all
amendments to fundamental investment policies and restrictions and for all
investment advisory contracts and amendments thereto.
Upon issuance and sale in accordance with the terms of the Fund's Prospectus
and Statement of Additional Information, each Fund share will be fully paid and
non-assessable. Shares have no preemptive, subscription or conversion rights and
are redeemable as set forth under "How To Redeem Fund Shares" in the Prospectus.
To the knowledge of the Fund, no person beneficially owned 5% or more of the
Fund's common shares as of December 5, 1995.
FINANCIAL AND OTHER INFORMATION
The audited financial statements and supplementary schedules for the Fund
for its fiscal year ended December 31, 1994, are attached to and included with
this Statement of Additional Information
B-17
<PAGE>
in reliance upon the report of the Fund's independent auditors (which report
accompanies such audited financial statements and supplementary schedules)
pursuant to the authority of said firm as experts in accounting and auditing.
The unaudited semi-annual report to Fund shareholders, for the six-month period
ended June 30, 1995, also is attached to and included with this Statement of
Additional Information.
The Prospectus and this Statement of Additional Information do not contain
all the information included in the Funds Registration Statement filed with the
SEC under the Securities Act of 1933 and the Investment Company Act (the
"Registration Statement") with respect to the securities offered by the
Prospectus and this Statement of Additional Information. Certain portions of the
Registration Statement have been omitted from the Prospectus and this Statement
of Additional Information pursuant to the rules and regulations of the SEC. The
Registration Statement including the exhibits filed therewith may be examined at
the office of the SEC in Washington, D.C.
Statements contained in the Prospectus or in this Statement of Additional
Information as to any contract or other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement of which the
Prospectus and this Statement of Additional Information form a part, each such
statement being qualified in all respects by such reference.
B-18
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
and Shareholders:
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments in securities, of The Jundt Growth Fund,
Inc. as of December 31, 1994, and the related statement of operations for the
six-month period then ended, the statements of changes in net assets for the
six-month period ended December 31, 1994 and the year ended June 30, 1994 and
the financial highlights for the six-month period ended December 31, 1994, each
of the years in the two-year period ended June 30, 1994 and the period from
September 3, 1991 (commencement of operations) to June 30, 1992. These financial
statements and the financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and the financial highlights. Investment securities held in custody
are confirmed to us by the custodian. As to securities purchased or sold but not
received or delivered, we request confirmations from brokers, and where replies
are not received, we carry out other appropriate auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of The Jundt Growth Fund, Inc. as of December 31, 1994, and the results
of its operations for the six-month period then ended, the changes in its net
assets for the six-month period ended December 31, 1994 and the year ended June
30, 1994 and the financial highlights for the periods stated in the first
paragraph above, in conformity with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 3, 1995
F-1
<PAGE>
JUNDT GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
AS OF DECEMBER 31, 1994
<TABLE>
<S> <C>
ASSETS
Investment in securities, at market value (note 2) including repurchase
agreement of $3,746,000 (identified cost: $180,791,146)..................... $ 224,551,589
Receivable for investment securities sold.................................... 1,544,886
Dividends and accrued interest receivable.................................... 227,521
Prepaid expenses............................................................. 25,028
-------------
Total assets............................................................. 226,349,024
-------------
LIABILITIES
Payable for investment securities purchased.................................. 2,680,742
Accrued investment management fee (note 4)................................... 177,095
Accrued administrative fee (note 4).......................................... 44,274
Accrued expenses and other liabilities....................................... 130,203
-------------
Total liabilities........................................................ 3,032,314
-------------
Net assets applicable to outstanding capital stock........................... $ 223,316,710
-------------
-------------
Represented by:
Common stock -- authorized 1,000,000,000 shares of $.01 par value;
outstanding, 14,940,097 shares............................................ $ 149,401
Additional paid-in capital (note 2)........................................ 182,258,675
Accumulated net realized loss on investments............................... (2,851,809)
Unrealized appreciation of investments..................................... 43,760,443
-------------
Total, representing net assets applicable to outstanding capital stock....... $ 223,316,710
-------------
-------------
NET ASSET VALUE
Net asset value per share of outstanding capital stock....................... $14.95
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
JUNDT GROWTH FUND, INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD FROM
JULY 1, 1994
TO DECEMBER 31, 1994
----------------------
<S> <C>
INCOME
Interest................................................................................ $ 330,230
Dividends (net of foreign withholding taxes of $16,075)................................. 330,868
------------
661,098
------------
EXPENSES (NOTE 4)
Investment management fee............................................................... 1,092,907
Administrative fee...................................................................... 273,227
Audit and legal fees.................................................................... 118,619
Reports to shareholders................................................................. 70,731
Custodian and transfer agent fees....................................................... 52,503
Directors' fees......................................................................... 38,091
Listing fees............................................................................ 8,560
Other expenses.......................................................................... 85,553
------------
Total expenses........................................................................ 1,740,191
------------
Investment loss, net.................................................................... (1,079,093)
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments (note 3)............................................... (2,518,189)
Net change in unrealized appreciation on investments.................................... 29,802,048
------------
Net gain on investments............................................................... 27,283,859
------------
Net increase in net assets resulting from operations.................................... $ 26,204,766
------------
------------
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
JUNDT GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD FROM
JULY 1, 1994 TO YEAR ENDED
DECEMBER 31, 1994 JUNE 30, 1994
----------------- -------------
<S> <C> <C>
OPERATIONS
Investment loss -- net..................................................... $ (1,079,093 ) $ (1,636,002)
Net realized gain (loss) on investments.................................... (2,518,189 ) 36,803,013
Net change in unrealized appreciation on investments....................... 29,802,048 (47,185,561)
----------------- -------------
Net increase (decrease) in net assets resulting from operations............ 26,204,766 (12,018,550)
----------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
Realized capital gains -- net.............................................. -- (7,768,534)
Tax return of capital...................................................... (5,079,628 ) (5,528,153)
----------------- -------------
Total distributions to shareholders........................................ (5,079,628 ) (13,296,687)
----------------- -------------
COMMON STOCK TRANSACTIONS
Cost from purchase of 16,439,314 shares in connection with Fund's tender
offer (note 5)............................................................ -- (246,260,924)
----------------- -------------
Decrease in net assets from common stock transactions, (16,439,314)
shares.................................................................... -- (246,260,924)
----------------- -------------
Total increase (decrease) in net assets.................................... 21,125,138 (271,576,161)
----------------- -------------
NET ASSETS
Net assets at beginning of period.......................................... 202,191,572 473,767,733
----------------- -------------
Net assets at end of period................................................ $ 223,316,710 $ 202,191,572
----------------- -------------
----------------- -------------
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
1. ORGANIZATION
The Jundt Growth Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 (as amended) as a diversified, closed-end management
investment company. The Fund's investment objective is to provide long-term
capital appreciation by investing primarily in a diversified portfolio of equity
securities of companies that are believed by Jundt Associates, Inc. (the
"Adviser") to have significant potential for growth in revenue and earnings.
On May 24, 1994, the Fund's Board of Directors approved a change in the
Fund's fiscal and taxable year-end from June 30 to December 31, effective
December 31, 1994.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are as follows:
INVESTMENT IN SECURITIES
Investments in securities traded on U.S. securities exchanges or included in
a national market system or on other over-the-counter markets, are valued at the
last quoted sales price; other securities for which market quotations are not
readily available are valued at fair value according to methods selected in good
faith by the Board of Directors. Short-term securities with maturities of fewer
than 60 days when acquired, or which subsequently are within 60 days of
maturity, are valued at amortized cost which approximates market value.
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the identified
cost basis. Dividend income is recognized on the ex-dividend date. Interest
income, including level-yield amortization of discount, is accrued daily.
FEDERAL TAXES
The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and also intends to distribute
all of its investment company taxable income to shareholders. Therefore, no
income tax provision is required. In addition, on a calendar year basis, the
Fund will make sufficient distributions of its net investment income and
realized gains, if any, to avoid the payment of any federal excise taxes. For
federal income tax purposes, the Fund had a loss carryforward of $2,502,498 at
December 31, 1994, which, if not offset by subsequent capital gains, will expire
in 2002.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily due to wash sales and net
operating losses. The character of distributions made during the year from net
investment income or net realized gains, if any, may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year the income or realized gains (losses) were recorded by the
Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, accumulated net investment loss has been increased by
$1,079,093 resulting in a reclassification adjustment to decrease
paid-in-capital by $1,079,093.
F-5
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
REPURCHASE AGREEMENTS
The Fund invests in U.S. Government securities pursuant to repurchase
agreements with a member bank of the Federal Reserve System or a primary dealer
in U.S. Government securities. Under such agreements, the bank or primary dealer
agrees to repurchase the security at a mutually agreed upon time and price. The
Fund takes possession of the underlying securities, marks to market such
securities daily and, if necessary, receives additional securities to ensure
that the contract is adequately collateralized.
DISTRIBUTIONS TO SHAREHOLDERS
Prior to May 24, 1994, the Fund's policy was to distribute annually to
shareholders all or a portion of the Fund's net investment income, if any, and
all net realized long- or short-term capital gains, if any. Pursuant to this
dividend policy, the Fund periodically paid dividends from net investment income
and realized capital gains, if any, at least annually.
On May 24, 1994, the Fund adopted a new dividend policy whereby, commencing
with the distribution payable July 1, 1994, the Fund intended to pay regular
quarterly dividends, when, as and if declared by the Board of Directors, in an
aggregate amount equal to approximately 10% (2.5% quarterly) of net asset value
per share per year. The Fund intended to pay the dividends from some combination
of net investment income, net short-term capital gains, and capital. In
connection with the new dividend policy, the Fund intended to retain all net
long-term capital gains and pay any resulting federal income taxes. The
difference between the net long-term capital gains retained and the resulting
income taxes paid would have been available as an increase in the cost basis of
Fund shares for shareholders of record as of the last day of the fiscal year.
Pursuant to this policy, the Fund made distributions from capital on July 1 and
September 30, 1994. On October 26, 1994, the Board of Directors reversed the new
dividend policy, which had been adopted in an effort to reduce the discount to
net asset value at which the Fund's shares trade, and reverted to the Fund's
historical dividend policy described above, which was in effect prior to May 24,
1994.
Distributions are recorded as of the close of business on the ex-dividend
date. Such distributions are payable in cash or, pursuant to the Fund's Dividend
Reinvestment Plan, reinvested in additional shares of the Fund's Common Stock.
Under the Plan, Fund shares will be purchased in the open market or issued from
previously authorized shares of Common Stock of the Fund.
3. INVESTMENT SECURITY TRANSACTIONS
Purchases of securities and proceeds from sales, other than temporary
investments in short-term securities, for the period ended December 31, 1994
were $45,145,664 and $39,456,230, respectively.
F-6
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
4. FEES AND EXPENSES
The Fund has entered into the following agreements with the Adviser and
Princeton Administrators, L.P. (the Administrator):
The investment advisory agreement provides the Adviser with a monthly
investment management fee calculated at the annualized rate of 1% of the Fund's
average weekly net assets.
The administration agreement provides the Administrator with a monthly
administrative fee in an amount equal to an annualized rate of 0.25% of the
Fund's average weekly net assets not exceeding $300,000,000 and 0.20% of the
average weekly net assets in excess of $300,000,000, subject to an annual
minimum fee of $150,000. For its fee, the Administrator will provide certain
administrative, accounting, clerical and record keeping services for the Fund.
During the period ended December 31, 1994, the Fund paid brokerage
commissions of $56,048 and entered into principal transactions (excluding
short-term securities) aggregating $2,592,605 with an affiliated company of the
Administrator.
In addition to the advisory fee and the administrative fee, the Fund is
responsible for paying most other operating expenses, including directors fees
and expenses, custodian fees, registration fees, printing and shareholder
reports, transfer agent fees and expenses, legal, auditing and accounting
services, insurance and other miscellaneous expenses.
Legal fees of $119,123 for the period ended December 31, 1994 were paid to a
law firm of which the secretary of the Fund is a partner.
5. COMMON STOCK TRANSACTIONS
On July 14, 1993, the Fund's Board of Directors approved a Tender Offer to
shareholders to purchase any or all of the Fund's issued and outstanding shares
of Common Stock. The purchase price was equal to the net asset value per share
at the close of business on August 13, 1993. As a result of the Tender Offer,
the Fund purchased 16,439,314 shares for a total of $246,260,924.
On September 22, 1994, the Fund's Board of Directors approved a Tender Offer
to shareholders to purchase any or all of the Fund's issued and outstanding
shares of Common Stock. The Tender Offer included a condition that permitted the
Fund to terminate the offer without purchase in the event that the aggregate
purchase price of shares tendered exceeded $50 million. 7,208,721 shares having
an aggregate purchase price of $109,067,949 at the net asset value per share at
the close of business on October 26, 1994, were tendered. On October 26, 1994,
the Fund's Board of Directors terminated the Tender Offer without purchase.
F-7
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1994
6. FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock outstanding throughout each
period and selected supplemental and ratio information for each period indicated
are as follows:
<TABLE>
<CAPTION>
PERIOD
FROM PERIOD
7/01/94 YEAR ENDED YEAR ENDED FROM 9/3/91*
TO 12/31/94 6/30/94 6/30/93 TO 6/30/92
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
PER SHARE DATA
Net asset value, beginning of period.............. $ 13.53 $ 15.10 $ 13.78 $ 14.07
----------- ----------- ----------- ------------
Operations:
Investment income (loss) -- net................. (0.07) (0.11) (0.05) 0.13
Net realized and unrealized gain (loss) on
investments.................................... 1.83 (0.57) 1.38 (0.30)
----------- ----------- ----------- ------------
Total from operations............................. 1.76 (0.68) 1.33 (0.17)
Distributions to shareholders:
From investment income -- net................... -- -- (0.01) (0.12)
From realized capital gains -- net.............. -- (0.52) -- --
Tax return of capital........................... (0.34) (0.37) -- --
----------- ----------- ----------- ------------
Net asset value, end of period.................... $ 14.95 $ 13.53 $ 15.10 $ 13.78
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
Per share market value, end of period............. $ 13.625 $ 12.625 $ 14.50 $ 13.25
----------- ----------- ----------- ------------
----------- ----------- ----------- ------------
Total investment return, market value**........... 10.43% (7.23)% 9.50% (10.98)%
Total investment return, net asset value+......... 13.06% (4.53)% 9.64% (1.30)%
Net assets at end of period (000's omitted)....... $223,317 $202,192 $473,768 $465,055
Ratio of expenses to average weekly net assets.... 1.58%++ 1.55% 1.40% 1.37%++
Ratio of net investment income (loss) to average
weekly net assets................................ (0.98)%++ (0.63)% (0.36)% 1.05%++
Portfolio turnover rate (excluding short-term
securities)...................................... %19 %70 %66 %20
</TABLE>
- ------------------------
* Commencement of operations.
** Total investment return, market value, is based on the change in market price
of a share during the period and assumes reinvestment of distributions at
actual prices pursuant to the Fund's dividend reinvestment plan.
+ Total investment return, net asset value, is based on the change in net asset
value of a share during the period and assumes reinvestment of distributions
at actual prices pursuant to the Fund's dividend reinvestment plan.
++ Adjusted to an annual basis.
F-8
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
DECEMBER 31, 1994
7. QUARTERLY DATA (UNAUDITED)
<TABLE>
<CAPTION>
NET REALIZED AND NET INCREASE (DECREASE)
NET INVESTMENT INCOME UNREALIZED GAIN (LOSS) IN NET ASSETS RESULTING
TOTAL (LOSS) ON INVESTMENTS FROM OPERATIONS DISTRIBUTIONS
INVESTMENT ----------------------- ------------------------ ------------------------ -------------
QUARTER ENDED INCOME AMOUNT PER SHARE AMOUNT PER SHARE AMOUNT PER SHARE AMOUNT
- --------------------- ----------- ------------ --------- ------------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 1992... $ 1,513,178 $ (79,589) $ 0.00 $ 13,820,675 $ 0.43 $ 13,741,086 $ 0.43 $ 0
December 31, 1992.... 778,022 (887,380) (0.03) 43,517,076 1.39 42,629,696 1.36 0
March 31, 1993....... 974,652 (715,387) (0.02) (20,603,929) (0.66) (21,319,316) (0.68) 0
June 30, 1993........ 1,568,580 25,156 0.00 6,850,149 0.22 6,875,305 0.22 (255,208)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
$ 4,834,432 $ (1,657,200) $ (0.05) $ 43,583,971 $ 1.38 $ 41,926,771 $ 1.33 $ (255,208)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
----------- ------------ --------- ------------- --------- ------------- --------- -------------
September 30, 1993... $ 1,011,172 $ (331,237) $ (0.02) $ 2,631,108 $ 0.30 $ 2,298,871 $ 0.28 $ 0
December 31, 1993.... 615,557 (233,644) (0.02) 2,560,235 0.18 2,327,591 0.16 (7,768,534)
March 31, 1994....... 220,911 (679,027) (0.04) (1,615,082) (0.12) (2,294,109) (0.16) 0
June 30, 1994........ 514,512 (392,094) (0.03) (13,958,809) (0.93) (14,350,903) (0.96) (5,528,153)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
$ 2,362,152 $ (1,636,002) $ (0.11) $ (10,382,548) $ (0.57) $ (12,018,550) $ (0.68) $ (13,296,687)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
----------- ------------ --------- ------------- --------- ------------- --------- -------------
September 30, 1994... $ 285,165 $ (541,313) $ (0.04) $ 30,101,853 $ 2.02 $ 29,560,540 $ 1.98 $ (5,079,628)
December 31, 1994.... 375,933 (537,780) (0.03) (2,817,994) (0.19) (3,355,774) (0.22) 0
----------- ------------ --------- ------------- --------- ------------- --------- -------------
$ 661,098 $ (1,079,093) $ (0.07) $ 27,283,859 $ 1.83 $ 26,204,766 $ 1.76 $ (5,079,628)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
----------- ------------ --------- ------------- --------- ------------- --------- -------------
<CAPTION>
QUARTER END
NET ASSET
QUARTER ENDED PER SHARE VALUE
- --------------------- --------- -----------
<S> <C> <C>
September 30, 1992... $ 0.00 $ 14.21
December 31, 1992.... 0.00 15.57
March 31, 1993....... 0.00 14.89
June 30, 1993........ (0.01) 15.10
---------
$ (0.01)
---------
---------
September 30, 1993... $ 0.00 $ 15.38
December 31, 1993.... (0.52) 15.02
March 31, 1994....... 0.00 14.86
June 30, 1994........ (0.37) 13.53
---------
$ (0.89)
---------
---------
September 30, 1994... $ (0.34) $ 15.17
December 31, 1994.... 0.00 14.95
---------
$ (0.34)
---------
---------
</TABLE>
F-9
<PAGE>
JUNDT GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
INDUSTRY NUMBER OF MARKET
DESCRIPTION AND ISSUE SHARES COST VALUE (A)
- ------------------------------------------------------------ --------- ------------- -------------
<S> <C> <C> <C>
COMMON STOCKS
COMMUNICATION EQUIPMENT (8.7%)
DSC Communications Corp. (b)................................ 86,000 $ 2,171,500 $ 3,085,250
LM Ericsson Telephone Co. (ADR)*............................ 134,600 6,619,531 7,419,825
Motorola, Inc. ............................................. 152,600 4,855,158 8,831,725
------------- -------------
13,646,189 19,336,800
------------- -------------
COMMUNICATION TRANSMISSION (16.8%)
Airtouch Communications, Inc. (b)........................... 267,400 6,349,275 7,788,025
Lin Broadcasting Corp. (b).................................. 60,400 4,405,994 8,063,400
Lin Television Corp. (b).................................... 30,200 399,803 679,500
Mobile Telecommunications Technologies Corp. (b)............ 144,700 3,118,667 2,821,650
Paging Network, Inc. (b).................................... 66,200 2,104,818 2,250,800
Rogers Cantel Mobile Communications, Inc. Class B (b)....... 164,600 4,396,557 4,799,127
Telephone & Data Systems, Inc. ............................. 49,800 2,064,108 2,297,025
Vodafone Group PLC (ADR)*................................... 263,900 6,021,880 8,873,637
------------- -------------
28,861,102 37,573,164
------------- -------------
COMPUTER EQUIPMENT (1.1%)
EMC Corp. (b)............................................... 107,500 1,834,835 2,324,688
------------- -------------
COMPUTER SERVICES (16.6%)
cisco Systems, Inc. (b)..................................... 64,000 2,251,224 2,244,000
Informix Corp. (b).......................................... 239,000 4,165,809 7,677,875
Microsoft Corp. (b)......................................... 148,200 6,333,756 9,058,725
Oracle Systems Corp. (b).................................... 187,700 2,211,545 8,282,262
Sybase, Inc. (b)............................................ 135,500 4,497,157 7,046,000
Wall Data, Inc. (b)......................................... 67,500 2,563,138 2,691,562
------------- -------------
22,022,629 37,000,424
------------- -------------
ELECTRONICS (5.6%)
Intel Corp. ................................................ 109,800 5,773,162 7,013,475
Sensormatic Electronics Corp. .............................. 153,650 4,485,905 5,531,400
------------- -------------
10,259,067 12,544,875
------------- -------------
</TABLE>
See accompanying notes to schedule of investments.
F-10
<PAGE>
JUNDT GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
INDUSTRY NUMBER OF MARKET
DESCRIPTION AND ISSUE SHARES COST VALUE (A)
- ------------------------------------------------------------ --------- ------------- -------------
COMMON STOCKS (CONTINUED)
<S> <C> <C> <C>
HEALTH CARE/MEDICAL DEVICES (10.8%)
Biogen, Inc. (b)............................................ 171,400 $ 7,007,643 $ 7,155,950
Oxford Health Plans, Inc. (b)............................... 91,200 4,978,685 7,227,600
Pyxis Corp. (b)............................................. 168,000 4,935,362 3,192,000
United Healthcare Corp. .................................... 145,700 5,894,654 6,574,713
------------- -------------
22,816,344 24,150,263
------------- -------------
INTERACTIVE MEDIA (5.9%)
CUC International, Inc. (b)................................. 113,400 3,290,373 3,798,900
Coventry Corp. (b).......................................... 129,100 2,837,311 3,162,950
General Instrument Corp. (b)................................ 132,300 3,360,790 3,969,000
HealthSource, Inc. (b)...................................... 53,700 2,006,172 2,194,988
------------- -------------
11,494,646 13,125,838
------------- -------------
MISCELLANEOUS (3.0%)
H & R Block, Inc. .......................................... 182,600 7,925,401 6,779,025
------------- -------------
RESTAURANTS (5.6%)
Brinker International, Inc. (b)............................. 203,212 3,482,224 3,683,217
Boston Chicken, Inc. (b).................................... 143,200 2,831,105 2,497,050
Cracker Barrel Old Country Store, Inc. ..................... 178,800 5,046,031 3,285,450
Starbucks Corp. (b)......................................... 108,000 3,035,132 2,970,000
------------- -------------
14,394,492 12,435,717
------------- -------------
RETAIL (23.0%)
AutoZone, Inc. (b).......................................... 213,500 3,598,321 5,177,375
Best Buy Company, Inc. (b).................................. 216,200 5,015,839 6,756,250
Home Depot, Inc. ........................................... 98,100 4,241,922 4,512,600
Lowe's Companies, Inc. ..................................... 168,300 2,935,534 5,848,425
OfficeMax, Inc. (b)......................................... 178,900 4,329,312 4,740,850
Office Depot, Inc. (b)...................................... 192,675 2,612,893 4,624,200
PetSmart, Inc. (b).......................................... 147,900 4,273,382 5,102,550
Staples, Inc. (b)........................................... 365,850 5,407,513 9,054,788
Wal-Mart Stores, Inc. ...................................... 264,300 6,850,728 5,616,375
------------- -------------
39,265,444 51,433,413
------------- -------------
TOTAL COMMON STOCKS (97.1%)................................. 172,520,149 216,704,207
------------- -------------
</TABLE>
See accompanying notes to schedule of investments.
F-11
<PAGE>
JUNDT GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS (CONCLUDED)
DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL MARKET
ISSUE AMOUNT COST VALUE (A)
- ---------------------------------------------------------------------- ---------- ----------- -----------
<S> <C> <C> <C>
CONVERTIBLE CORPORATE BONDS (1.8%)
Home Depot, Inc., 4.50%, 2/15/1997.................................... $3,390,000 $ 4,508,565 $ 4,084,950
----------- -----------
TOTAL CONVERTIBLE CORPORATE BONDS (1.8%).............................. 4,508,565 4,084,950
----------- -----------
SHORT-TERM SECURITIES
REPURCHASE AGREEMENT (1.7%) (NOTE 2)
Repurchase agreement with Merrill Lynch Government Securities Inc.,
5.10% acquired on 12/30/1994 and due 1/03/1995 with accrued interest
of $2,123 (collateralized by $3,975,718 including accrued interest,
U.S. Treasury Note 6.50%, 4/30/1999)................................. 3,746,000 3,746,000 3,746,000
PRIME VALUE FUNDS (0.0%)
Investment in Prime Value Funds Treasury Fund......................... 16,432 16,432 16,432
----------- -----------
TOTAL SHORT-TERM SECURITIES (1.7%).................................... 3,762,432 3,762,432
----------- -----------
Total investments in securities (100.6%).............................. $180,791,146(c) 224,551,589
-----------
Liabilities in excess of other assets (-0.6%)......................... (1,234,879)
-----------
NET ASSETS (100.0%)................................................... $223,316,710
-----------
-----------
</TABLE>
- ------------------------
Notes to Schedule of Investments:
* American Depository Receipt (ADR).
(a) Securities are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) Cost for federal income tax purposes at December 31, 1994 was $181,140,457.
The aggregate gross unrealized appreciation and depreciation of investments
in securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation........... $50,648,333
Gross unrealized depreciation........... (7,237,201)
-----------
Net unrealized appreciation............. $43,411,132
-----------
-----------
</TABLE>
F-12
<PAGE>
JUNDT GROWTH FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 1995
(UNAUDITED)
ASSETS
<TABLE>
<S> <C>
Investment in securities, at market value (note 2) including repurchase
agreement of $8,923,000 (identified cost: $195,025,369)..................... $ 245,796,636
Dividends and accrued interest receivable.................................... 112,942
Prepaid expenses............................................................. 139,234
-------------
Total assets............................................................. 246,048,812
-------------
LIABILITIES
Payable for investment securities purchased.................................. 695,571
Accrued investment management fee (note 4)................................... 200,520
Accrued administrative fee (note 4).......................................... 50,130
Accrued expenses and other liabilities....................................... 144,636
-------------
Total liabilities........................................................ 1,090,857
-------------
Net assets applicable to outstanding capital stock........................... $ 244,957,955
-------------
-------------
Represented by:
Common stock -- authorized 1,000,000,000 shares of $.01 par value;
outstanding, 14,940,097 shares............................................ $ 149,401
Additional paid-in capital (note 2)........................................ 182,258,675
Net investment loss........................................................ (804,024)
Accumulated net realized gain on investments............................... 12,582,636
Unrealized appreciation of investments..................................... 50,771,267
-------------
Total, representing net assets applicable to outstanding capital stock....... $ 244,957,955
-------------
-------------
NET ASSET VALUE
Net asset value per share of outstanding capital stock....................... $16.40
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
F-13
<PAGE>
JUNDT GROWTH FUND, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
JANUARY 1, 1995
TO JUNE 30,
1995
---------------
<S> <C>
INCOME
Interest....................................................................................... $ 487,868
Dividends (net of foreign withholding taxes of $26,755)........................................ 345,987
---------------
833,855
---------------
EXPENSES (NOTE 4)
Investment management fee...................................................................... 1,139,243
Administrative fee............................................................................. 284,809
Custodian and transfer agent fees.............................................................. 68,171
Directors' fees................................................................................ 42,334
Reports to shareholders........................................................................ 38,574
Audit and legal fees........................................................................... 32,856
Listing fees................................................................................... 12,030
Other expenses................................................................................. 19,862
---------------
Total expenses............................................................................... 1,637,879
---------------
Investment loss, net........................................................................... (804,024)
---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments (note 3)...................................................... 15,434,445
Net change in unrealized appreciation on investments........................................... 7,010,824
---------------
Net gain on investments...................................................................... 22,445,269
---------------
Net increase in net assets resulting from operations........................................... $ 21,641,245
---------------
---------------
</TABLE>
See accompanying notes to financial statements.
F-14
<PAGE>
JUNDT GROWTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JANUARY 1, 1995 JULY 1, 1994 TO
TO JUNE 30, 1995 DEC. 31, 1994
---------------- ----------------
(UNAUDITED)
<S> <C> <C>
OPERATIONS
Investment loss -- net...................................................... $ (804,024) $ (1,079,093)
Net realized gain (loss) on investments..................................... 15,434,445 (2,518,189)
Net change in unrealized appreciation on investments........................ 7,010,824 29,802,048
---------------- ----------------
Net increase in net assets resulting from operations........................ 21,641,245 26,204,766
---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS
Return of capital........................................................... -- (5,079,628)
---------------- ----------------
Total increase in net assets................................................ 21,641,245 21,125,138
NET ASSETS
Net assets at beginning of period........................................... 223,316,710 202,191,572
---------------- ----------------
Net assets at end of period................................................. $ 244,957,955 $ 223,316,710
---------------- ----------------
---------------- ----------------
</TABLE>
See accompanying notes to financial statements.
F-15
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS: (UNAUDITED)
JUNE 30, 1995
1. ORGANIZATION
The Jundt Growth Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 (as amended) as a diversified, closed-end management
investment company. See, however, Note 5. The Fund's investment objective is to
provide long-term capital appreciation by investing primarily in a diversified
portfolio of equity securities of companies that are believed by Jundt
Associates, Inc. (the "Adviser") to have significant potential for growth in
revenue and earnings.
On May 24, 1994, the Fund's Board of Directors approved a change in the
Fund's fiscal and taxable year-end from June 30 to December 31, effective
December 31, 1994.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Fund are as follows:
INVESTMENTS IN SECURITIES
Investments in securities traded on U.S. securities exchanges or included in
a national market system or on over-the-counter markets, are valued at the last
quoted sales price; other securities for which market quotations are not readily
available are valued at fair value according to methods selected in good faith
by the Board of Directors. Short-term securities with maturities of fewer than
60 days when acquired, or which subsequently are within 60 days of maturity, are
valued at amortized cost which approximates market value.
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses are calculated on the identified
cost basis. Dividend income is recognized on the ex-dividend date. Interest
income, including level-yield amortization of discount, is accrued daily.
FEDERAL TAXES
The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and also intends to distribute
all of its investment company taxable income to shareholders. Therefore, no
income tax provision is required. In addition, on a calendar year basis, the
Fund will make sufficient distributions of its net investment income and
realized gains, if any, to avoid the payment of any federal excise taxes. For
federal income tax purposes, the Fund had a loss carryforward of $2,502,498 at
December 31, 1994, which, if not offset by subsequent capital gains, will expire
in 2002.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily due to wash sales and net
operating losses. The character of distributions made during the year from net
investment income or net realized gains, if any, may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year the income or realized gains (losses) were recorded by the
Fund.
REPURCHASE AGREEMENTS
The Fund invests in U.S. Government securities pursuant to repurchase
agreements with a member bank of the Federal Reserve System or a primary dealer
in U.S. Government securities. Under such agreements, the bank or primary dealer
agrees to repurchase the security at a mutually agreed upon time and price. The
Fund takes possession of the underlying securities, marks to market
F-16
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS: (UNAUDITED)(CONTINUED)
JUNE 30, 1995
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
such securities daily and, if necessary, receives additional securities to
ensure that the contract is adequately collateralized.
DISTRIBUTIONS TO SHAREHOLDERS
The Fund's policy is to distribute annually to shareholders all or a portion
of the Fund's net investment income, if any, and all net realized long- or
short-term capital gains, if any.
Distributions are recorded as of the close of business on the ex-dividend
date. Such distributions are payable in cash or, pursuant to the Fund's Dividend
Reinvestment Plan, reinvested in additional shares of the Fund's Common Stock.
Under the Plan, Fund shares will be purchased in the open market or issued from
previously authorized shares of Common Stock of the Fund.
3. INVESTMENT SECURITY TRANSACTIONS
Purchases of securities and proceeds from sales, other than temporary
investments in short-term securities, for the period ended June 30, 1995 were
$39,011,075 and $80,221,538, respectively.
4. FEES AND EXPENSES
The Fund has entered into the following agreements with the Adviser and
Princeton Administrators, L.P. (the Administrator):
The investment advisory agreement provides the Adviser with a monthly
investment management fee calculated at the annualized rate of 1% of the Fund's
average weekly net assets.
The administration agreement provides the Administrator with a monthly
administrative fee in an amount equal to an annualized rate of 0.25% of the
Fund's average weekly net assets not exceeding $300,000,000 and 0.20% of the
average weekly net assets in excess of $300,000,000, subject to an annual
minimum fee of $150,000. For its fee, the Administrator will provide certain
administrative, accounting, clerical and record keeping services for the Fund.
During the period ended June 30, 1995, the Fund paid brokerage commissions
of $100,656 and entered into principal transactions (excluding short-term
securities) aggregating $3,306,850 with an affiliated company of the
Administrator.
In addition to the advisory fee and the administrative fee, the Fund is
responsible for paying most other operating expenses, including directors' fees
and expenses, custodian fees, registration fees, printing and shareholder
reports, transfer agent fees and expenses, legal, auditing and accounting
services, insurance and other miscellaneous expenses.
Legal fees of $135,235 (of which $119,280 are a result of the proposed
conversion (see Note 5)) for the period ended June 30, 1995 were paid to a law
firm of which the secretary of the Fund is a partner.
5. SUBSEQUENT EVENTS
On July 21, 1995, shareholders approved a proposal to convert the Fund to an
open-end investment company. The Fund presently expects the conversion to be
effected during the fourth quarter of 1995.
F-17
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS: (UNAUDITED)(CONTINUED)
JUNE 30, 1995
6. FINANCIAL HIGHLIGHTS
Per share data for a share of capital stock outstanding throughout each
period and selected supplemental and ratio information for each period indicated
are as follows:
<TABLE>
<CAPTION>
PERIOD PERIOD PERIOD
FROM 1/01/95 FROM 7/01/94 YEAR ENDED YEAR ENDED FROM 9/3/91*
PER SHARE DATA TO 6/30/95 TO 12/31/94 6/30/94 6/30/93 TO 6/30/92
- -------------------------------------------------- ------------ ------------ ---------- ---------- ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $14.95 $13.53 $15.10 $13.78 $14.07
------------ ------------ ---------- ---------- ------------
Operations:
Investment income (loss) -- net................. (0.05) (0.07) (0.11) (0.05) 0.13
Net realized and unrealized gain (loss) on
investments.................................... 1.50 1.83 (0.57) 1.38 (0.30)
------------ ------------ ---------- ---------- ------------
Total from operations............................. 1.45 1.76 (0.68) 1.33 (0.17)
Distributions to shareholders:
From investment income -- net................... -- -- -- (0.01) (0.12)
From realized capital gains -- net.............. -- -- (0.52) -- --
Return of capital............................... -- (0.34) (0.37) -- --
------------ ------------ ---------- ---------- ------------
Net asset value, end of period.................... $16.40 $14.95 $13.53 $15.10 $13.78
------------ ------------ ---------- ---------- ------------
------------ ------------ ---------- ---------- ------------
Per share market value, end of period............. $15.625 $13.625 $12.625 $14.50 $13.25
------------ ------------ ---------- ---------- ------------
------------ ------------ ---------- ---------- ------------
Total investment return, market value**........... 14.68% 10.43% (7.23)% 9.50% (10.98)%
Total investment return, net asset value+......... 9.70% 13.06% (4.53)% 9.64% (1.30)%
Net assets at end of period (000's omitted)....... $ 244,958 $ 223,317 $ 202,192 $ 473,768 $465,055
Ratio of expenses to average weekly net assets.... 1.45%++ 1.58%++ 1.55% 1.40% 1.37%++
Ratio of net investment income (loss) to average
weekly net assets................................ (0.71)%++ (0.98)%++ (0.63)% (0.36)% 1.05%++
Portfolio turnover rate (excluding short-term
securities)...................................... 19% 19% 70% 66% 20%
</TABLE>
- ------------------------
* Commencement of operations.
** Total investment return, market value, is based on the change in market
price of a share during the period and assumes reinvestment of distributions
at actual prices pursuant to the Fund's dividend reinvestment plan.
+ Total investment return, net asset value, is based on the change in net
asset value of a share during the period and assumes reinvestment of
distributions at actual prices pursuant to the Fund's dividend reinvestment
plan.
++ Adjusted to an annual basis.
F-18
<PAGE>
JUNDT GROWTH FUND, INC.
NOTES TO FINANCIAL STATEMENTS: (UNAUDITED) (CONCLUDED)
JUNE 30, 1995
7. QUARTERLY DATA
<TABLE>
<CAPTION>
NET REALIZED NET INCREASE
AND UNREALIZED (DECREASE) IN NET
NET INVESTMENT GAIN (LOSS) ON ASSETS RESULTING
INCOME (LOSS) INVESTMENTS FROM OPERATIONS DISTRIBUTIONS
TOTAL ----------------------- ------------------------ ------------------------ -------------
INVESTMENT PER PER PER
QUARTER ENDED INCOME AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE AMOUNT
- ------------------------- ----------- ------------ --------- ------------- --------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 1992....... $ 1,513,178 $ (79,589) $ 0.00 $ 13,820,675 $ 0.43 $ 13,741,086 $ 0.43 $ 0
December 31, 1992........ 778,022 (887,380) (0.03) 43,517,076 1.39 42,629,696 1.36 0
March 31, 1993........... 974,652 (715,387) (0.02) (20,603,929) (0.66) (21,319,316) (0.68) 0
June 30, 1993............ 1,568,580 25,156 0.00 6,850,149 0.22 6,875,305 0.22 (255,208)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
$ 4,834,432 $ (1,657,200) $ (0.05) $ 43,583,971 $ 1.38 $ 41,926,771 $ 1.33 $ (255,208)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
----------- ------------ --------- ------------- --------- ------------- --------- -------------
September 30, 1993....... $ 1,011,172 $ (331,237) $ (0.02) $ 2,631,108 $ 0.30 $ 2,298,871 $ 0.28 $ 0
December 31, 1993........ 615,557 (233,644) (0.02) 2,560,235 0.18 2,327,591 0.16 (7,768,534)
March 31, 1994........... 220,911 (679,027) (0.04) (1,615,082) (0.12) (2,294,109) (0.16) 0
June 30, 1994............ 514,512 (392,094) (0.03) (13,958,809) (0.93) (14,350,903) (0.96) (5,528,153)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
$ 2,362,152 $ (1,636,002) $ (0.11) $ (10,382,548) $ (0.57) $ (12,018,550) $ (0.68) $ (13,296,687)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
----------- ------------ --------- ------------- --------- ------------- --------- -------------
September 30, 1994....... $ 285,165 $ (541,313) $ (0.04) $ 30,101,853 $ 2.02 $ 29,560,540 $ 1.98 $ (5,079,628)
December 31, 1994........ 375,933 (537,780) (0.03) (2,817,994) (0.19) (3,355,774) (0.22) 0
----------- ------------ --------- ------------- --------- ------------- --------- -------------
$ 661,098 $ (1,079,093) $ (0.07) $ 27,283,859 $ 1.83 $ 26,204,766 $ 1.76 $ (5,079,628)
----------- ------------ --------- ------------- --------- ------------- --------- -------------
----------- ------------ --------- ------------- --------- ------------- --------- -------------
March 31, 1995........... $ 220,953 $ (604,568) $ (0.04) $ 6,321,167 $ 0.42 $ 5,716,599 $ 0.38 $ 0
June 30, 1995............ 612,902 (199,456) (0.01) 16,124,102 1.08 15,924,646 1.07 0
----------- ------------ --------- ------------- --------- ------------- --------- -------------
$ 833,855 $ (804,024) $ (0.05) $ 22,445,269 $ 1.50 $ 21,641,245 $ 1.45 $ 0
----------- ------------ --------- ------------- --------- ------------- --------- -------------
----------- ------------ --------- ------------- --------- ------------- --------- -------------
<CAPTION>
QUARTER
END
NET
PER ASSET
QUARTER ENDED SHARE VALUE
- ------------------------- --------- -----------
<S> <C> <C>
September 30, 1992....... $ 0.00 $ 14.21
December 31, 1992........ 0.00 15.57
March 31, 1993........... 0.00 14.89
June 30, 1993............ (0.01) 15.10
---------
$ (0.01)
---------
---------
September 30, 1993....... $ 0.00 $ 15.38
December 31, 1993........ (0.52) 15.02
March 31, 1994........... 0.00 14.86
June 30, 1994............ (0.37) 13.53
---------
$ (0.89)
---------
---------
September 30, 1994....... $ (0.34) $ 15.17
December 31, 1994........ 0.00 14.95
---------
$ (0.34)
---------
---------
March 31, 1995........... $ 0.00 $ 15.33
June 30, 1995............ 0.00 16.40
---------
$ 0.00
---------
---------
</TABLE>
F-19
<PAGE>
JUNDT GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED)
JUNE 30, 1995
<TABLE>
<CAPTION>
INDUSTRY NUMBER MARKET
DESCRIPTION AND ISSUE OF SHARES COST VALUE (A)
- ---------------------------------------------------------------------- --------- ----------- -----------
<S> <C> <C> <C>
COMMON STOCKS
COMMUNICATION EQUIPMENT (9.2%)
DSC Communications Corp. (b).......................................... 122,500 $ 4,183,438 $ 5,696,250
LM Ericsson Telephone Co. (ADR)*...................................... 372,400 4,374,664 7,448,000
Motorola, Inc......................................................... 97,800 4,655,356 6,564,825
Nokia Corp. (ADR)*.................................................... 47,800 2,399,624 2,850,075
----------- -----------
15,613,082 22,559,150
----------- -----------
COMMUNICATION TRANSMISSION (16.1%)
Airtouch Communications, Inc. (b)..................................... 267,400 6,349,275 7,620,900
Lin Broadcasting Corp. (b)............................................ 37,900 2,756,594 4,794,350
Mobile Telecommunications Technologies Corp. (b)...................... 144,700 3,118,667 3,961,162
Paging Network, Inc. (b).............................................. 77,900 2,447,792 2,668,075
Rogers Cantel Mobile Communications, Inc. Class B (b)................. 97,000 2,593,057 2,303,750
Telephone & Data Systems, Inc......................................... 119,100 4,775,102 4,332,262
Vodafone Group PLC (ADR)*............................................. 263,900 6,021,880 9,995,212
WorldCom, Inc. (b).................................................... 141,900 3,723,062 3,831,300
----------- -----------
31,785,429 39,507,011
----------- -----------
COMPUTER SERVICES/SOFTWARE (12.3%)
Cisco Systems, Inc. (b)............................................... 64,000 2,251,224 3,236,000
Informix Corp. (b).................................................... 317,600 2,827,398 8,059,100
Microsoft Corp. (b)................................................... 95,900 3,946,332 8,666,962
Oracle Systems Corp. (b).............................................. 205,450 1,676,740 7,935,506
3Com Corp............................................................. 33,800 2,054,101 2,264,600
----------- -----------
12,755,795 30,162,168
----------- -----------
DRUGS--ETHICAL & BIOTECHNOLOGY (3.2%)
Biogen, Inc. (b)...................................................... 173,400 7,081,977 7,716,300
----------- -----------
ELECTRONICS (3.8%)
Intel Corp............................................................ 51,100 1,533,326 3,235,269
Sensormatic Electronics Corp.......................................... 167,750 4,934,192 5,955,125
----------- -----------
6,467,518 9,190,394
----------- -----------
</TABLE>
See accompanying notes to schedule of investments.
F-20
<PAGE>
JUNDT GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1995
<TABLE>
<CAPTION>
INDUSTRY NUMBER MARKET
DESCRIPTION AND ISSUE OF SHARES COST VALUE (A)
- -------------------------------------------------- --------- ------------ ------------
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTH CARE/MEDICAL DEVICES (11.5%)
Coventry Corp. (b)................................ 130,600 $ 2,890,076 $ 1,844,725
HealthSource Inc. (b)............................. 127,400 4,886,124 4,459,000
Medtronic Inc..................................... 33,100 2,460,342 2,552,837
Oxford Health Plans, Inc. (b)..................... 151,000 4,484,174 7,134,750
Pyxis Corp. (b)................................... 204,700 5,762,680 4,631,338
United Healthcare Corp............................ 180,500 7,463,693 7,468,188
------------ ------------
27,947,089 28,090,838
------------ ------------
INTERACTIVE MEDIA (4.0%)
CUC International, Inc. (b)....................... 113,400 3,290,373 4,762,800
General Instrument Corp. (b)...................... 132,300 3,360,790 5,077,013
------------ ------------
6,651,163 9,839,813
------------ ------------
MISCELLANEOUS (1.7%)
H & R Block, Inc.................................. 99,800 4,097,053 4,104,275
------------ ------------
RESTAURANTS (5.8%)
Boston Chicken, Inc. (b).......................... 205,900 4,065,806 4,980,206
Cracker Barrel Old Country Store, Inc............. 136,500 4,001,085 2,823,844
Starbucks Corp. (b)............................... 181,400 4,772,232 6,462,375
------------ ------------
12,839,123 14,266,425
------------ ------------
RETAIL (14.9%)
AutoZone, Inc. (b)................................ 213,500 3,598,321 5,364,188
Home Depot, Inc................................... 157,483 7,315,543 6,397,747
Lowe's Companies, Inc............................. 168,300 2,935,533 5,027,963
Office Depot, Inc. (b)............................ 146,475 2,010,136 4,119,609
OfficeMax, Inc. (b)............................... 144,900 3,577,346 4,039,088
PetSmart, Inc. (b)................................ 187,050 3,589,296 5,377,687
Staples, Inc. (b)................................. 216,450 2,976,979 6,249,994
------------ ------------
26,003,154 36,576,276
------------ ------------
TOTAL COMMON STOCKS (82.5%)....................... 151,241,383 202,012,650
------------ ------------
</TABLE>
See accompanying notes to schedule of investments.
F-21
<PAGE>
JUNDT GROWTH FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONCLUDED)
JUNE 30, 1995
<TABLE>
<CAPTION>
PRINCIPAL
ISSUE AMOUNT COST VALUE (A)
- ---------------------------------------------------------------------- ----------- --------------- ------------
<S> <C> <C> <C>
SHORT-TERM SECURITIES
REPURCHASE AGREEMENT (3.6%) (NOTE 2)
Repurchase agreement with Morgan Stanley & Co., Incorporated, 6.0%
acquired on 6/30/1995 and due 7/03/1995 with accrued interest of
$4,462 (collateralized by $9,115,927 including accrued interest, U.S.
Treasury Bond 9.25%, 2/15/2016)...................................... $ 8,923,000 $ 8,923,000 $ 8,923,000
U.S. TREASURY BILLS (14.2%) (C)
5.51%, 7/27/1995...................................................... 15,000,000 14,940,308 14,940,308
5.59%, 7/27/1995...................................................... 20,000,000 19,919,256 19,919,256
--------------- ------------
34,859,564 34,859,564
--------------- ------------
PRIME VALUE FUNDS (0.0%)
Investment in Prime Value Funds Treasury Fund......................... 1,422 1,422 1,422
--------------- ------------
TOTAL SHORT-TERM SECURITIES (17.8%)................................... 43,783,986 43,783,986
--------------- ------------
Total investments in securities (100.3%).............................. $195,025,369(d) 245,796,636
--------------- ------------
Liabilities in excess of other assets (-0.3%)......................... (838,681)
------------
NET ASSETS (100.0%)................................................... $244,957,955
------------
------------
</TABLE>
- ------------------------
Notes to Schedule of Investments:
* American Depository Receipt (ADR).
(a) Securities are valued by procedures described in note 2 to the financial
statements.
(b) Presently non-income producing.
(c) These securities are traded on a discount basis, the interest rates shown
are the discount rates at the time of purchase by the Fund.
(d) Also represents approximate cost for Federal income tax purposes. The
aggregate gross unrealized appreciation and depreciation of investments in
securities based on this cost were:
<TABLE>
<S> <C>
Gross unrealized appreciation.............................. $56,202,268
Gross unrealized depreciation.............................. (5,431,001)
-----------
-----------
Net unrealized appreciation................................ $50,771,267
-----------
-----------
</TABLE>
F-22
<PAGE>
JUNDT FUNDS, INC.
REGISTRATION STATEMENT ON FORM N-1A
PART C
OTHER INFORMATION
<PAGE>
PART C
OTHER INFORMATION
ITEM 24 -- FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements for The Jundt Growth Fund, Inc. (the "Registrant")
are included in Part B of this Registration Statement (Statement of Additional
Information).
(b) Exhibits:
<TABLE>
<C> <S>
1 Amended and Restated Articles of Incorporation and Certificate of
Designation
2 By-Laws (as amended)
3 Not applicable
4 Not applicable
5 Amended Investment Advisory Agreement
6.1 Distribution Agreement
6.2 Form of Selected Dealer Agreement
7 Not applicable
8 Custodian Contract
9.1 Transfer Agency and Service Agreement
9.2 Amended Administration Agreement
9.3 Financial Services Agreement*
10 Opinion and Consent of Faegre & Benson Professional Limited Liability
Partnership
11 Consent of KPMG Peat Marwick LLP
12 Not applicable
13 Not applicable
14 Not applicable
15.1 Class B Distribution Plan
15.2 Class C Distribution Plan
15.3 Class D Distribution Plan
16 Schedules Supporting Computations of Performance Data
17 Not applicable
18 Rule 18f-3 Plan
19 Code of Ethics
20 Powers of Attorney
</TABLE>
ITEM 25 -- PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Registrant is under common control with Jundt Funds, Inc., an open-end
management investment company, by virtue of the fact that the Registrant and
Jundt Funds, Inc. share a common investment adviser. There are no other persons,
to the Registrants knowledge, that are directly or indirectly controlled by or
under common control with the Registrant.
C-1
<PAGE>
ITEM 26 -- NUMBER OF HOLDERS OF SECURITIES
The following table sets forth the number of holders of shares of the
Registrant as of December 5, 1995:
<TABLE>
<CAPTION>
NUMBER OF
TITLE OF CLASS RECORD HOLDERS
- ------------------------------------------------------------------------------ --------------
<S> <C>
Class A Common Shares, par value $.01 per share............................... 837*
Class B Common Shares, par value $.01 per share............................... None
Class C Common Shares, par value $.01 per share............................... None
Class D Common Shares, par value $.01 per share............................... None
</TABLE>
- ------------------------
* Current number of record holders of Registrant's shares as a closed-end
management investment company. Upon conversion of the Registrant into an
open-end investment company, these shares will automatically convert into
Class A Shares.
ITEM 27 -- INDEMNIFICATION
The Articles of Incorporation (Exhibit 1) and Bylaws (Exhibit 2) of the
Registrant provide that the Registrant shall indemnify such persons, for such
expenses and liabilities, in such manner, under such circumstances, and to the
full extent permitted by Section 302A.521 of the Minnesota Statutes, as now
enacted or hereafter amended, provided that no such indemnification may be made
if it would be in violation of Section 17(h) of the Investment Company Act of
1940, as now enacted or hereafter amended. Section 302A.521 of the Minnesota
Statutes, as now enacted, provides that a corporation shall indemnify a person
made or threatened to be made a party to a proceeding against judgments,
penalties, fines, settlements and reasonable expenses, including attorneys' fees
and disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions of the person complained of in the
proceeding, the person: (a) has not been indemnified by another organization for
the same judgments, penalties, fines, settlements and reasonable expenses
incurred by the person in connection with the proceeding with respect to the
same acts or omissions; (b) acted in good faith; (c) received no improper
personal benefit; (d) complied with the Minnesota Statute dealing with
directors' conflicts of interest, if applicable; (e) in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was unlawful; and (f)
reasonably believed that the conduct was in the best interests of the
corporation or, in certain circumstances, reasonably believed that the conduct
was not opposed to the best interests of the corporation.
The Articles of Incorporation of the Registrant further provide that, to the
fullest extent permitted by the Minnesota Business Corporations Act, as existing
or amended (except as prohibited by the Investment Company Act of 1940, as
amended) a director of the Registrant shall not be liable to the Registrant or
its shareholders for monetary damages for breach of fiduciary duty as director.
The form of Selected Dealer Agreement (Exhibit 6.2) between the Registrant's
principal underwriter, U.S. Growth Investments, Inc. (the "Distributor"), and
any broker-dealer with which the Distributor enters into such Selected Dealer
Agreement provides that each of the parties to the Selected Dealer Agreement
agrees to indemnify and hold the other harmless, including such parties'
officers, directors and any person who is or may be deemed to be a controlling
person of such party, from and against any losses, claims, damages, liabilities
or expenses, whether joint or several, to which any such person or entity may
become subject under the Securities Act of 1933 or otherwise insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
arise out of or are based upon: (a) any untrue statement or alleged untrue
statement of material fact, or any omission or alleged omission to state a
material fact made or omitted by such indemnifying party therein; or (b) any
willful misfeasance or gross misconduct by such indemnifying party in the
performance of its duties and obligations thereunder.
C-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in such Act and will be governed by the final adjudication
of such issue.
ITEM 28 -- BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
In addition to serving as investment adviser to the Registrant, the
Investment Adviser (Jundt Associates, Inc.) serves as the investment adviser to
Jundt U.S. Emerging Growth Fund (a series of Jundt Funds, Inc.) and as a
sub-adviser to Diversified Investors Funds Group (Growth Series) as well as the
investment adviser to numerous private accounts.
See "Management of the Fund -- Investment Adviser" and "Management of the
Fund -- Portfolio Managers" in the Registrant's Prospectus and "Advisory,
Administrative and Distribution Agreements" and "Directors and Officers" in the
Registrant's Statement of Additional Information.
ITEM 29 -- PRINCIPAL UNDERWRITERS
(a) The Distributor is the only principal underwriter of the Registrant's
shares and also serves as principal underwriter of Jundt U.S. Emerging Growth
Fund (a series of Jundt Funds, Inc.).
(b) The following describes certain information regarding the officers and
directors of the Distributor:
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH THE DISTRIBUTOR WITH THE REGISTRANT
- ----------------------- ------------------------------------------- -------------------------------------------
<S> <C> <C>
James R. Jundt Director and Chairman of the Board Chairman of the Board, President and Chief
Executive Officer
Thomas L. Press Director, President, Secretary and None.
Treasurer
</TABLE>
(c) Not applicable.
ITEM 30 -- LOCATION OF ACCOUNTS AND RECORDS
The Registrant's custodian is Norwest Bank Minnesota, N.A., Norwest Center,
90 South Seventh Street, Minneapolis, Minnesota 55402.
The Registrant's transfer agent and dividend disbursing agent is Investors
Fiduciary Trust Company, 1004 Baltimore, Kansas City, Missouri 64105.
Other records will be maintained by the Registrant at its principal offices,
which are located at 1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota
55416 and by Princeton Administrators, L.P., the Registrant's administrator,
located at 800 Scudders Mill Road, Plainsboro, New Jersey 08536.
ITEM 31 -- MANAGEMENT SERVICES
Not applicable.
ITEM 32 -- UNDERTAKINGS
(a) Not applicable.
(b) Not applicable.
C-3
<PAGE>
(c) Registrant hereby undertakes to furnish to each person to whom a
prospectus of the Registrant has been furnished the latest Annual Report of the
Registrant. Such Annual Report will be furnished by the Registrant without
charge upon request by any such person.
(d) Pursuant to Section 16(c) of the Investment Company Act of 1940, as
amended, the Registrant hereby undertakes to call a shareholder meeting for the
purpose of voting upon the question of removal of one or more directors (and to
assist shareholders in communications with each other if and when requested in
writing to do so by the recordholders of not less than ten percent of the
Registrant's outstanding shares.
C-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minneapolis, and State of Minnesota, on the 18
day of December, 1995.
THE JUNDT GROWTH FUND, INC.
By /s/ JAMES R. JUNDT
-----------------------------------
James R. Jundt
CHAIRMAN OF THE BOARD
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-1A has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME/SIGNATURE TITLE DATE
- ---------------------------------------- ------------------------------ ------------------
<C> <S> <C>
Director, Chairman of the
/s/ JAMES R. JUNDT Board, President and Chief
- ---------------------------------------- Executive Officer (Principal December 18, 1995
James R. Jundt Executive Officer)
/s/ DONALD M. LONGLET Vice President and Treasurer
- ---------------------------------------- (Principal Financial and December 18, 1995
Donald M. Longlet Accounting Officer)
- ---------------------------------------- Director
John E. Clute*
- ---------------------------------------- Director
Floyd Hall*
- ---------------------------------------- Director
Demetre M. Nicoloff*
- ---------------------------------------- Director
Darrell R. Wells*
*By /s/ JAMES R.
JUNDT
-------------------------------------- December 18, 1995
James R. Jundt
ATTORNEY-IN-FACT
(Pursuant to Powers of Attorney
dated as of October 4, 1995, filed
with this Registration Statement on
Form N-1A.)
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
NUMBER AND NAME OF EXHIBIT PAGE NUMBER
- ----------------------------------------------------------------------- -----------
<S> <C> <C>
1 Amended and Restated Articles of Incorporation and
Certificate of Designation.................................
2 By-Laws (as amended)........................................
5 Amended Investment Advisory Agreement.......................
6.1 Distribution Agreement......................................
6.2 Form of Selected Dealer Agreement...........................
8 Custodian Contract..........................................
9.1 Transfer Agency and Service Agreement.......................
9.2 Amended Administration Agreement............................
9.3 Financial Services Agreement................................
10 Opinion and Consent of Faegre & Benson Professional Limited
Liability Partnership......................................
11 Consent of KPMG Peat Marwick LLP............................
15.1 Class B Distribution Plan...................................
15.2 Class C Distribution Plan...................................
15.3 Class D Distribution Plan...................................
16 Schedules Supporting Computations of Performance Data.......
18 Rule 18f-3 Plan.............................................
19 Code of Ethics..............................................
20 Powers of Attorney..........................................
</TABLE>
<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
THE JUNDT GROWTH FUND, INC.
ARTICLE 1.
The name of this corporation is THE JUNDT GROWTH FUND, INC.
ARTICLE 2.
This corporation shall have general business purposes and shall have
unlimited power to engage in and do any lawful act concerning any and all
lawful businesses for which corporations may be organized under Minnesota
Statutes, Chapter 302A. Without limiting the generality of the foregoing,
this corporation shall have specific power:
(a) To conduct, operate and carry on the business of a
so-called "open-end" management investment company pursuant to
applicable state and federal regulatory statutes, and exercise all the
powers necessary and appropriate to the conduct of such operations.
(b) To purchase, subscribe for, invest in or otherwise
acquire, and to own, hold, pledge, mortgage, hypothecate, sell, possess,
transfer or otherwise dispose of, or turn to account or realize upon,
and generally deal in, all forms of securities of every kind, nature,
character, type and form, and other financial instruments which may not
be deemed to be securities, including but not limited to futures
contracts and options thereon. Such securities and other financial
instruments may include but are not limited to shares, stocks, bonds,
debentures, notes, scrip, participation certificates, rights to
subscribe, warrants, options, certificates of deposit, bankers'
acceptances, repurchase agreements, commercial paper, choses in action,
evidences of indebtedness, certificates of indebtedness and certificates
of interest of any and every kind and nature whatsoever, secured and
unsecured, issued or to be issued, by any corporation, company,
partnership (limited or general), association, trust, entity or person,
public or private whether organized under the laws of the United States,
or any state, commonwealth, territory or possession thereof, or
organized under the laws of any foreign country, or any state, province,
territory or possession thereof, or issued or to be issued by the United
States Government or any agency or instrumentality thereof, and futures
contracts and options thereon.
(c) To issue and to sell shares of the corporation in such
amounts and on such terms and conditions, for such purposes and for such
amount or kind of consideration now or hereafter permitted by the laws
of the State of Minnesota, the Investment Company Act of 1940, as
amended, and by these Articles of Incorporation, as its Board of
Directors may determine.
<PAGE>
(d) To redeem, purchase or otherwise acquire, hold, dispose
of, resell, transfer, reissue or cancel shares of the corporation (all
without the vote or consent of the shareholders of the corporation) in
any manner and to the extent now or hereafter permitted by the laws of
the State of Minnesota, the Investment Company Act of 1940, as amended,
and by these Articles of Incorporation.
(e) In the above provisions of this Article 2, purposes shall
also be construed as powers and powers shall also be construed as
purposes, and the enumeration of specific purposes or powers shall not
be construed to limit other statements of purposes or to limit purposes
or powers which the corporation may otherwise have under applicable law,
all of the same being separate and cumulative, and all of the same may
be carried on, promoted and pursued, transacted or exercised in any
place whatsoever.
ARTICLE 3.
This corporation shall have perpetual existence.
ARTICLE 4.
The location and post office address of the registered office of this
corporation in Minnesota is 1550 Utica Avenue South, Suite 950, Minneapolis,
Minnesota 55416.
ARTICLE 5.
(a) The total number of authorized shares of this corporation is
10,000,000,000, all of which shall be common shares of the par value of
$.01 each.
(b) The Board of Directors may classify and reclassify any issued or
unissued shares of the corporation into one or more additional or other
classes or series as may be established from time to time by setting or
changing in any one or more respects the designations, preferences,
conversion or other rights, voting powers, restrictions, limitations as
to dividends, qualifications or terms or conditions of redemption of
such shares and pursuant to such classification or reclassification to
increase or decrease the number of authorized shares of any existing
class or series.
(c) Unless otherwise expressly provided in these Articles of
Incorporation, including any Certificates of Designation creating any
class or series of shares of the corporation, the holders of each class
or series of shares of the corporation shall be entitled to dividends
and distributions in such amounts and at such times as may be determined
by the Board of Directors, and the dividends and distributions paid with
respect to the various classes or series of shares of the corporation
may vary among such classes and series.
-2-
<PAGE>
Expenses related to the distribution of, and other identified expenses
that should properly be allocated to, the shares of a particular class
or series of shares of the corporation may be charged to and borne
solely by such class or series and the bearing of expenses solely by a
class or series of shares of the corporation may be appropriately
reflected (in a manner determined by the Board of Directors) and cause
differences in the net asset value attributable to, and the dividend,
redemption and liquidation rights of, the shares of each class or series
of shares of the corporation.
(d) On each matter submitted to a vote of shareholders, each holder of
a share of the corporation shall be entitled to one vote for each share
standing in such holder's name on the books of the corporation,
irrespective of the class or series thereof, and all shares of all
classes and series shall vote together as a single class; provided,
however, that (i) as to any matter with respect to which a separate vote
of any class or series is required by the Investment Company Act of
1940, as amended, and in effect from time to time, or any rules,
regulations or orders issued thereunder, or by the Minnesota Business
Corporations Act, such requirement as to a separate vote by that class
or series shall apply in lieu of a general vote of all classes and
series as described above; (ii) in the event that the separate vote
requirements referred to in (i) above apply with respect to one or more
classes or series, then, subject to clause (iii) below, the shares of
all other classes and series not entitled to a separate class vote shall
vote as a single class, and (iii) as to any matter which does not affect
the interest of a particular class or series, such class or series shall
not be entitled to any vote and only the holders of shares of the one or
more affected classes and series shall be entitled to vote.
(e) Unless otherwise expressly provided in these Articles of
Incorporation, including any Certificates of Designation creating any
class or series of shares of the corporation, in the event of any
liquidation, dissolution or winding up of the corporation, whether
voluntary or involuntary, the holders of all classes and series of
shares of the corporation shall be entitled, after payment or provision
for payment of the debts and other liabilities of the corporation, to
share ratably in the remaining net assets of the corporation.
(f) The corporation may issue, sell, redeem, purchase or otherwise
acquire, hold, dispose of, resell, transfer, reissue or cancel any of
its shares in fractional denominations to the same extent as its whole
shares, and shares and fractional denominations shall have, in
proportion to the relative fractions represented thereby, all the rights
of whole shares, including, without limitation, the right to vote, the
right to receive dividends and distributions, and the right to
participate upon liquidation of the corporation.
(g) All persons who shall acquire shares of the corporation shall
acquire the same subject to the provisions of the Articles of
Incorporation and By-Laws of the corporation. All issued and outstanding
shares of the corporation issued on or before December 28, 1995 shall
without further action be considered Class A Shares.
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ARTICLE 6.
(a) No shareholder of this corporation shall have any cumulative
voting rights for the election of directors.
(b) No shareholder of this corporation shall have any preemptive
rights to subscribe for, purchase or acquire any shares of the corporation
of any class, whether unissued or now or hereafter authorized, or any
rights, warrants, obligations or other securities exercisable for,
convertible into or exchangeable for any such shares.
(c) Each holder of shares of the corporation shall be entitled to
require the corporation to redeem all or any part of such shares
standing in the name of such holder on the books of the corporation and
all shares issued by the corporation shall be subject to redemption by
the corporation at the redemption price of such shares as in effect from
time to time as may be determined by the Board of Directors in
accordance with the provisions hereof, subject to the right of the Board
of Directors to suspend the right of redemption of shares of the
corporation or postpone the date of payment of such redemption price in
accordance with the provisions of applicable law. The redemption price
of shares of the corporation shall be the net asset value thereof as
determined by the Board of Directors from time to time in accordance
with the provisions of applicable law, less such redemption fee or other
charge, if any, as may be fixed by resolution of the Board of Directors.
Payment of the redemption price shall be made in cash or in kind by the
corporation at such time and in such manner as may be determined from
time to time by the Board of Directors.
ARTICLE 7.
The following additional provisions, when consistent with law, are
hereby established for the management of the business of this corporation, for
the conduct of the affairs of the corporation, and for the purpose of describing
certain specific powers of this corporation and of its directors and
shareholders.
(a) In furtherance and not in limitation of the powers conferred by
statute and pursuant to these Articles of Incorporation, the Board of
Directors is expressly authorized to do the following:
(1) to make, adopt, alter, amend and repeal By-Laws
of the corporation unless reserved to the shareholders by the
By-Laws or by the laws of the State of Minnesota, subject to the
power of the shareholders to change or repeal such By-Laws;
(2) to distribute, in its discretion, for any fiscal
year (in the year or in the next fiscal year) as ordinary dividends
and as capital gains distributions, respectively, amounts
sufficient to enable the corporation to qualify under the Internal
Revenue Code of 1986, as amended, as a regulated investment company
to avoid any liability
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<PAGE>
for federal income tax in respect of such year. Any distribution
or dividend paid to shareholders from any capital source shall be
accompanied by a written statement showing the source or sources
of such payment;
(3) to authorize, subject to such vote, consent, or
approval of shareholders and other conditions, if any, as may be
required by any applicable statute, rule or regulation, the
execution and performance by the corporation of any agreement or
agreements with any person, corporation, association, company,
trust, partnership (limited or general) or other organization
whereby, subject to the supervision and control of the Board of
Directors, any such other person, corporation, association,
company, trust, partnership (limited or general), or other
organization shall render managerial, investment advisory,
distribution, transfer agent, accounting and/or other services to
the corporation (including, if deemed advisable, the management or
supervision of the investment portfolio of the corporation) upon
such terms and conditions as may be provided in such agreement or
agreements;
(4) to authorize any agreement of the character
described in subparagraph 3 of this paragraph (a) with any person,
corporation, association, company, trust, partnership (limited or
general) or other organization, although one or more of the members
of the Board of Directors or officers of the corporation may be the
other party to any such agreement or an officer, director,
employee, shareholder, or member of such other party, and no such
agreement shall be invalidated or rendered voidable by reason of
the existence of any such relationship;
(5) to allot and authorize the issuance of the authorized but
unissued shares of this corporation;
(6) to accept or reject subscriptions for shares made after
incorporation; and
(7) to fix the terms, conditions and provisions of
and authorize the issuance of options to purchase or subscribe for
shares of any series including the option price or prices at which
shares may be purchased or subscribed for.
(b) The determination as to any of the following matters made by
or pursuant to the direction of the Board of Directors consistent with
these Articles of Incorporation and in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of
duties, shall be final and conclusive and shall be binding upon the
corporation and every holder of shares of its capital stock: namely, the
amount of the assets, obligations, liabilities and expenses of the
corporation; the amount of the net income of the corporation from
dividends and interest for any period and the amount of assets at any
time legally available for the payment of dividends; the amount of
paid-in surplus, other surplus, annual or other net profits, or net
assets in excess of capital, undivided profits, or excess of profits
over losses on sales of securities; the amount, purpose, time of
creation, increase or decrease, alteration or cancellation of any
reserves or charges and the propriety thereof (whether or not any
obligation or liability for which such reserves or charges shall have
been created shall
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<PAGE>
have been paid or discharged); the market value, or any sale, bid or
asked price to be applied in determining the market value, of any
security owned or held by the corporation; the fair value of any other
asset owned by the corporation; the number of shares of the corporation
issued or issuable; any matter relating to the acquisition, holding and
disposition of securities and other assets by the corporation; and any
question as to whether any transaction constitutes a purchase of
securities on margin, a short sale of securities, or an underwriting of
the sale of, or participation in any underwriting or selling group in
connection with the public distribution of any securities.
(c) The Board of Directors or the shareholders of the
corporation may adopt, amend, affirm or reject investment policies and
restrictions upon investment or the use of assets of the corporation and
may designate some such policies as fundamental and not subject to
change other than by a vote of a majority of the outstanding voting
securities, as such phrase is defined in the Investment Company Act of
1940, as amended.
(d) This corporation shall indemnify such persons for such
expenses and liabilities, in such manner, under such circumstances, and
to the full extent permitted by Section 302A.521 of the Minnesota
Statutes, as now enacted or hereafter amended, provided, however, that
no such indemnification may be made if it would be in violation of
Section 17(h) of the Investment Company Act of 1940, as now enacted or
hereafter amended.
(e) Any action which might be taken at a meeting of the Board
of Directors, or any duly constituted committee thereof, may be taken
without a meeting if done in writing and signed by a majority of the
directors or committee members; provided, however, that the foregoing
procedure may not be employed with respect to the approval of any
contract subject to the provisions of Section 15 of the Investment
Company Act of 1940, as amended.
(f) Any purchase or transfer or purported purchase or transfer
of any of the shares of this corporation to a "disqualifying
organization" within the meaning of Section 860E(e)(5) of the Internal
Revenue Code of 1986, as amended (the "Code"), which at the date hereof
includes, but shall not be limited to, the following: (i) the United
States, any state or political subdivision thereof, any foreign
government, any international organization or any agency or
instrumentality of any of the foregoing; (ii) any organization (other
than a cooperative described in Section 521 of the Code) that is exempt
from the tax imposed by Sections 1-1399 of the Code and not subject to
the tax imposed by Section 511 of the Code; or (iii) any organization
described in Section 1381(a)(2)(C) of the Code shall be void. (For the
purpose of applying clause (i) above, the rules of Section 168(h)(2)(D)
of the Code (relating to the treatment of certain taxable
instrumentalities) shall apply; provided, however, that in the case of
the Federal Home Loan Mortgage Corporation, clause (ii) of Section
168(h)(2)(D) of the Code shall not apply.) Any capital stock
purportedly transferred to or retained by such an entity may, at the
option of this corporation, be repurchased by this corporation at the
net asset value at the time of repurchase.
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ARTICLE 8.
The names and addresses of the first directors, who shall serve until
the first annual or special meeting of shareholders or until their successors
are elected and qualified, are:
John E. Clute Demetre M. Nicoloff
1 Jefferson Square 928 East 28th Street
Boise, ID 83728 Suite 420
Minneapolis, MN 55407
Floyd Hall Darrell R. Wells
Suite 1520 4350 Brownsboro Road
One Meadowlands Plaza Louisville, KY 40207
East Rutherford, NJ 07073
James R. Jundt
1550 Utica Avenue South
Suite 950
Minneapolis, MN 55416
ARTICLE 9.
(a) The business and affairs of the corporation shall be
managed by or under the direction of a Board of Directors. Directors
need not be shareholders. The initial number of directors on the Board
of Directors shall be the number of directors named in Article 8. The
number of directors may be increased by the shareholders or Board of
Directors or decreased by the shareholders from the number of directors
named in Article 8.
(b) The term of office of each director shall be from the time
of his or her election and qualification until his or her successor is
elected and has qualified, or until his or her death or resignation, or
until he or she shall have resigned or been removed by the Board of
Directors pursuant to policies that may be adopted by the Board of
Directors relating to retirement, minimum attendance and incompetence.
(c) Any vacancy on the Board of Directors that results from an
increase in the number of directors may be filled by a majority of the
Board of Directors then in office, and any other vacancy occurring in
the Board of Directors may be filled by a majority of the directors then
in office, although less than a quorum, or by a sole remaining director;
provided, however, that no vacancy shall be filled as provided above if
prohibited by the provisions of the Investment Company Act of 1940, as
amended. Notwithstanding Section 302A.225 of the Minnesota Business
Corporations Act (or any successor provision), any director elected to
fill a vacancy shall serve for the term of office set forth in paragraph
(b) of this Article 9.
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(d) No person (other than a person nominated by or on behalf of
the Board of Directors) shall be eligible for election as a director at
any regular or special meeting of shareholders unless a written request
that his or her name be placed in nomination is received from a
shareholder of record by the Secretary of the corporation not less than
60 days prior to the date fixed for the meeting, together with the
written consent of such person to serve as a director.
ARTICLE 10.
To the fullest extent permitted by the Minnesota Business Corporations
Act, as the same exists or may hereafter be amended (except as prohibited by
the Investment Company Act of 1940, as amended), a director of this corporation
shall not be liable to this corporation or its shareholders for monetary
damages for breach of fiduciary duty as director.
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<PAGE>
CERTIFICATE OF DESIGNATION
OF
CLASS A, B, C AND D COMMON SHARES
OF
THE JUNDT GROWTH FUND, INC.
The undersigned duly elected Secretary of the Jundt Growth Fund, Inc., a
Minnesota corporation (the "Corporation"), hereby certifies that the following
is a true, complete and correct copy of resolutions duly adopted by a majority
of the directors of the Board of Directors of the Corporation on December 4,
1995:
WHEREAS, the total authorized number of shares of the Corporation
is ten billion, all of which shares are common shares, par value $.01
per share, as set forth in the Corporation's Amended and Restated
Articles of Incorporation (the "Articles"); and
WHEREAS, pursuant to Section 5(b) of the Articles, the common
shares may be classified by the Board of Directors into one or more
classes with such relative rights, including, without limitation,
conversion rights, and preferences as shall be stated or expressed in
a resolution or resolutions providing for the issue of any such class
or classes as may be adopted from time to time by the Board of
Directors of the Corporation; and
WHEREAS, the Board of Directors desires to designate certain
classes of the Corporation's common shares.
NOW, THEREFORE, BE IT RESOLVED, that of the Corporation's ten
billion common shares, all of which are heretofore undesignated as to
class in the Articles, one billion are hereby designated as Class A
Common Shares, one billion are hereby designated as Class B Common
Shares, one billion are hereby designated as Class C Common Shares,
and one billion are hereby designated as Class D Common Shares.
FURTHER RESOLVED, that the Class A, Class B, Class C and Class D
Common Shares hereby designated shall have the relative rights and
preferences set forth in the Articles. As provided in Section 5 of
the Articles: (a) the Class A, Class B, Class C and Class D Common
Shares hereby designated may be subject to such charges and expenses
(including, by way of example but not by way of limitation, such
front-end and deferred sales charges as may be permitted under the
Investment Company Act of 1940 (the "1940 Act") and the rules of the
National Association of Securities Dealers, Inc., and expenses under
Rule 12b-1 plans, administration plans, service plans or other
<PAGE>
plans or arrangements, however designated) adopted from time to time by the
Board of Directors of the Corporation in accordance, to the extent
applicable, with the 1940 Act, which charges and expenses may differ from
those applicable to another Class, and all of the charges and expenses to
which a Class is subject shall be borne by such Class and shall be
appropriately reflected in determining the net asset value and the amounts
payable with respect to dividends and distributions on, and redemptions or
liquidation of, such Class; and (b) the Board of Directors may, subject to
compliance with the requirements of the 1940 Act, provide that shares of
any Class shall be convertible (automatically, optionally or otherwise)
into shares of one or more other Classes in accordance with such
requirements and procedures as may be established by the Board of
Directors.
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized and directed to file with the office of the Secretary of
State of Minnesota a Certificate of Designation setting forth the
relative rights and preferences of the Class A, Class B, Class C and
Class D Common Shares designated hereby, as required by Section
302A.401, Subd. 3(b) of the Minnesota Statutes.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designation on behalf of the Corporation this _________ day of ___________,
1995.
_________________________________
James E. Nicholson, Secretary
<PAGE>
BY-LAWS
OF
THE JUNDT GROWTH FUND, INC.
(as amended)
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01 NAME. The name of the corporation is The Jundt Growth
Fund, Inc.
Section 1.02 REGISTERED OFFICE. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of Incorporation
or resolution of the directors filed with the Secretary of State of Minnesota
changing the registered office.
Section 1.03 OTHER OFFICES. The corporation may have such other
offices and places of business, within or without the State of Minnesota, as the
directors shall, from time to time, determine.
Section 1.04. CORPORATE SEAL. The corporation is not required to
have a seal, but may have a seal in such form as may be prescribed by the
President or a Vice President.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE AND TIME OF MEETINGS. Except as provided
otherwise by Minnesota Statutes Chapter 302A, meetings of the shareholders may
be held at any place, within or without the State of Minnesota, designated by
the directors and, in the absence of such designation, shall be held at the
registered office of the corporation in the State of Minnesota. The directors
shall designate the time of day for each meeting and, in the absence of such
designation, every meeting of shareholders shall be held at ten o'clock a.m.
Section 2.02. REGULAR MEETINGS. Annual meetings of shareholders are
not required by these By-Laws. Regular meetings of shareholders shall be held
only with such frequency and at such times and places as provided in and
required by law; provided, however, that the Board of Directors may in its
discretion cause a regular meeting of shareholders to be held at any time.
Section 2.03. SPECIAL MEETINGS. Special meetings of the shareholders
may be held at any time and for any purpose and may be called by the Chairman of
the Board, the
<PAGE>
President, and two or more directors, or by one or more shareholders holding ten
percent (10%) or more of the shares entitled to vote on the matters to be
presented to the meeting.
Section 2.04. QUORUM; ADJOURNED MEETINGS. The holders of a majority
of the shares outstanding and entitled to vote at the meeting shall constitute a
quorum for the transaction of business at any regular or special shareholders'
meeting. In case a quorum shall not be present at a meeting, those present in
person or by proxy shall adjourn to such day as they shall, by majority vote,
agree upon without further notice other than by announcement at the meeting at
which such adjournment is taken. If a quorum is present, a meeting may be
adjourned from time to time without notice other than announcement at the
meeting. At adjourned meetings at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
noticed. If a quorum is present, the shareholders may continue to transact
business until adjournment notwithstanding the withdrawal of enough shareholders
to leave less than a quorum.
Section 2.05. VOTING. At each meeting of the shareholders, every
shareholder shall have the right to vote in person or by proxy. Each
shareholder, unless the Articles of Incorporation or applicable laws provide
otherwise, shall have one vote for each share having voting power registered in
his or her name on the books of the corporation. Upon the demand of any
shareholder, the vote upon any question before the meeting shall be by written
ballot. Except as otherwise specifically provided by these By-Laws, the
Articles of Incorporation or as required by provisions of the Investment Company
Act of 1940 or other applicable laws, all questions shall be decided by a
majority vote of the number of shares entitled to vote and represented at the
meeting in person or by proxy at the time of the vote.
Section 2.06. VOTING - PROXIES. The right to vote by proxy shall
exist only if the instrument authorizing such proxy to act shall have been
executed in writing by the shareholder himself or herself or by his or her
attorney thereunto duly authorized in writing. No proxy shall be voted after
three years from its date unless it provides for a longer period.
Section 2.07. CLOSING OF BOOKS. The Board of Directors may fix a
time, not exceeding sixty (60) days preceding the date of any meeting of
shareholders, as a record date for the determination of the shareholders
entitled to notice of, and to vote at, such meeting, notwithstanding any
transfer of shares on the books of the corporation after any record date so
fixed. If the Board of Directors fails to fix a record date for determination
of the shareholders entitled to notice of, and to vote at, any meeting of
shareholders, the record date shall be the thirtieth (30th) day preceding the
date of such meeting.
Section 2.08. NOTICE OF MEETINGS. Except as otherwise specified in
Section 2.04 or required by law, written notice of each meeting of the
shareholders, stating the date, time and place and, in the case of a special
meeting, the purpose or purposes, shall be given at least ten days and not more
than sixty days prior to the meeting to every holder of shares entitled to vote
at such meeting. The business transacted at a special meeting of shareholders
is limited to the purposes stated in the notice of the meeting.
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Section 2.09. WAIVER OF NOTICE. Notice of any regular or special
meeting may be waived either before, at or after such meeting in writing signed
by each shareholder or representative thereof entitled to vote the shares so
represented.
Section 2.10. WRITTEN ACTION. Any action which might be taken at a
meeting of the shareholders may be taken without a meeting if done in writing
and signed by all of the shareholders entitled to vote on that action.
ARTICLE III
DIRECTORS
Section 3.01. GENERAL POWERS.
(a) The property, affairs and business of the corporation shall be
managed by the Board of Directors, which may exercise all the powers of the
corporation except those powers vested solely in the shareholders of the
corporation by statute, the Articles of Incorporation, or these By-Laws, as
amended.
(b) All acts done by any meeting of the Directors or by any person
acting as a director, so long as his or her successor shall not have been duly
elected or appointed, shall, notwithstanding that it be afterwards discovered
that there was some defect in the election of the directors or such person
acting as aforesaid or that they or any of them were disqualified, be as valid
as if the directors or such other person, as the case may be, had been duly
elected and were or was qualified to be directors or a director of the
corporation.
Section 3.02. POWER TO DECLARE DIVIDENDS.
(a) The Board of Directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the shareholders of
the corporation according to their respective rights and interests.
(b) The Board of Directors may at any time declare and distribute pro
rata among the shareholders a "stock dividend" out of the corporation's
authorized but unissued shares of stock, including any shares previously
purchased by the corporation.
Section 3.03. ANNUAL MEETING. The Board of Directors shall meet at
the registered office of the corporation, or at such other place within or
without the State of Minnesota, and at such time as may be designated by the
Board of Directors, for the purpose of electing the officers of the corporation
and for the transaction of such other business as shall come before the meeting.
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Section 3.04. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held from time to time at such time and place within or
without the State of Minnesota as may be fixed by resolution adopted by a
majority of the whole Board of Directors.
Section 3.05. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the President, or by any
two of the directors and shall be held from time to time at such time and place
as may be designated in the notice of such meeting.
Section 3.06. NOTICE OF MEETINGS. Unless otherwise required by
Statute, no notice need be given of any annual or regular meeting of the Board
of Directors. Notice of each special meeting of the Board of Directors shall be
given by the Secretary who shall give at least twenty-four (24) hours' notice
thereof to each director by mail, telephone, telegram or in person.
Section 3.07. WAIVER OF NOTICE. Notice of any meeting of the Board
of Directors may be waived either before, at, or after such meeting in writing
signed by each director. A director, by his attendance and participation in the
action taken at any meeting of the Board of Directors, shall be deemed to have
waived notice of such meeting.
Section 3.08. QUORUM. A majority of the whole Board of Directors
shall constitute a quorum for the transaction of business except that, when a
vacancy or vacancies exist, a majority of the remaining directors shall
constitute a quorum.
Section 3.09. VACANCIES. Vacancies in the Board of Directors of this
corporation shall be filled as provided in the Articles of Incorporation.
Section 3.10. EXECUTIVE COMMITTEE. The Board of Directors, by
unanimous affirmative action of the entire Board, may establish an Executive
Committee consisting of two (2) or more directors. Such Committee may meet at
stated times or on notice of all given by any of their own number. During the
intervals between meetings of the Board of Directors, such Committee shall
advise and aid the officers of the corporation in all matters concerning the
business and affairs of the corporation, and, generally, perform such duties and
exercise such powers as may be directed or delegated by the Board of Directors
from time to time. The Board of Directors may, by unanimous affirmative action
of the entire Board, delegate to such Committee authority to exercise all the
powers of the Board of Directors, except the power to amend the By-Laws and to
take action on matters reserved to the entire Board by the Investment Company
Act of 1940, as amended, while the Board of Directors is not in session.
Vacancies in the membership of the Committee shall be filled by the Board of
Directors at a regular meeting or at a special meeting called for that purpose.
Section 3.11. OTHER COMMITTEES. The Board of Directors may establish
other committees from time to time making such regulations as it deems advisable
with respect to the membership, authority and procedures of such committees.
Section 3.12. WRITTEN ACTION. Any action which might be taken at a
meeting of the Board of Directors, or any duly constituted committee thereof,
may be taken without a
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<PAGE>
meeting if done in writing and signed by a majority of the directors or
committee members; provided, however, that the foregoing procedure may not be
employed with respect to the approval of any contract subject to the provisions
of Section 15 of the Investment Company Act of 1940, as amended.
Section 3.13. COMPENSATION. Directors who are not salaried officers
of the corporation shall receive such fixed sum per meeting attended or such
fixed annual sum as shall be determined, from time to time, by resolution of the
Board of Directors. All directors may receive their expenses, if any, of
attendance at meetings of the Board of Directors or any committee thereof.
Nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving proper compensation
therefor.
ARTICLE IV
OFFICERS
Section 4.01. NUMBER. The officers of the corporation shall consist
of a Chairman of the Board (if one is elected by the Board), the President, one
or more Vice Presidents (if desired by the Board), a Secretary and one or more
Assistant Secretaries, a Treasurer and one or more Assistant Treasurers, and
such other officers and agents as may, from time to time, be elected by the
Board of Directors. Any two offices except those of Chairman of the Board and
Treasurer may be held by one person.
Section 4.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. At each
annual meeting of the Board of Directors, the Board shall elect, from within or
without their number, the President, the Secretary, the Treasurer and such other
officers as may be deemed advisable. Such officers shall hold office until the
next annual meeting of the directors or until their successors are elected and
qualify. The President and all other officers who may be directors shall
continue to hold office until the election and qualification of their
successors, notwithstanding an earlier termination of their directorship.
Section 4.03. RESIGNATION. Any officer may resign his office at any
time by delivering a written resignation to the Board of Directors, the
President, the Secretary, or any Assistant Secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 4.04. REMOVAL AND VACANCIES. Any officer may be removed from
his or her office by a majority of the whole Board of Directors, with or without
cause. Such removal, however, shall be without prejudice to the contract rights
of the person so removed. If there be a vacancy among the officers of the
corporation by reason of death, resignation or otherwise, such vacancy shall be
filled for the unexpired term by the Board of Directors.
Section 4.05. CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one is elected, shall preside at all meetings of the shareholders and directors
and shall have such other duties as may be prescribed, from time to time, by the
Board of Directors.
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Section 4.06. PRESIDENT. The President shall have general active
management of the business of the corporation. In the absence of the Chairman
of the Board, he or she shall preside at all meetings of the shareholders and
directors. He or she shall be the chief executive officer of the corporation
and shall see that all orders and resolutions of the Board of Directors are
carried into effect. He or she shall be ex officio a member of all standing
committees. He or she may execute and deliver, in the name of the corporation,
any deeds, mortgages, bonds, contracts or other instruments pertaining to the
business of the corporation and, in general, shall perform all duties usually
incident to the office of President. He or she shall have such other duties as
may, from time to time, be prescribed by the Board of Directors.
Section 4.07. VICE PRESIDENT. Each Vice President shall such powers
and shall perform such duties as may be specified in the By-Laws or prescribed
by the Board of Directors or by the President. In the event of absence or
disability of the President, Vice Presidents shall succeed to his power and
duties in the order designated by the Board of Directors.
Section 4.08. SECRETARY. The Secretary shall be secretary of, and
shall attend all, meetings of the shareholders and Board of Directors and shall
record all proceedings of such meetings in the minute book of the corporation.
He or she shall give proper notice of meetings of shareholders and directors.
He or she shall keep the seal of the corporation and affix the same to any
instrument requiring it and may, when necessary, attest the seal by his or her
signature. He or she shall perform such other duties as may, from time to time,
be prescribed by the Board of Directors or by the President.
Section 4.09. TREASURER. The Treasurer shall keep accurate accounts
of all moneys of the corporation received or disbursed. He or she shall deposit
all moneys, drafts and checks in the name of, and to the credit of, the
corporation in such banks and depositories as a majority of the whole Board of
Directors shall, from time to time, designate. He or she shall have power to
endorse, for deposit, all notes, checks and drafts received by the corporation.
He or she shall disburse the funds of the corporation, as ordered by the Board
of Directors, making proper vouchers therefor. He or she shall render to the
President and the directors, whenever required, an account of all his or her
transactions as Treasurer and of the financial condition of the corporation, and
shall perform such other duties as may, from time to time, be prescribed by the
Board of Directors or by the President.
Section 4.10. ASSISTANT SECRETARIES. At the request of the
Secretary, or in his or her absence or disability, any Assistant Secretary shall
have power to perform all the duties of the Secretary and, when so acting, shall
have all the powers of, and be subject to all restrictions upon, the Secretary.
The Assistant Secretaries shall perform such other duties as from time to time
may be assigned to them by the Board of Directors or the President.
Section 4.11. ASSISTANT TREASURERS. At the request of the Treasurer,
or in his or her absence or disability, any Assistant Treasurer shall have power
to perform all the duties of the Treasurer, and when so acting, shall have all
the powers of, and be subject to all the restrictions
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upon, the Treasurer. The Assistant Treasurers shall perform such other duties
as from time to time may be assigned to them by the Board of Directors or the
President.
Section 4.12. COMPENSATION. The officers of this corporation shall
receive such compensation for their services as may be determined, from time to
time, by resolution of the Board of Directors.
Section 4.13. SURETY BONDS. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940, as amended
and the rules and regulations of the Securities and Exchange Commission) to the
corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his or her
duties to the corporation, including responsibility for negligence and for the
accounting of any of the corporation's property, funds or securities that may
come into his hands. In any case, a new bond of like character shall be given
at least every six years, so that the date of the new bond shall not be more
than six years subsequent to the date of the bond immediately preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. CERTIFICATES FOR SHARES.
(a) Shares issued by the corporation may be certificated or
uncertificated, as provided by a resolution approved by the affirmative vote of
a majority of the directors present. Every owner of certificated shares issued
by the corporation shall be entitled to a certificate, to be in such form as
shall be prescribed by the Board of Directors, certifying the number of shares
of the corporation owned by him or her. The certificates for such shares shall
be numbered in the order in which they shall be issued and shall be signed, in
the name of the corporation, by the President or a Vice President and by the
Treasurer, or by such officers as the Board of Directors may designate. Such
signatures may be facsimile if authorized by the Board of Directors. Every
certificate surrendered to the corporation for exchange or transfer shall be
cancelled, and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancelled, except in cases provided for in Section 5.08.
(b) In case any officer, transfer agent or registrar who shall have
signed any such certificate, or whose facsimile signature has been placed
thereon, shall cease to be such an officer (because of death, resignation or
otherwise) before such certificate is issued, such certificate may be issued and
delivered by the corporation with the same effect as if he or she were such
officer, transfer agent or registrar at the date of issue.
Section 5.02. ISSUANCE OF SHARES. The Board of Directors is
authorized to cause to be issued shares of the corporation up to the full amount
authorized by the Articles of Incorporation in such amounts as may be determined
by the Board of Directors and as may be permitted by law. No shares shall be
allotted except in consideration of cash or of an amount
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transferred from surplus to stated capital upon a share dividend. At the time
of such allotment of shares, the Board of Directors making such allotments shall
state, by resolution, their determination of the fair value to the corporation
in monetary terms of any consideration other than cash for which shares are
allotted. No shares issued by the corporation shall be issued, sold, or
exchanged by or on behalf of the corporation except either to or through a
principal underwriter for distribution or at a current public offering price
described in the corporation's prospectus, except as provided in Section 22(d)
of the Investment Company Act of 1940, as amended.
Section 5.03. TRANSFER OF SHARES. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named on the books of
the corporation in the case of uncertificated shares or in the certificate in
the case of certificated shares, or the shareholder's legal representative, or
the shareholder's duly authorized attorney-in-fact, and, in the case of
certificated shares, upon surrender of the certificate or the certificates for
such shares or a duly executed assignment covering shares held in uncertificated
form. The corporation may treat, as the absolute owner of shares of the
corporation, the person or persons in whose name shares are registered on the
books of the corporation.
Section 5.04. REGISTERED SHAREHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Minnesota.
Section 5.05. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and registrar,
only one countersignature by such person shall be required.
Section 5.06. TRANSFER REGULATIONS. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from time
to time adopt rules and regulations with reference to the method of transfer of
the shares of stock of the corporation.
Section 5.07. LOST, STOLEN, DESTROYED AND MUTILATED CERTIFICATES.
The holder of any certificated shares of the corporation shall immediately
notify the corporation of any loss, theft, destruction or mutilation of any
certificate therefor, and the Board of Directors may, in its discretion, cause
to be issued to him a new certificate or certificates of stock upon the
surrender of the mutilated certificate or in case of loss, theft or destruction
of the certificate, upon satisfactory proof of such loss, theft or destruction,
after the owner of the lost, stolen or destroyed certificate, or his or her
legal representatives, gives to the corporation and to such registrar or
transfer agent as may be authorized or required to countersign such new
certificate or certificates a bond, in such sum as they may direct, and with
such surety or sureties, as they may direct, as
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indemnity against any claim that may be made against them or any of them on
account of or in connection with the alleged loss, theft, or destruction of any
such certificate.
ARTICLE VI
DIVIDENDS, SURPLUS, ETC.
Section 6.01. The corporation's net investment income will be
determined, and its dividends shall be declared and made payable at such time(s)
as the Board of Directors, the Dividend Declaration Committee or other duly
authorized committee of the Board of Directors shall determine; dividends shall
be payable to shareholders of record as of a record date determined by the Board
of Directors, the Dividend Declaration Committee or other duly authorized
committee of the Board of Directors.
It shall be the policy of the corporation to qualify for and elect the
tax treatment applicable to regulated investment companies under the Internal
Revenue Code, so that the corporation will not be subjected to Federal income
tax on such part of its income or capital gains as it distributes to
shareholders.
ARTICLE VII
BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. BOOKS AND RECORDS. The Board of Directors of the
corporation shall cause to be kept:
(1) a share register, giving the names and addresses of the
shareholders, the number of shares of each class held by each, and the dates on
which the certificates therefor were issued;
(2) records of all proceedings of shareholders and directors; and
(3) such other records and books of account as shall be necessary and
appropriate to the conduct of the corporate business.
Section 7.02. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of
Directors shall cause to be kept at the registered office of the corporation
originals or copies of:
(1) records of all proceedings of shareholders and directors;
(2) By-Laws of the corporation and all amendments thereto; and
(3) reports made to any or all of the shareholders within the last
preceding three (3) years.
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Section 7.03. AUDIT, ACCOUNTANT.
(a) The Board of Directors shall cause the records and books of
account of the corporation to be audited at least once in each fiscal year and
at such other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent certified public
accountant or firm of independent certified public accountants as its Accountant
to examine the accounts of the corporation and to sign and certify financial
statements filed by the corporation. The Accountant's certificates and reports
shall be addressed both to the Board of Directors and to the shareholders.
(c) A majority of the members of the Board of Directors shall select
the Accountant at any meeting held before the first regular meeting of
shareholders, and thereafter shall select the Accountant annually at a meeting
held within thirty (30) days before or after the beginning of the fiscal year of
the corporation. Such selection shall be submitted for ratification or
rejection at the next succeeding annual shareholders' meeting, if such meeting
be held. If such meeting shall reject such selection, the Accountant shall be
selected by majority vote, either at the meeting at which the rejection occurred
or at a subsequent meeting of shareholders called for such purpose.
(d) Any vacancy occurring between annual meetings, if such meetings
be held, due to the death or resignation of the Accountant or otherwise, may be
filled by the vote of a majority of those members of the Board of Directors who
are not interested persons of the corporation as defined in the Investment
Company Act of 1940, as amended.
Section 7.04. FISCAL YEAR. The fiscal year of the corporation shall
be determined by the Board of Directors.
ARTICLE VIII
INSPECTION OF BOOKS
Section 8.01. Every shareholder of the corporation and every holder
of a voting trust certificate shall have a right to examine, in person or by
agent or attorney, at any reasonable time or times, for any proper purpose, and
at the place or places where usually kept, the share register, books of account
and records of the proceedings of the shareholders and directors and to make
extracts therefrom.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer may
from time to time appoint
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an attorney or attorneys or agent or agents of the corporation, in the name and
on behalf of the corporation, to cast the votes which the corporation may be
entitled to cast as a stockholder or otherwise in any other corporation or
association, any of whose stock or securities may be held by the corporation,
at meetings of the holders of the stock or other securities of any such other
corporation or association, or to consent in writing to any action by any such
other corporation or association, and may instruct the person or persons so
appointed as to the manner of casting such votes or giving such consent, and
may execute or cause to be executed on behalf of the corporation and under its
corporate seal, or otherwise, such written proxies, consents, waivers, or other
instruments as it may deem necessary or proper in the circumstances; or any of
such officers may themselves attend any meeting of the holders of stock or other
securities of any such corporation or association and thereat vote or exercise
any or all other powers of the corporation as the holder of such stock or other
securities of such other corporation or association, or consent in writing to
any action by any such other corporation or association.
ARTICLE X
DETERMINATION OF NET ASSET VALUE
Section 10.01. The net asset value per share of the corporation shall
be determined in good faith by or under supervision of the officers of the
corporation as authorized by the Board of Directors as often and on such days
and at such time(s) as the Board of Directors shall determine, or as otherwise
may be required by law, rule, regulation or order of the Securities and Exchange
Commission.
ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation
shall, as hereinafter provided, be held by or deposited with a bank or trust
company having (according to its last published report) not less than two
million dollars ($2,000,000) aggregate capital, surplus and undivided profits
(the "Custodian").
This corporation shall enter into a written contract with the
Custodian regarding the powers, duties and compensation of the Custodian with
respect to the cash and securities of this corporation held by the Custodian.
Said contract and all amendments thereto shall be approved by the Board of
Directors of this corporation. In the event of the Custodian's resignation or
termination, the corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by this
corporation held by the Custodian be delivered directly to such successor
Custodian.
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ARTICLE XII
AMENDMENTS
Section 12.01. These By-Laws may be amended or altered by a vote of
the majority of the whole Board of Directors at any meeting provided that notice
of such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is subject
to the power of the shareholders to change or repeal such By-Laws by a majority
vote of the shareholders present or represented at any annual meeting or at any
special meeting of shareholders called for such purpose. The Board of Directors
shall not make or alter any By-Laws fixing their qualifications,
classifications, term of office, or number, except that the Board of Directors
may make or alter any By-Law to increase their number.
ARTICLE XIII
INDEMNIFICATION
No indemnification shall be made by the corporation that is
inconsistent with the guidelines set forth in Investment Company Act Releases
No. 7221 (June 9, 1972) and No. 11330 (September 2, 1980) or, if such releases
are modified, superseded or rescinded, the guidelines set forth in any successor
releases regarding indemnification under Section 17(h) of the Investment Company
Act of 1940, as now enacted or hereafter amended.
M1:0048163.01
<PAGE>
AMENDED INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT, made this ____ day of ______, 1995, by and between The
Jundt Growth Fund, Inc., a Minnesota corporation (the "Fund") and Jundt
Associates, Inc., a Minnesota corporation (the "Adviser").
1. INVESTMENT ADVISORY SERVICES
The Fund hereby engages the Adviser, and the Adviser hereby agrees to act
as investment adviser for, and to manage the affairs, business and the
investment of the assets of the Fund.
The investment of the assets of the Fund shall at all times be subject to
the applicable provisions of the Articles of Incorporation, By-Laws,
Registration Statement on Form N-1A and any representations contained in the
Prospectus of the Fund and shall conform to the policies and purposes of the
Fund as set forth in such Registration Statement and Prospectus and (i) as
interpreted from time to time by the Board of Directors of the Fund and (ii) as
may be amended from time to time by the Board of Directors and/or the
shareholders of the Fund as permitted by the Investment Company Act of 1940, as
amended. Within the framework of the investment policies of the Fund, the
Adviser shall have the sole and exclusive responsibility for the management of
the Fund's assets and making and execution of all investment decisions for the
Fund. The Adviser shall report to the Board of Directors of the Fund regularly
at such times and in such detail as the Board may from time to time determine to
be appropriate, in order to permit the Board to determine the adherence of the
Adviser to the investment policies of the Fund.
The Adviser shall, at its own expense, furnish the Fund with suitable
office space, and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund. The Adviser shall arrange, if requested
by the Fund, for officers, employees or other Affiliated Persons (as defined in
Section 2(a)(3) of the Investment Company Act of 1940, as amended and the rules,
regulations and releases relating thereto) of the Adviser to serve without
compensation from the Fund as directors, officers, or employees of the Fund if
duly elected to such positions by the shareholders or directors of the Fund.
The Adviser hereby acknowledges that all records necessary in the operation
of the Fund, including records pertaining to its shareholders and investments,
are the property of the Fund, and in the event that a transfer of management or
investment advisory services to someone other than the Adviser
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should ever occur, the Adviser will promptly, and at its own cost, take all
steps necessary to segregate such records and deliver them to the Fund.
2. COMPENSATION FOR SERVICES
In payment for all services, facilities, equipment and personnel, and for
other costs of the Adviser hereunder, the Fund shall pay to the Adviser a
monthly investment advisory fee determined by applying the annual rate of 1.00%
to the Fund's average daily net assets.
For purposes of the calculation of such fee, the Fund's net assets shall be
computed at the times and in the manner specified in the Fund's Registration
Statement on Form N-1A. Such fee shall be payable on the fifth day of each
calendar month for service performed hereunder during the preceding month. Such
fee shall commence upon conversion of the Fund to an open-end management
investment company. If the Fund's conversion to an open-end management
investment company occurs after the beginning of a month or this Agreement
terminates prior to the end of a month, such fee shall be prorated according to
the proportion which such portion of the month bears to the full month.
3. ALLOCATION OF EXPENSES
(a) In addition to the fees described in Section 2 hereof, the Fund shall
pay all its expenses which are not assumed by the Adviser in its capacity as the
Fund's investment adviser. These Fund expenses include, by way of example, but
not by way of limitation, (a) brokerage and commission expenses; (b) interest
charges on borrowings; (c) fees and expenses of legal counsel and independent
auditors; (d) the Fund's organizational and offering expenses, whether or not
advanced by the Adviser; (e) Federal, state, local and foreign taxes, including
issue and transfer taxes incurred by or levied on the Fund; (f) cost of
certificates representing common shares of the Fund and any other expenses
(including clerical expenses) of issuance, sale or repurchase of the common
shares of the Fund; (g) association membership dues; (h) fees and expenses of
registering the Fund's shares under the appropriate Federal securities laws and
of qualifying the Fund's shares under applicable state securities laws;
(i) expenses of printing and distributing reports, notices and proxy materials
to shareholders; (j) costs of annual and special shareholders' meetings;
(k) expenses of filing reports and other documents with governmental agencies;
(l) charges and expenses of the Fund's Administrator, custodian and registrar,
transfer agent and dividend disbursing agent; (m) expenses of disbursing
dividends and distributions; (n) compensation of the Fund's officers, directors
and employees that are not Affiliated Persons or Interested Persons (as defined
in Section 2(a) of the
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Investment Company Act of 1940, as amended and the rules, regulations and
releases relating thereto) of the Adviser; (o) the cost of other personnel
providing services to the Fund; (p) travel expenses for attendance of Board
of Directors meetings by all members of the Board of Directors of the Fund;
(q) insurance expenses; (r) costs of stationery and supplies; and (s) any
extraordinary expenses of a nonrecurring nature.
(b) Notwithstanding the foregoing, if the aggregate expenses incurred by,
or allocated to, the Fund in any fiscal year shall exceed the expense
limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Adviser shall reimburse the Fund for such excess, provided that
Adviser's reimbursement obligation will be limited to the amount of fees it
receives from the Fund during the period in which such expense limitations were
exceeded, unless otherwise required by applicable laws or regulations. With
respect to portions of a fiscal year in which this contract shall be in effect,
the foregoing limitations shall be prorated according to the proportion which
that portion of the fiscal year bears to the full fiscal year. Any payments
required to be made by this Paragraph 3(b) shall be made once a year promptly
after the end of the Fund's fiscal year.
4. FREEDOM TO DEAL WITH THIRD PARTIES
The Adviser shall be free to render services to others similar to those
rendered under this Agreement or of a different nature except as such services
may conflict with the services to be rendered or the duties to be assumed
hereunder.
5. EFFECTIVE DATE, DURATION AND TERMINATION OF AGREEMENT
This Agreement shall become effective upon conversion of the Fund to an
open-end management investment company (the "Effective Date"). Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding shares of the Fund shall mean the vote of 67% or more of such
shares if the holders of more than 50% of such shares are present in person or
by proxy or the vote of more than 50% of such shares, whichever is less.
Unless sooner terminated as hereinafter provided, this Agreement shall
continue in effect through August 15, 1995, and thereafter shall continue in
effect for successive periods of 12 months thereafter, provided that each
continuance is specifically approved annually by (a) the vote of a majority of
the Fund's Board of Directors who are not parties to the Agreement or interested
persons (as defined in the Investment Company Act of 1940, as amended and the
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rules, regulations and releases relating thereto), cast in person at a meeting
called for the purpose of voting on approval and (b) either (i) the vote of a
majority of the outstanding voting securities of the Fund or (ii) the vote of a
majority of the Fund's Board of Directors.
This Agreement may be terminated at any time without the payment of any
penalty by the vote of the Board of Directors of the Fund or by the vote of the
holders of a majority of the outstanding shares of the Fund, upon sixty (60)
days written notice to the Adviser. The Adviser may terminate this Agreement
without penalty on ninety (90) days written notice to the Fund. This Agreement
shall automatically terminate in the event of its assignment as defined in the
Investment Company Act of 1940 and the rules thereunder. This Agreement shall
automatically terminate upon completion of the dissolution, liquidation and
winding up of the Fund.
6. LIMITATION OF LIABILITY
The Adviser will not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund or its shareholders in connection with the
performance of its duties under this Agreement, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its duties under
this Agreement.
7. AMENDMENTS TO AGREEMENT
No material amendment to this Agreement shall be effective until approved
by vote of the holders of a majority of the outstanding shares of the Fund.
8. NOTICES
Any notice under this Agreement shall be in writing, addressed, delivered
or mailed, postage prepaid, to the other party at such address as such other
party may designate in writing for receipt of such notice.
9. NAME
The Fund may use "Jundt" as part of its name for so long as the Adviser
serves as investment adviser to the Fund. The Adviser may at any time permit
others, including companies registered under the Investment Company Act of 1940,
as amended, to use the name "Jundt".
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IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
THE JUNDT GROWTH FUND, INC.
By: ____________________________
Its: ___________________________
JUNDT ASSOCIATES, INC.
By: ____________________________
Its: ___________________________
5
<PAGE>
DISTRIBUTION AGREEMENT
THIS AGREEMENT, made this 4th day of December, 1995, by and between
The Jundt Growth Fund, Inc., a Minnesota corporation (the "Fund"), and U.S.
Growth Investments, Inc., a Minnesota corporation (the "Distributor").
W I T N E S S E T H:
1. DISTRIBUTION SERVICES. The Fund hereby engages the
Distributor, and the Distributor hereby agrees to act, as principal
underwriter for the Fund in the sale and distribution to the public of the
Fund's shares of common stock, $.01 par value (the "Shares"), either through
dealers or otherwise. The Distributor agrees to offer such Shares for sale
at all times when such Shares are available for sale and may lawfully be
offered for sale and sold. The Shares may be offered in one or more classes
(each a "Class") in accordance with Rule 18f-3 under the Investment Company
Act of 1940, as amended (the "1940 Act"). The classes currently authorized
are Class A, Class B, Class C and Class D.
2. SALE OF FUND SHARES. Such Shares are to be sold only on the
following terms:
(a) All subscriptions, offers or sales shall be subject to acceptance
or rejection by the Fund. Any offer or sale shall be conclusively presumed
to have been accepted by the Fund if the Fund shall fail to notify the
Distributor of the rejection of such offer or sale prior to the computation
of the net asset value of the shares next following receipt by the Fund of
notice of such offer and sale.
(b) No Share shall be sold by the Fund for any consideration other
than cash or for any amount less than the net asset value of such Share,
computed as provided in the currently effective prospectus of the Fund (the
"Net Asset Value"). All Shares sold by the Distributor shall be sold at
the public offering price, as hereinafter defined, provided that the
Distributor may allow, or sell at, a discount from said public offering
price to broker-dealers that have entered into sales agreements with the
Distributor, which discount shall be no greater than the applicable sales
load or charge.
(c) The public offering price of the Shares shall be the Net Asset
Value thereof next determined following receipt of an order by the
Distributor plus any applicable sales load or charge. The sales load or
<PAGE>
charge may be an initial charge of a percentage of the public offering
price or a contingent deferred sales charge upon redemption of Shares
within specified periods of purchase, as set forth in Fund's current
prospectus and specifically approved by the Board of Directors of the Fund.
(d) Any applicable sales loads or charges may, at the discretion of
the Fund and the Distributor, be reduced or eliminated as permitted by the
1940 Act and the rules and regulations thereunder, as they may be amended
from time to time, provided that such reduction or elimination shall be set
forth in the currently effective prospectus for the Fund, and provided that
the Fund shall in no event receive for any Shares sold an amount less than
the Net Asset Value thereof.
3. INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS. The Fund may extend
to its shareholders the right to purchase Shares of any Class at the Net Asset
Value thereof with the proceeds of any dividend or capital gain distribution
paid or payable with respect to Shares of such Class.
4. REGISTRATION OF SHARES. The Fund agrees to make prompt and
reasonable efforts to effect and keep in effect, at its own expense, the
registration or qualification of its Shares for sale in such jurisdictions as
the Fund may designate.
5. INFORMATION TO BE FURNISHED TO DISTRIBUTOR. The Fund agrees that
it will furnish the Distributor with such information with respect to the
affairs and accounts of the Fund as the Distributor may from time to time
reasonably require, and further agrees that the Distributor, at all reasonable
times, shall be permitted to inspect the books and records of the Fund.
6. ALLOCATION OF EXPENSES. During the period of this Agreement, the
Fund shall pay or cause to be paid all expenses, costs and fees incurred by the
Fund which are not assumed by the Distributor or Jundt Associates, Inc. (the
"Adviser"). The Distributor shall pay all costs of distributing the Shares,
including, but not limited to, (a) compensation paid to broker-dealers,
including the Distributor and its registered representatives, for their sales of
Shares, including the payment of trailer commissions and the implementation of
various incentive programs with respect to broker-dealers, banks and other
financial institutions; (b) compensation paid to banks and other institutions
for providing administrative and accounting services with respect to the Fund's
shareholders; (c) other advertising and promotional expenses in connection with
the distribution of Shares; and (d) other distribution-related costs as set
forth in the Plans of Distribution adopted by the Fund with respect to the
Class B Shares, Class C Shares and Class D Shares (collectively, the "Rule 12b-1
Plans" or the
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"Plans"); provided that the Adviser, rather than the Distributor, may bear
the expenses referred to in this sentence, but the Distributor shall be
primarily liable for such expenses until paid.
7. COMPENSATION TO DISTRIBUTOR. As compensation for all of its
services provided and its costs assumed under this Agreement, the Distributor
shall receive such front-end sales charges, contingent deferred sales charges,
and fees payable pursuant to Rule 12b-1 Plans, all as described in the Fund's
current prospectus, as amended and supplemented from time to time.
8. LIMITATION OF DISTRIBUTOR'S AUTHORITY. The Distributor shall be
deemed to be an authorized independent contractor and, except as specifically
provided or authorized herein, shall have no authority to act for or represent
the Fund.
9. SUBSCRIPTION FOR SHARES; REFUND FOR CANCELED ORDERS. The
Distributor shall subscribe for the Shares of the Fund only for the purpose of
covering purchase orders already received by it or for the purpose of investment
for its own account. In the event that an order for the purchase of Shares is
placed with the Distributor by a customer or dealer and subsequently canceled,
the Distributor shall forthwith cancel the subscription for such Shares entered
on the books of the Fund and, if the Distributor has paid the Fund for such
Shares, shall be entitled to receive from the Fund in refund of such payment the
lesser of:
(a) the consideration received by the Fund for said Shares; or
(b) the Net Asset Value of such Shares at the time of cancellation by
the Distributor.
10. INDEMNIFICATION OF FUND. The Distributor agrees to indemnify the
Fund against any and all litigation and other legal proceedings of any kind or
nature and against any liability, judgment, cost or penalty imposed as a result
of such litigation or proceedings in any way arising out of or in connection
with the sale or distribution of the Shares of the Fund by the Distributor. In
the event of the threat or institution of any such litigation or legal
proceedings against the Fund, the Distributor shall defend such action on behalf
of the Fund at its own expense, and shall pay any such liability, judgment, cost
or penalty resulting therefrom, whether imposed by legal authority or agreed
upon by way of compromise and settlement; provided, however, that the
Distributor shall not be required to pay or reimburse the Fund for any
liability, judgment, cost or penalty incurred as a result of an omission to
supply information by the Fund to the Distributor, or to the Distributor by a
director, officer or employee of the
3
<PAGE>
Fund who is not an Interested Person of the Distributor (as defined in
Section 2(a)(19) of the 1940 Act and the rules, regulations and releases
relating thereto), unless the information so supplied or omitted was
available to the Distributor or the Fund's investment adviser without
recourse to the Fund or any such Interested Person of the Fund.
11. FREEDOM TO DEAL WITH THIRD PARTIES. The Distributor shall be
free to render to others services of a nature either similar to or different
from those rendered under this Agreement, except such as may impair its
performance of the services and duties to be rendered by it hereunder.
12. EFFECTIVE DATE. This Agreement shall become effective upon
conversion of the Fund to an open-end management investment company. Wherever
referred to in this Agreement, the vote or approval of the holders of a majority
of the outstanding Shares of the Fund or of a Class of Shares shall mean the
vote of 67% or more of such Shares if the holders of more than 50% of such
Shares are present in person or by proxy or the vote of more than 50% of such
Shares, whichever is less.
13. DURATION. Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect from year to year but only so long as such
continuance is specifically approved at least annually either (a) by the Board
of Directors of the Fund, including the specific approval of a majority of the
directors who are not Interested Persons of the Fund or of the Distributor and
who have no direct or indirect financial interest in the operation of the Plans,
or in any agreements relating to the Plans, cast in person at a meeting called
for the purpose of voting on such approval; or (b) by the vote of the holders of
a majority of the outstanding Shares of the Fund, provided that, if a majority
of the outstanding Shares of any Class approves this Agreement, this Agreement
shall continue in effect with respect to such approving Class whether or not the
shareholders of any other Class of the Fund have approved this Agreement.
14. TERMINATION. This Agreement may be terminated at any time
without the payment of any penalty by the vote of a majority of the members of
the Board of Directors of the Fund who are not Interested Persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plans or in any agreements relating to the Plans, or by the Distributor, upon
not more than 60 days' written notice to the other party. This Agreement may be
terminated with respect to a particular Class at any time without the payment of
any penalty by the vote of the holders of a majority of the outstanding Shares
of such Class, upon 60 days' written notice to the Distributor. This Agreement
shall automatically terminate in the event of its assignment.
4
<PAGE>
15. AMENDMENTS TO AGREEMENT. No material amendment to this Agreement
shall be effective until approved by the Distributor and by the vote of a
majority of the Board of Directors of the Fund who are not Interested Persons of
the Distributor.
16. NOTICES. Any notices under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for the receipt of such
notice.
5
<PAGE>
IN WITNESS WHEREOF, the Fund and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
THE JUNDT GROWTH FUND, INC.
By_____________________________________
Its___________________________________
U.S. GROWTH INVESTMENTS, INC.
By_____________________________________
Its___________________________________
6
<PAGE>
SELECTED DEALER AGREEMENT
Ladies and Gentlemen: _____________, 199_
We, U.S. Growth Investments, Inc., a Minnesota corporation, have entered
into a distribution agreement with each registered, open-end management
investment company, or series thereof, set forth on EXHIBIT A hereto
(collectively, the "FUNDS") pursuant to which we act as distributor and
principal underwriter of each Fund's shares (the "SHARES").
1. THE OFFERING. The Shares will be offered continuously in
accordance with the terms and conditions set forth in each Fund's Prospectus
and Statement of Additional Information, as most currently amended or
supplemented (referred to hereinafter, together, as the applicable Fund's
"PROSPECTUS").
2. AUTHORIZED DEALERS. Pursuant to the distribution agreement between
each Fund and us, we have agreed to use our best efforts to enter into
arrangements with selected securities dealers to solicit from the public
orders to purchase Shares. You are hereby invited to become one of such
securities dealers (each such securities dealer, an "AUTHORIZED DEALER").
This will confirm our mutual agreement as to the terms and conditions
applicable to your participation as an Authorized Dealer, such agreement to
be effective on your confirmation hereof. You understand (a) that we may, at
any time at our option, also act as an Authorized Dealer, (b) that we are
seeking to enter into this Agreement in counterparts with you and certain
other securities dealers, which also may act as Authorized Dealers, (c) that,
except as we may otherwise agree with you, we may enter into agreements
(which may or may not be the same as this Agreement) with Authorized Dealers,
(d) that each Fund and we may modify, suspend, terminate or withdraw entirely
the offering of Shares at any time without giving notice to you pursuant to
Section 11 and without incurring any liability or obligation to you, (e) that
we may upon notice change the public offering price, sales load, or dealer
allowance or modify, cancel or change the terms of this Agreement, and (f) we
shall be under no liability to you except for lack of good faith and for
obligations expressly assumed by us herein. All purchases of Shares from,
and redemptions of Shares by, the applicable Fund shall be effected through
us acting as principal underwriters on behalf of the applicable Fund. (You
understand that we shall have no obligation to sell Shares to you at such
times as we are not acting as distributor and principal underwriter for the
applicable Fund.)
3. ROLE OF AUTHORIZED DEALERS. (a) As an Authorized Dealer, you
shall have no obligation to purchase or sell or to solicit the purchase or
sale of Shares. As, when and if you determine to purchase Shares or you
receive a customer order for the purchase of Shares and you determine to
accept such order, you shall comply with the procedures for the purchase of
Shares set forth in the applicable Fund's Prospectus. The procedure relating
to the handling of orders shall be subject to such further instructions as we
shall forward to you in writing from time to time.
(b) You agree to offer Shares to the public at the applicable public
offering price and subject to the minimum investment amount set forth in the
applicable Fund's Prospectus, subject to any waivers or reductions of sales
loads and dealer allowances described in the applicable Prospectus (as
amended or supplemented from time to time). Any amendment or supplement to
the applicable Prospectus which affects the sales load, dealer allowances,
waivers or discounts shall not affect sales load, dealer allowances,
discounts or waivers with respect to sales on which orders have been accepted
by us prior to the date of such amendment. Your placement of an order for
Shares after the date of any such amendment shall
<PAGE>
conclusively evidence your agreement to be bound thereby. We shall make a
reasonable effort to notify you of any redetermination or suspension of the
public offering price, but we shall be under no liability for failure to do
so. Reduced sales loads may also be available as a result of a cumulative
discount or pursuant to a statement of intent as set forth in the Prospectus.
You agree to advise us promptly as to the amounts of any sales made by you
to the public qualifying for reduced sales loads.
(c) You agree to purchase Shares from us only to cover purchase orders
already received from your customers, or for your own bona fide investment.
You will not withhold placing with us orders received from your customers so
as to profit yourself as a result of such withholding. All orders for Shares
are subject to acceptance or rejection by us or the applicable Fund in the
sole discretion of either.
(d) In purchasing Shares through us, you shall rely solely on the
representations contained in the applicable Fund's Prospectus and the
applicable Fund's registration statement (as most recently amended, the
"REGISTRATION STATEMENT") relating to the Shares. You will not furnish to
any person any information relating to the Shares, the applicable Fund or us
that is inconsistent with information contained in the Prospectus, the
Registration Statement or any printed information issued by the Fund or us as
information supplemental to such Prospectus or cause any advertisement to be
published or posted in any public place without our prior written consent or
the prior written consent of the applicable Fund.
(e) In all sales of Shares to the public, you shall act as dealer for
your own account, whether as agent or principal. Nothing herein shall be
deemed to constitute you or any other Authorized Dealer as agent for the
Fund, us, or any other Authorized Dealer. You agree not to act as our agent
and not to claim to act as our agent or as agent of any of the foregoing.
You agree to buy Shares only through us and not from any other sources and to
sell Shares only to us, as the applicable Fund's redemption agent, and not to
any other purchasers.
(f) You agree that we shall have full authority to act upon your
express instructions to redeem or exchange Shares through us on behalf of
your customers under the terms and conditions provided in the applicable
Fund's Prospectus. You agree to hold us harmless as a result of any action
taken with respect to authorized redemptions or exchanges upon your express
instructions.
(g) If any Shares confirmed to you under the terms of this Agreement
are redeemed by the issuing Fund or by us as agent for the Fund, or are
tendered for redemption, within seven business days after the date of our
confirmation of the original purchase order, you shall forthwith refund to us
the full discount, commission, finder's fee or other concession, if any,
allowed or paid to you on such Shares.
(h) You understand and acknowledge that each Fund offers its Shares in
multiple classes, each subject to differing sales charges and financing
structures. You hereby represent and warrant that you have established
compliance procedures designed to ensure that your customers are made aware
of the terms of each available class of the applicable Fund's Shares, to
ensure that each customer is offered only Shares that are suitable
investments of that customer and to ensure proper supervision of your
registered representatives in recommending and offering multiple classes of
Shares to your customers.
(i) You understand and acknowledge that certain Shares may be subject
to a contingent deferred sales charge when such shares are redeemed. As to
such Shares, you agree either (A) to refrain from issuing such Shares in
street name, or (B) to monitor the time period during which the applicable
contingent deferred sales charges remains in effect, to deduct from any
redemption proceeds the applicable contingent deferred sales charges and to
promptly remit to us any such contingent deferred sales charges.
-2-
<PAGE>
4. COMPENSATION. You shall be entitled to receive such dealer
allowances, concessions, finder's fees and other compensation as are payable
to Authorized Dealers, generally, or to you or to certain specified
Authorized Dealers, specifically, as described and set forth in each
applicable Fund's Prospectus. You acknowledge that each Prospectus may set
forth a description of waivers or reduction of applicable sales loads and
dealer allowances in certain cases. In remitting the proceeds of any
investment in Shares to us or our agent (as provided herein), you are hereby
authorized to deduct from any such remittance the dealer allowance or
finder's fee applicable to the investment to which you are entitled (as
provided in the applicable Fund's Prospectus). As to any payments to be made
to you pursuant to any Rule 12b-1 plans adopted by the Funds, we shall remit
such amounts to you on a [quarterly] basis within [____] business days
following the end of the calendar quarter to which such payments relate;
provided, however, that no such Rule 12b-1 payments shall be due to you
unless and until we receive such payments from the applicable Fund.
5. ORDERS AND PAYMENT FOR SHARES. Payment for the Shares ordered from
us shall be made in Federal Funds and must be received by the Funds' agent,
[Norwest Bank Minnesota, N.A.], within three business days of a receipt and
acceptance by us of an order. If payment in Federal Funds is not received
within three business days after the execution of the order, we reserve the
right, without any notice, to cancel the sale and to hold you responsible for
any loss, including loss of profits, suffered by us or by the applicable Fund
resulting from such failure.
6. BLUE SKY AND OTHER QUALIFICATIONS. The Funds have registered an
indefinite number of Shares under the Securities Act of 1933. In addition,
the Funds intend to register or qualify in certain states where registration
or qualification is required. We will inform you as to the states or other
jurisdictions in which we believe the Shares have been qualified for sale
under, or exempt from the requirements of, the respective securities laws of
such states. You agree that you will offer Shares to your customers only in
those states where such Shares have been registered, qualified, or an
exemption is available. We assume no responsibility or obligation as to your
right to sell Shares in any jurisdiction.
7. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS. You represent and
warrant to and undertake that:
(a) You are familiar with all applicable federal and state
securities laws, rules and regulations relating to the distribution
and delivery of prospectuses and agree that you will comply
therewith. You agree to deliver thereafter to any purchaser whose
Shares you are holding as record holder copies of the annual and
interim reports and proxy solicitation materials relating to the
Shares. You further agree to make reasonable efforts to endeavor to
obtain proxies from such purchasers whose Shares you are holding as
record holder. Additional copies of each applicable Fund's
Prospectus, annual or interim reports and proxy solicitation
materials will be supplied to you as you reasonably request.
(b) You are a member in good standing of the National Association
of Securities Dealers, Inc. (the "NASD") or, if you are not such a
member, you are a foreign bank, dealer or institution not eligible
for membership in the NASD which agrees to make no sales within the
United States, its territories or its possessions or to persons who
are citizens thereof or residents therein, and in making other sales
to comply, as though you were a member of NASD, with the provisions
of Sections 8, 24 and 36 of Article III of the Rules of Fair Practice
of the NASD and with Section 25 thereof as that Section applies to a
non-NASD member broker or dealer in a foreign country.
-3-
<PAGE>
(c) You undertake to comply with respect to your offering of
Shares to the public pursuant to this Agreement with all applicable
provisions of the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, and the Investment Company Act of
1940, as amended, and the rules and regulations thereunder and with
the applicable rules of the NASD.
8. TERMINATION. Either party to this Agreement may cancel this
Agreement by written notice to the other party. Such cancellation shall be
effective upon receipt of such notice.
9. REPRESENTATION TO SURVIVE. The agreements, representations,
warranties and other statements set forth in or made pursuant to this
Agreement will remain in full force and effect, to the extent permitted by
applicable law, regardless of any investigation made by or on behalf of us or
any Authorized Dealer. The provisions of Section 7 and 9 of this Agreement
shall survive the offer and sales of the Shares, to the extent permitted by
applicable law, and the termination or cancellation of this Agreement.
10. INDEMNIFICATION. (a) We agree to indemnify, defend and hold you,
your several officers and directors, and any person who controls you with the
meaning of Section 15 of the Securities Act of 1933, as amended, free and
harmless from and against any and all claims, demands liabilities and
expenses (including reasonable costs of investigating and defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which you, your officers or directors, or any such
controlling person, may incur under the Securities Act of 1933, as amended,
or under common law or otherwise, arising out of or based upon (i) any breach
of any representation, warranty or covenant made by us herein, (ii) any
failure by us to perform our obligations as set forth herein, or (iii) any
untrue statement, or alleged untrue statement, of a material fact contained
in any Registration Statement or any Prospectus, or arising out of or based
upon any omission, or alleged omission, to state a material fact required to
be stated in either any Registration Statement or any Prospectus, or
necessary to make the statements in any thereof not misleading; provided,
however, that our agreement to indemnify you, your officers and directors,
and any such controlling person shall not be deemed to cover any claims,
demands, liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in any
Registration Statement or Prospectus in reliance upon and in conformity with
information furnished to us or the applicable Fund by you for use in the
preparation thereof.
(b) You agree to indemnify, defend and hold us and our several officers
and directors, and each Fund and its several officers and directors or
trustees, and any person who controls you and/or each Fund within the meaning
of Section 15 of the Securities Act of 1933, as amended, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including reasonable costs of investigating and defending such claims,
demands or liabilities and any reasonable counsel fees incurred in connection
therewith) which we and our several officers and directors, or the applicable
Fund and its officers and directors or trustees, or any such controlling
person, may incur under the Securities Act of 1933, as amended, or under
common law or otherwise, arising out of or based upon (i) any breach of any
representation, warranty or covenant made by you herein, or (ii) any failure
by you to perform your obligations as set forth herein, or (iii) any untrue,
or alleged untrue, statement of a material fact contained in the information
furnished by you to us or any Fund for use in such Fund's Registration
Statement or Prospectus, or used in the answers to any of the items of the
Registration Statement or in the corresponding statements made in the
Prospectus, or arising out of or based upon any omission, or alleged
omission, to state a material fact in connection with such information
furnished by you to us or the applicable Fund and required to be stated in
such answers or necessary to make such information not misleading.
-4-
<PAGE>
(c) Each party's agreement to indemnify the other (and its respective
officers, directors and controlling persons, as aforesaid) is expressly
conditioned upon the indemnifying party being notified of any action brought
against any person entitled to indemnification hereunder, such notification
to be given by letter or by telex, telegram, fax or similar means of same day
delivery received by the indemnifying party at the address to which notices
are to be sent hereunder within seven (7) days after the summons or other
first legal process shall have been served. The indemnifying party shall
have the right to control the defense of such action, with counsel of its own
choosing (provided such counsel is reasonably satisfactory to the person
seeking indemnification). The failure so to notify the indemnifying party as
specified herein shall not relieve the indemnifying party from any liability
which such party may have to the person claiming indemnification, otherwise
than on account of the indemnifying party's agreement contained in this
Section 10. This Section 10 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any person
entitled to indemnification hereunder and shall survive the delivery of any
Shares and termination of this Agreement. The agreements to indemnify
contained herein shall inure exclusively to the benefit of the persons
entitled to indemnification pursuant to this Agreement and their respective
estates, successors and assigns.
11. NOTICES. Notices hereunder shall be deemed to have been duly given
if delivered by hand or facsimile (a) if to you, at your address or facsimile
number set forth below and (b) if to us, to U.S. Growth Investments, Inc.,
1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota 55416, or, in each
case, such other address as may be notified to the other party.
12. AMENDMENTS. We may modify this Agreement at any time by written
notice to you. The first order placed by you subsequent to the giving of
such notice shall be deemed acceptance by you of the modification described
in such notice.
13. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
14. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the then existing NASD Code of Arbitration Procedure. Any
arbitration shall be conducted in Minneapolis, Minnesota, and each arbitrator
shall be from the securities industry. Judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
-5-
<PAGE>
Please confirm your agreement by signing and returning to us the two
enclosed duplicate copies of this Agreement. Upon our acceptance hereof, the
Agreement shall constitute a valid and binding contract between us. After
our acceptance, we will deliver to you one fully executed copy of this
Agreement.
Confirmed: ___________, 199 U.S. GROWTH INVESTMENTS, INC.
By: _______________________________
___________________________________ Its: ______________________________
(Name of Authorized Dealer)
By: _______________________________
(Authorized Signature)
___________________________________
Printed name of person signing
___________________________________
Title of person signing
___________________________________
Street Address
___________________________________
City State Zip
___________________________________
Fax No.
___________________________________
Telephone No.
___________________________________
Telex No.
___________________________________
Firm Taxpayer Identification No.
-6-
<PAGE>
EXHIBIT A
TO THE
SELECTED DEALER AGREEMENT
The following listing constitutes the Funds for which U.S. Growth
Investments, Inc. serves as distributor and principal underwriter and which are
offered for sale to the Authorized Dealer and its customers:
The Jundt Growth Fund, Inc. -- Class A Shares*
The Jundt Growth Fund, Inc. -- Class B Shares
The Jundt Growth Fund, Inc. -- Class C Shares
The Jundt Growth Fund, Inc. -- Class D Shares
Jundt U.S. Emerging Growth Fund -- Class B Shares
Jundt U.S. Emerging Growth Fund -- Class C Shares
Jundt U.S. Emerging Growth Fund -- Class D Shares
- ---------------------
* Class A Shares of The Jundt Growth Fund, Inc. are available only to certain
investors and are not otherwise generally available for sale to the public.
See the Fund's Prospectus for details.
<PAGE>
CUSTODIAN CONTRACT
between
JUNDT GROWTH FUND, INC.
and
NORWEST BANK MINNESOTA, N.A.
- 1 -
<PAGE>
TABLE OF CONTENT5
PAGE
1. Employment of Custodian and Property to be Held by It 1
2. Duties of the Custodian with Respect to Property of the
Fund Held by the Custodian 1
2.1 Holding Securities 1
2.2 Delivery of Securities 2
2.3 Registration of Securities 4
2.4 Bank Accounts 4
2.5 Payments for Shares 5
2.6 Availability of Federal Funds 5
2.7 Collection of Income 5
2.8 Payment of Fund Monies 6
2.9 Liability for Payment in Advance of Receipt of
Securities Purchased 7
2.10 Payments for Repurchases or Redemptions of Shares
of the Fund 7
2.11 Appointment of Agents 8
2.12 Deposit of Fund Assets in Securities System 8
2.13 Segregated Account 10
2.14 Ownership Certificates for Tax Purposes 1l
2.15 Proxies 11
2.16 Communications Relating to Fund Portfolio Securities 11
2.17 Proper Instructions 12
2.18 Actions Permitted Without Express Authority 12
2.19 Evidence of Authority 12
3. Duties of Custodian With Respect to the Books of
Account and Calculation of Net Asset Value and Net Income 13
4. Records 13
5. Opinion of Fund"s Independent Accountants 14
6. Reports to Fund by Independent Public Accountants 14
7. Compensation of Custodian 14
8. Responsibility of Custodian 14
9. Effective Period, Termination and Amendment 15
10. Successor Custodian 16
11. Interpretive and Additional Provisions 17
12. Minnesota Law to Apply 17
13. Prior Contracts 17
- 2 -
<PAGE>
CUSTODIAN CONTRACT
This Contract between Jundt Associates, Inc. a corporation organized and
existing under the laws of Minnesota, having its principal place of business at
1550 Utica Avenue South, Suite 950, Minneapolis, MN 55416, hereinafter called
the Fund, and Norwest Bank Minnesota, N.A., a National Banking Association,
having its principal place of business at Sixth and Marquette, Minneapolis,
Minnesota, 55479, hereinafter called the "Custodian",
WITNESSETH, that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1 EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Articles of Incorporation. The Fund agrees
to deliver to the Custodian all securities and cash owned by it, and all
payments of income, payments of principal or capital distributions received by
it with respect to all securities owned by the Fund from time to time, and the
cash consideration received by it for such new or treasury shares of capital
stock ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or
received by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.17), the Custodian shall from time to time employ one or more sub-custodians,
but only in accordance with an applicable vote by the Board of Directors of the
Fund, and provided that the Custodian shall have no more or less responsibility
or liability to the Fund on account of any actions or omissions of any sub-
custodian so employed than any such sub-custodian has to the Custodian.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE
CUSTODIAN
2.1 HOLDING SECURITIES.
The Custodian shall hold and physically segregate for the account of the
Fund all non-cash property, including all securities owned by the Fund, other
than (a) securities which are maintained pursuant to Section 2.12 in a clearing
agency which acts as a securities depository or in a book-entry
- 3 -
<PAGE>
system authorized by the U.S. Department of the Treasury, collectively referred
to herein as a "Securities System".
2.2 DELIVERY OF SECURITIES.
The Custodian shall release and deliver securities owned by the Fund held
by the Custodian or in a Securities System account of the Custodian only upon
receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following Cases:
1) Upon sale of such securities for the account of the -Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund:
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable, provided that,
in any such case, the cash or other consideration is to be delivered
to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of the Custodian
or into the name or nominee name of any agent appointed pursuant to
Section 2.11 or into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a different
number of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; PROVIDED that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery "custom; provided that
in any such case, the Custodian shall have"no responsibility or
- 4 -
<PAGE>
liability for any loss arising from the delivery of such securities prior to
receiving payment for such securities except as may arise from the Custodian"s
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan or merger, consolidation,
recapitalization, reorganization or readjustment of the securities of the
issuer of such securities, or pursuant to provisions for conversion contained
in such securities, or pursuant to any deposit agreement; provided that, in any
such case, the new securities and cash, if any, are to be delivered to the
Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities or the
surrender of interim receipts of temporary securities for definitive
securities; provided that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the Fund,
BUT ONLY against receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Fund, which may be in the form of cash or
obligations issued by the -United States government, its agencies or
instrumentalities, except that in connection with any loans for which
collateral is to be credited to the Custodian"s account in the book-entry
system authorized by the U.S. Department of the Treasury, the Custodian will
not be held liable or responsible for the delivery of securities owned by the
Fund prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowings by the Fund
requiring a pledge of assets by the Fund, BUT ONLY against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any agreement among the
Fund, the Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 (the "Exchange Act") and a member of the National
Association of Securities Dealers, Inc. ("NASD"), relating to the compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar
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<PAGE>
organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission and/or any
Contract Market, or any similar organization or organizations,
regarding account deposits in connection with transactions by the
Fund;
14) Upon receipt of instructions from the transfer agent
("Transfer Agent") for the Fund, for delivery to such Transfer Agent
or to the holders of shares in connection with distributions in kind,
as may be described from time to time in the Fund"s currently
effective prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of Shares for
repurchase or redemptions; and
15) For any other proper corporate purpose, BUT ONLY upon receipt of,
in addition to Proper Instructions, a certified copy of a resolution
of the Board of Directors or of the Executive Committee signed by an
officer of the Fund and certified by the Secretary or an Assistant
Secretary, specifying the securities to the be delivered, setting
forth the purpose for which such delivery is to be made, declaring
such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such securities shall be made.
2.3 REGISTRATION OF SECURITIES.
Securities held by the Custodian (other than bearer securities) shall be
registered in the name of the Fund or in the name of any nominee of the Fund or
of any nominee of the Custodian which nominee shall be assigned exclusively to
the Fund, UNLESS the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered investment companies having
the same investment adviser as the Fund, or in the name of nominee name of any
agent appointed pursuant to Section 2.11 or in the name or nominee name of any
sub-custodian appointed pursuant to Article 1. All securities accepted by the
Custodian on behalf of the Fund under the terms of this Contract shall be in
"street name" or other good delivery form.
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<PAGE>
2.4 BANK ACCOUNTS
The Custodian shall open and maintain a separate bank account or accounts
in the name of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms :of this Contract, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
the account of the Fund, other than cash maintained by the Fund in a bank
account established and used in accordance with Rule 17f-3 under the Investment
Company Act of 1940. Funds held by the Custodian for the Fund may be deposited
by it to its credit as Custodian in the Banking Department of the Custodian or
in such other banks or trust companies as it may in its discretion deem
necessary or desirable; PROVIDED, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment Company
Act of 1940 and that each such bank or trust company and the funds to be
deposited with each such bank or trust company shall be approved by vote of a
majority of the Board of Directors of the Fund. Such funds shall be deposited
by the Custodian in its capacity as Custodian and shall be withdrawable by the
Custodian only in that capacity.
2.5 PAYMENTS FOR SHARES.
The Custodian shall receive from the distributor for the Fund"s Shares or
from the Transfer Agent of the Fund and deposit into the Fund"s account such
payments as are received for Shares of the Fund issued or sold from time to
time by the Fund. The Custodian will provide timely notification to the Fund
and the Transfer Agent of any receipt by it of payments for Shares of the Fund.
2.6 AVAILABILITY OF FEDERAL FUNDS.
Upon mutual agreement between the Fund and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions, make federal funds available to
the Fund as of specified times agreed upon from time to time by the Fund and
the Custodian in the amount of checks received in payment for Shares of the
Fund which are deposited into the Fund"s account.
2.7 COLLECTION OF INCOME.
The Custodian shall collect on a timely basis all income and other payments
with respect to registered securities held hereunder to which the Fund shall be
entitled either by law or pursuant to
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<PAGE>
custom in the securities business, and shall collect on a timely basis all
income and other payments with respect to bearer securities if, on the date of
payment by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to the Fund"s custodian
account. Without limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when due on
securities held hereunder. Income due the Fund on securities loaned pursuant
to the provisions of Section 2.2 (10) shall be the responsibility of the Fund.
The Custodian will have no duty or responsibility in connection therewith,
other than to provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Fund is properly entitled.
2.8 PAYMENT OF FUND MONIES.
Upon receipt of Proper Instructions, which may be continuing instructions
when deemed appropriate by the parties, the Custodian shall pay out monies of
the fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or
options on futures contracts for the account of the Fund but only (a)
against the delivery of such securities or evidence of title to such
options, futures contracts or options on futures contracts, to the
Custodian (or any bank, banking firm or trust company doing business
in the United States or abroad which is qualified under the
Investment Company Act of 1940 to act as a custodian and has been
designated by the Custodian as its agent for this purpose) registered
in the name of the Fund or in the name of a nominee of the Custodian
referred to in Section 2.3 hereof or in proper form for transfer; (b)
in the case of a purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.12 hereof or
(c) in the case of the repurchase agreements entered into between the
Fund and the Custodian, or another bank, or a broker-dealer which is
a member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian"s
account at the Federal Reserve Bank with
such securities or (ii) against delivery of the receipt evidencing
purchase by the Fund of
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<PAGE>
securities owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from the
Fund;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund
as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for the
account of the Fund: interest, taxes, management, accounting,
transfer agent and legal fees. and operating expenses of the Fund
whether or not such expenses are to be in whole or part capitalized
or treated as deferred expenses;
5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Board of Directors or of the Executive Committee of the Fund
signed by an officer of the Fund and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment, setting
forth the purpose for which such payment is to be made, declaring
such purpose to be a proper purpose, and naming the person or persons
to whom such payment is to be made.
2.9 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
In any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from the
Fund to so pay in advance, the Custodian shall be absolutely liable to the Fund
for such securities to the same extent as if the securities had been received
by the Custodian.
2.10 PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND.
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<PAGE>
From such funds as may be available for the purpose but subject to
the limitations of the Articles of Incorporation and any applicable votes of
the Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption-or repurchase of their Shares. In connection with the
redemption or repurchase of Shares of the fund, the Custodian is authorized
upon receipt of instructions from the Transfer agent to wire funds to or
through a commercial bank designated by the redeeming shareholders. In
connection with the redemption or repurchase of Shares of the Fund, the
Custodian shall honor checks drawn on the Custodian by a holder of Shares,
which checks have been furnished by the Fund to the holder of Shares, when
presented to the Custodian in accordance with such procedures and controls as
are mutually agreed upon from time to time between the Fund and the Custodian.
2.11 APPOINTMENT OF AGENTS.
The Custodian may at any time or times in its discretion appoint -(and may
at any time remove) any other bank or trust company which is itself qualified
under the Investment Company Act of 1940 to act as a custodian, as its agent to
carry out such of the provisions of this Article 2 as the Custodian may from
time to time direct; PROVIDED, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities hereunder.
2.12 DEPOSIT OF FUND ASSETS IN SECURITIES SYSTEMS.
The Custodian may deposit and/or maintain securities owned by the Fund in
a clearing agency registered with the Securities and Exchange commission under
Section 17A of the Exchange Act, which acts as a securities -depository, or in
the book-entry system authorized by the U.S. Department of the Treasury and
certain federal agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an account
("Account") of the Custodian in the Securities System which shall not
include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
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<PAGE>
2) The records of the Custodian with respect to securities of
the Fund which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Account, and (ii)
the making of an entry on the records of the Custodian to reflect
such payment and transfer for the account of the Fund. The Custodian
shall transfer securities sold for the account of the Fund upon (i)
receipt of advice from the Securities System that payment for such
securities has been transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such transfer
and payment for the account of the Fund. Copies of all advises from
the Securities System of transfers of securities for the account of
the Fund shall identify the Fund, be maintained for the Fund by the
Custodian and be provided to the Fund at its request. Upon request,
the Custodian shall furnish the Fund confirmation of each transfer to
or from the account of the Fund in the form of a written advice or
notice and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transactions in the Securities System
for the account of the Fund.
4) The Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of the
Custodian or any such agent to enforce effectively such rights as it
may have against the Securities System; at the election of the Fund,
it shall be entitled to be subrogated to the rights of
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<PAGE>
the Custodian with respect to any claim against the Securities System
or any other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Fund has not
been made whole for any such loss or damage.
2.13 SEGREGATED ACCOUNT.
The Custodian shall upon receipt of Proper Instructions establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to Section 2.12
hereof, (i) in accordance with the provisions of any agreement among the Fund,
the Custodian and a broker-dealer registered under the Exchange Act and a
member of NASD (or any futures commission merchant registered under the
Commodity Exchange Act), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities exchange (or the
Commodity Futures Trading Commission or any registered contract market), or of
any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for the purpose
of segregating cash or government securities in connection with options
purchased, sold or written by the Fund or commodity futures contracts or
options thereon purchased or sold by the Fund, (iii) for the purpose of
compliance by the Fund with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper corporate purposes,
BUT ONLY, in the case of the clause (iv), upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the Board of Directors
or of the Executive Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, setting forth the purpose or purposes
of such segregated account and declaring such purposes to be proper corporate
purposes.
2.14 OWNERSHIP CERTIFICATES FOR TAX PURPOSES.
The Custodian shall execute ownership and other certificates and
affidavits for all federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of the Fund held by it and
in connection with transfers of securities.
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<PAGE>
2.15 PROXIES.
The Custodian shall, with respect to the securities held hereunder, cause
to be promptly executed by the registered holder of such securities, if the
securities are registered otherwise than in the name of the Fund or a nominee
of the Fund, all proxies, without indication of the manner in which such
proxies are to be voted, and shall promptly deliver to the Fund such proxies,
all proxy soliciting materials and all notices relating to such securities.
2.16 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES.
The Custodian shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of securities
and expirations of rights in connection therewith and notices of exercise of
call and put options written by the Fund and the maturity of futures contracts
purchased or sold by the Fund) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or exchange offers,
the Custodian shall transmit promptly to the Fund all written information
received by the Custodian from issuers of the securities whose tender or
exchange is sought and from the party (or his agents) making the tender or
exchange offer. If the fund desires to take action with respect to any tender
offer, exchange offer or any other similar transaction, the Fund shall notify
the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
2.17 PROPER INSTRUCTIONS.
Proper Instructions as used throughout this Article 2 means a writing
signed or initialed by one or more person or persons as the Board of Directors
shall have from time to time authorized. Each such writing shall set forth the
specific transaction or type of transaction involved, including a specific
statement of the purpose for which such action is requested. Oral instructions
will be considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such instructions with
respect to the transaction involved. The Fund shall cause all oral
instructions to be confirmed in writing. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the Board of
Directors of the Fund accompanied by a detailed description of procedures
approved by the Board of Directors, Proper Instructions may
include communications effected directly between electro-mechanical or
electronic devices provided
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<PAGE>
that the Board of Directors and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets.
2.18 ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY.
The Custodian may in its discretion, without express authority from the
Fund;
1) Make payments to itself or others for minor expenses of handling
securities PROVIDED that all such payments shall be accounted for to
the Fund;
2) Surrender securities in temporary form for securities in
definitive form;
3) Endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) In general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase, transfer
and other dealings with the securities and property of the Fund except
as otherwise directed by the Board of Directors of the Fund.
2.19 EVIDENCE OF AUTHORITY.
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument of paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) or any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
2.20 CLASS ACTIONS. The Custodian shall transmit promptly to the Fund all
notices or other communications received by it in connection with any class
action lawsuit relating to securities currently or previously held for the Fund.
Upon being directed by the Fund to do so, the Custodian shall furnish to the
Fund any and all written materials which establish the holding/ownership, amount
held/owned, and period of holding/ownership of the securities in question.
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3. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INCOME.
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the daily income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective prospectus.
4. RECORDS.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rule 31a-1 and 31a-2
thereunder, applicable federal and state tax laws and any other law or
administrative rules or procedures which may be applicable to the Fund. All
such records shall be the property of the Fund and shall at all times during the
regular business hours of the Custodian be open for inspection by duly authority
officers, employees or agents of the Fund and employees and agents of the
Securities and Exchange Commission. The Custodian shall, at the Fund's request,
supply the Fund with a tabulation of securities owned by the Fund and held by
the Custodian and shall, when requested to do so by the Fund and for such
compensation as shall be agreed upon between the Fund and the Custodian,
include certificate numbers in such tabulations.
5. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund and may from
time to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants with
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respect to its activities hereunder in connection with the preparation of the
Fund's, Form N-1A, and Form N-SAR or other annual reports to the Securities
and Exchange Commission and with respect to any other requirements of such
Commission.
6. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports shall be of
sufficient scope, and in sufficient detail, as may reasonably be required by the
Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
7. COMPENSATION OF CUSTODIAN
For performance by the Custodian pursuant to this Agreement, the Fund
agrees to pay the Custodian annual asset fees and supplemental charges as set
out in the fee schedule attached hereto. The fee schedule shall be guaranteed
for service performed and expense incurred through June 30, 1993. A 15%
discount will be granted for 1991 fees. Subsequent to June 30, 1993, such fees
and supplemental charges may be changed from time to time subject to mutual
written agreement between the Fund and the Custodian.
8. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties. The Custodian shall
be held to the exercise of reasonable care in carrying out the provisions of
this Contract, but shall be kept indemnified by and shall be without liability
to the Fund for any action taken or omitted by it without negligence. It
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund)
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on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice. Notwithstanding the foregoing, the
responsibility of the Custodian with respect to redemptions effected by check
shall be in accordance with a separate Agreement entered into between the
Custodian and the Fund.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities for any
purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract, except such as may arise
from its or its nominee's own negligent action, negligent failure to act or
willful misconduct, any property at any time held for the account of the Fund
shall be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of Fund assets to the extent necessary to obtain reimbursement.
9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
The Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; PROVIDED, however, that the
Custodian shall not act under Section 2.12 hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Directors of the Fund has approved the initial use of a particular Securities
System and the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Directors has reviewed the use by the Fund of such
Securities System, as required in each case by Rule 17f-4 under the Investment
Company Act of 1940, PROVIDED FURTHER, however, that the Fund shall not amend or
terminate this Contract in contravention of any
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<PAGE>
applicable federal or state regulations, or any provision of the Articles of
Incorporation, and further provided, that the Fund may at any time be action of
its Board of Directors (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
10. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of Directors of
the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer to an account of the successor custodian all of the Fund's securities
held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, or not less than $25,000,000, all
securities, funds and other properties held by the Custodian and all instruments
held by the Custodian relative thereto and all other property held by it under
this Contract and to transfer to an account of such successor custodian all of
the Fund's securities held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
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<PAGE>
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, Funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Contract, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Articles of Incorporation of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
12. MINNESOTA LAW TO APPLY.
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The State of Minnesota.
13. PRIOR CONTRACTS.
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized officers as of the day
and year first above written.
THE JUNDT GROWTH FUND, INC.
By /s/ James R. Jundt
---------------------------------
ATTEST
By /s/ [illegible]
---------------------------------
NORWEST BANK MINNESOTA, N.A.
By /s/ Brent C. Siegel
---------------------------------
ATTEST
By
---------------------------------
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
THIS AGREEMENT is made as of the ______ day of ___________, 1995, by and
between THE JUNDT GROWTH FUND, INC., a Minnesota corporation, having its
principal office and place of business at 1550 Utica Avenue South, Suite 950,
Minneapolis, Minnesota 55416 (the "Fund"), and INVESTORS FIDUCIARY TRUST
COMPANY, a Missouri trust company having its principal office and place of
business at 127 West 10th Street, Kansas City, Missouri, 64105 ( IFTC").
WHEREAS, the Fund is a mutual fund and desires to appoint IFTC as its
transfer agent, dividend disbursing agent, and agent in connection with
certain other activities, and IFTC desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
l. Terms of Appointment; Duties of IFTC
1.1 Subject to the terms and conditions set forth in this Agreement, the
Fund hereby employs and appoints IFTC to act as, and IFTC agrees to
act as, transfer agent for the Fund's authorized and issued shares of
beneficial interest ("Shares"), dividend disbursing agent, and agent in
connection with any accumulation, open-account or similar plans provided to
the shareholders of the Fund ("Shareholders") and set out in the
currently effective prospectus and statement of additional information
("prospectus") of the Fund, including without limitation any periodic
investment plan or periodic withdrawal program.
1.2 IFTC agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and IFTC, IFTC shall:
(i) Receive for acceptance orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof
to the Custodian of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(iii) Receive for acceptance redemption requests and redemption
directions, and deliver the appropriate documentation
therefor to the Custodian;
(iv) In respect to the transactions in items (i), (ii) and (iii)
above, IFTC shall execute transactions directly with
broker-dealers authorized by the Fund who shall thereby be
deemed to be acting on behalf of the Fund;
<PAGE>
(v) At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over
or cause to be paid over in the appropriate manner such monies
as instructed by the redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends and distributions
declared by the Fund;
(viii) Issue replacement certificates for those certificates alleged
to have been lost, stolen or destroyed upon receipt by IFTC of
indemnification satisfactory to IFTC and protecting IFTC and
the Fund, and IFTC at its option may issue replacement
certificates in place of mutilated stock certificates upon
presentation thereof and without such indemnity;
(ix) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(x) Record the issuance of Shares and maintain pursuant to SEC Rule
17Ad-10(e) a record of the total number of Shares which are
authorized, based upon data provided to it by the Fund, and
issued and outstanding. IFTC shall also provide the Fund on a
regular basis with the total number of Shares which are
authorized and issued and outstanding but shall have no
obligation, when recording the issuance of Shares, to monitor
the issuance of such Shares or to take cognizance of any laws
relating to the issue or sale of such Shares, which functions
shall be the sole responsibility of the Fund.
(b) In addition to and neither in lieu nor in contravention of the
services set forth in the above paragraph (a), IFTC shall:
(i) perform all of the customary services of a transfer agent,
dividend disbursing agent, and, as relevant, agent in connection with
accumulation, open-account or similar plans (including without
limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies,
receiving and tabulating proxies, mailing Shareholder reports and
prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing
U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in
Shareholder accounts, preparing and
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<PAGE>
mailing activity statements for Shareholders, and providing
Shareholder account information, (ii) provide a system reasonably
acceptable to the Fund or its agent which will enable the Fund or its
agent to monitor the total number of Shares sold in each state, and
(iii) open and maintain one or more non-interest bearing deposit
accounts as agent for the Fund, with such financial institution(s) as
may be designated by it or by the Fund in writing (such accounts,
however, to be in the name of IFTC and subject only to its draft or
order), into which accounts the moneys received for the account of the
Fund and moneys for payment of dividends, distributions, redemptions
or other disbursements provided for hereunder will be deposited, and
against which checks, drafts and payment orders will be drawn.
(c) In addition, the Fund or its agent shall (i) identify to IFTC in
writing those transactions and assets to be treated as exempt from
blue sky reporting for each state and (ii) verify the establishment
of transactions for each state on the system prior to activation and
thereafter monitor the daily activity for each state. The
responsibility of IFTC for the Fund's blue sky state registration
status is solely limited to the initial establishment of transactions
subject to blue sky compliance by the Fund and the reporting of such
transactions to the Fund as provided above.
(d) Procedures as to who shall provide certain of these services in
Section 1 may be established from time to time by agreement between
the Fund and IFTC. IFTC may at times perform only a portion of these
services, and the Fund or its agent shall perform the remainder of
these services on the Fund's behalf.
(e) IFTC shall provide additional services on behalf of the Fund
(e.g., escheatment services) which may be agreed upon in writing
between the Fund and IFTC.
2. Fees and Expenses
2.1 For the performance of services by IFTC pursuant to this Agreement, the
Fund agrees to pay IFTC an annual maintenance fee for each Shareholder
account as set out in the initial fee schedule attached hereto. Such fees
and out-of-pocket expenses and advances identified under Section 2.2 below
may be changed from time to time subject to mutual written agreement
between the Fund and IFTC.
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees to
reimburse IFTC for reasonable out-of-pocket expenses, including but not
limited to confirmation production, postage, forms, telephone, microfilm,
microfiche, tabulating proxies, records storage, or advances incurred by
IFTC for the items set out in the fee schedule attached hereto. In
addition, any other expenses incurred by IFTC at the request or with the
consent of the Fund, will be reimbursed by the Fund.
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<PAGE>
2.3 The Fund agrees to pay all fees and reimbursable expenses promptly
following the receipt of the respective billing notice.
3. Representations and Warranties of IFTC
IFTC represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing and in good standing
under the laws of the State of Missouri; provided, however, that the Fund
acknowledges that IFTC intends to merge with a newly-chartered national
association which shall be the surviving entity following such merger.
3.2 It is duly qualified to carry on its business in the State of Missouri.
3.3 It is empowered under applicable laws and by its Charter and By-Laws to
enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
4. Representations and Warranties of the Fund
The Fund represents and warrants to IFTC that:
4.1 It is a corporation duly organized and existing and in good standing under
the laws of the State of Minnesota.
4.2 It is empowered under applicable laws and by its Articles of Incorporation
and By-Laws to enter into and perform this Agreement.
4.3 All proceedings required by said Articles of Incorporation and By-Laws have
been taken to authorize it to enter into and perform this Agreement.
4.4 It is an open-end diversified management investment company registered
under the Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended, is
currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with
respect to all Shares of the Fund being offered for sale.
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<PAGE>
5. Data Access and Proprietary Information
5.1 The Fund acknowledges that the computer programs, screen formats, report
formats, interactive design techniques, and documentation manuals
("Software") furnished to the Fund by IFTC as part of the Fund's ability to
access the Fund-related data ("Customer Data") maintained by IFTC on
data bases under the control and ownership of IFTC or to access data
provided by other third parties ("Data Access Services") constitute
copyrighted, trade secret, or other proprietary information (collectively,
"Proprietary Information") of substantial value to IFTC and such third
parties. In no event shall Proprietary Information be deemed Customer
Data nor shall Customer Data be deemed Proprietary Information. The Fund
agrees to treat all Proprietary Information as proprietary to IFTC and
further agrees that it shall not divulge any Proprietary Information to any
person or organization except as may be provided hereunder. Without
limiting the foregoing, the Fund agrees for itself and its employees and
agents:
(a) to electronically access Customer Data solely through computer
hardware operating at locations agreed to by IFTC and solely in
accordance with IFTC's applicable user documentation;
(b) to refrain from copying or duplicating in any way the Proprietary
Information except as required to operate and maintain the Software;
(c) to refrain from obtaining unauthorized access to any portion of the
Proprietary Information, and if such access is inadvertently obtained,
to inform IFTC in a timely manner of such fact and dispose of such
information in accordance with IFTC's instructions;
(d) to refrain from causing or allowing data, other than Customer Data,
acquired hereunder from being retransmitted to any other computer
facility or other location, except with the prior written consent of
IFTC;
(e) that the Fund shall have access to the Data Access Services only for
purposes of performing the functions and services which are to be
performed by the Fund or its agent pursuant to Section 1.2(d) hereof
as agreed upon by the parties;
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<PAGE>
(f) to honor all reasonable written requests made by IFTC to protect at
IFTC's expense the rights of IFTC in Proprietary Information at
common law, under federal copyright law and under other federal or
state law.
5.2 Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section
shall survive any termination of this Agreement.
5.3 If the Fund notifies IFTC that the Software or any of the Data Access
Services do not operate in material compliance with the most recently
issued user documentation for such services, IFTC shall endeavor in a
timely manner to correct such failure. Organizations from which IFTC
may obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Fund agrees to make no
claim against IFTC arising out of the contents of such third-party data,
including, but not limited to, the accuracy thereof.
5.4 If the transactions available to the Fund include the ability to originate
electronic instructions to IFTC in order to (i) effect the transfer or
movement of cash or Shares or (ii) transmit Shareholder information or
other information, then in such event IFTC shall be entitled to rely on
the validity and authenticity of such instructions without undertaking any
further inquiry as long as such instructions are undertaken in conformity
with security procedures established by IFTC from time to time.
5.5 All Customer Data shall be considered confidential and proprietary
information owned by the Fund. IFTC agrees to cooperate as necessary to
withdraw Customer Data from its Software when requested by the Fund. IFTC
further agrees to use all reasonable efforts to prevent any of the Customer
Data from being disclosed to third-parties, other than to agents of the
Fund and the Fund s administrator and as required by law.
5.6 If a third-party claims that the Software infringes its patent, copyright,
or trade secret, or any similar intellectual property right, IFTC will
defend, indemnify and hold the Fund harmless against that claim at IFTC s
expense and pay any costs, damages, or awards of settlement, including
court costs, arising out of any such claim, demand, or action, provided
that the Fund promptly notifies IFTC in writing of the claim, allows IFTC
to control, and cooperates with IFTC in, the defense or any related
settlement negotiations.
5.7 IFTC represents and warrants that Software will perform substantially in
accordance with IFTC s applicable user documentation. IFTC further
represents and warrants that IFTC has a license to use the Software for
purposes of this Agreement.
6
<PAGE>
5.8 DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN
AS IS, AS AVAILABLE BASIS. IFTC EXPRESSLY DISCLAIMS ALL WARRANTIES
EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED
TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE
6. Indemnification
6.1 IFTC shall not be responsible for, and the Fund shall indemnify and hold
IFTC and its agents and subcontractors harmless from and against, any and
all losses, damages, costs, charges (including reasonable counsel fees),
payments, expenses and liabilities arising out of or attributable to:
(a) All actions of IFTC or its agents or subcontractors taken pursuant
to this Agreement, provided that such actions are taken in good faith
and without negligence or willful misconduct.
(b) The breach of any representation or warranty of the Fund hereunder.
(c) The reliance on or use by IFTC or its agents or subcontractors of
information, records, documents or services which are received by IFTC
or its agents or subcontractors and have been prepared, maintained or
performed by the Fund or any other person or firm on behalf of the
Fund including but not limited to any previous transfer agent or
registrar.
(d) The reliance on, or the carrying out by IFTC or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state
or in violation of any stop order or other determination or ruling by
any federal agency or any state with respect to the offer or sale of
such Shares in such state.
6.2 At any time IFTC may apply to any officer of the Fund for instructions, and
may consult with legal counsel with respect to any matter arising in
connection with the services to be performed by IFTC under this Agreement,
and IFTC and its agents and subcontractors shall not be liable and shall be
indemnified by the Fund for any action taken or omitted by IFTC or any such
agent or subcontractor in reliance upon such instructions or upon the
opinion of such counsel. IFTC, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document furnished by
or on behalf of the Fund, reasonably
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<PAGE>
believed to be genuine and to have been signed by the proper person or
persons, or upon any instruction, information, data, records or documents
provided to IFTC or its agents or subcontractors by machine readable input,
telex, CRT data entry or other similar means authorized by the Fund, and
shall not be held to have notice of any change of authority of any person
until receipt of written notice thereof from the Fund. IFTC, its agents
and subcontractors shall also be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper manual
or facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or of a
co-transfer agent or co-registrar.
6.3 The Fund shall not be responsible for, and IFTC shall indemnify and hold
the Fund harmless from and against, any and all losses, damages, costs,
charges (including reasonable counsel fees), payments, expenses and
liabilities arising out of or attributable to:
(a) The bad faith, negligence or willful misconduct of IFTC or its agents
or subcontractors in taking or failing to take any action pursuant to
this Agreement.
(b) The breach of any representation or warranty of IFTC hereunder.
6.4 In order that the indemnification provisions contained in this Section 6
shall apply, upon the assertion of a claim for which an indemnifying party
may be required to indemnify an indemnified party, the indemnified party
shall promptly notify the indemnifying party of such assertion, and shall
keep the indemnifying party advised with respect to all developments
concerning such claim. The indemnifying party shall have the option to
participate with the indemnified party in the defense of such claim or to
defend against said claim in its own name or in the name of the indemnified
party through counsel reasonably acceptable to the indemnified party. The
indemnified party shall in no case confess any claim or make any compromise
in any case in which the indemnifying party may be required to indemnify
the indemnified party except with the indemnifying party s prior written
consent.
7. Covenants of the Fund and IFTC
7.1 The Fund shall promptly furnish to IFTC the following:
(a) A certified copy of the resolution of the Board of Directors of the
Fund authorizing the appointment of IFTC and the execution and
delivery of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the Fund and
all amendments thereto (or restatements thereof).
7.2 IFTC hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of stock certificates,
check forms and facsimile
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<PAGE>
signature imprinting devices, if any; and for the preparation or use of,
and for keeping account of, such certificates, forms and devices.
7.3 IFTC shall keep records relating to the services to be performed hereunder,
in the form and manner as it may deem advisable. To the extent required by
Section 31 of the Investment Company Act of 1940, as amended, and the Rules
thereunder, IFTC agrees that all such records prepared or maintained by
IFTC relating to the services to be performed by IFTC hereunder are the
property of the Fund and will be preserved, maintained and made available
in accordance with such Section and Rules, and will be surrendered promptly
to the Fund on and in accordance with its request.
7.4 IFTC and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any
other person, other than to agents of the Fund, the Fund s administrator
and agents and subcontractors of IFTC, except as may be required by law.
7.5 In case of any requests or demands for the inspection of the Shareholder
records of the Fund, IFTC will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such inspection.
IFTC reserves the right, however, to exhibit the Shareholder records to
any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person.
8. Termination of Agreement
8.1 This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other.
8.2 Should the Fund exercise its right to terminate this Agreement, all
out-of-pocket expenses associated with the movement of records and
material will be borne by the Fund.
9. Assignment
9.1 Except as provided in Section 9.3 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without
the written consent of the other party; provided, that the planned merger
described in Section 3.1 shall not be subject to this requirement.
9.2 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
9.3 IFTC may, without further consent on the part of the Fund,
subcontract for the
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<PAGE>
performance hereof with (i) Boston Financial Data Services, Inc., a
Massachusetts corporation ("BFDS"), or National Financial Data Services,
Inc. a Massachusetts corporation ("NFDS"), which are each duly registered
as a transfer agent pursuant to Section 17A(c)(1) of the Securities
Exchange Act of 1934, as amended ("Section 17A(c)(1)"); or (ii) any other
IFTC affiliate which is duly registered as a transfer agent pursuant to
Section 17A(c)(1); provided, however, that IFTC shall be as fully
responsible to the Fund for the acts and omissions of any subcontractor as
it is for its own acts and omissions.
10. Amendment
This Agreement may be amended or modified only by a written agreement
executed by both parties and authorized or approved by a resolution of
the Board of Directors of the Fund.
11. Missouri Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Missouri, without
reference to the choice of laws principles thereof.
12. Force Majeure
In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other
causes reasonably beyond its control, such party shall not be liable for
damages to the other for any damages resulting from such failure to
perform or otherwise from such causes.
13. Consequential Damages
Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
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<PAGE>
14. Merger of Agreement
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
15. Survival of Terms.
The provisions of Sections 5.1, 6 and 8.2 shall survive the termination
of this Agreement.
16. Counterparts
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
17. Notices.
Notices, requests, instructions and other writings shall be addressed to
a party at the address set forth above, or at such other address as such
party may have designated to the other in writing.
18. Waiver.
The failure of either party to insist upon the performance of any terms
or conditions of this Agreement or to enforce any rights resulting from
any breach of any of the terms or conditions of this Agreement,
including the payment of damages, shall not be construed as a continuing
or permanent waiver of any such terms, conditions, rights or privileges,
but the same shall continue and remain in full force and effect as if no
such forbearance or waiver had occurred. No waiver, release or discharge
of any party s rights hereunder shall be effective unless contained in a
written instrument signed by the party sought to be charged.
19. Invalidity.
If any provision of this Agreement shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement shall remain
in full force and effect and this Agreement shall remain enforceable to
the fullest extent permitted by applicable law.
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<PAGE>
20. Other Agreements.
This Agreement does not in any way affect any other agreements entered
into between the parties hereto and any actions taken or omitted by any
party hereunder shall not affect any rights or obligations of any other
party hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
THE JUNDT GROWTH FUND, INC.
By:
INVESTORS FIDUCIARY TRUST COMPANY
By:
-------------------------------------
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<PAGE>
INVESTORS FIDUCIARY TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
1. Receives orders for the purchase of Shares.
2. Issue Shares and hold Shares in Shareholders accounts.
3. Receive redemption requests.
4. Effect transactions 1-3 above directly with broker-dealers.
5. Pay over monies to redeeming Shareholders.
6. Effect transfers of Shares.
7. Prepare and transmit dividends and distributions.
8. Issue Replacement Certificates.
9. Reporting of abandoned property.
10. Maintain records of account.
11. Maintain and keep a current and accurate control book
for each issue of securities.
12. Mail proxies.
13. Mail Shareholder reports.
14. Mail prospectuses to current Shareholders.
15. Withhold taxes on U.S. resident and non-resident
alien accounts.
16. Prepare and file U.S. Treasury Department forms.
17. Prepare and mail account and confirmation statements for
Shareholders.
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Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
18. Provide Shareholder account information.
19. Blue sky reporting.
* Such services are more fully described in Section 1.2 (a), (b) and (c) of
the Agreement.
JUNDT GROWTH FUND
BY:
------------------------------------
INVESTORS FIDUCIARY TRUST COMPANY
BY:
------------------------------------
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<PAGE>
AMENDED
ADMINISTRATION AGREEMENT
AGREEMENT made this day of , 199_ by and between
The Jundt Growth Fund, Inc., a Minnesota corporation (hereinafter called the
"Fund"), and Princeton Administrators, L.P., a Delaware limited partnership
(hereinafter called the "Administrator");
WITNESSETH
WHEREAS, The Fund intends to convert into an open-end management investment
company and to be registered as such under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, The Fund and Jundt Associates, Inc. (the "Investment Adviser") are
entering into an Amended Investment Advisory Agreement (the "Investment
Agreement") pursuant to which the Investment Adviser will agree to act as
investment adviser for, and to manage the affairs, business and investment of
the assets of the Fund;and
WHEREAS, The Fund desires to continue to retain the Administrator to render
certain administrative services in the manner and on the terms and conditions
hereafter set forth; and
WHEREAS, The Administrator desires to be retained to perform such services
on said terms and conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafer contained, the Fund and the Administrator agree as follows:
<PAGE>
1. DUTIES OF THE ADMINISTRATOR. The Fund hereby retains the
Administrator to act as administrator of the Fund, subject to the supervision
and direction of the Board of Directors of the Fund, as hereinafter set forth.
The Administrator shall perform or arrange for the performance of the following
administrative and clerical services: (i) maintain and keep certain books and
records of the Fund; (ii) prepare or review and, subject to approval by the
Fund, file certain reports and other documents required by U.S. Federal, state
(subject to and contingent upon the Fund's transfer agent providing sales and
redemption data to the Administrator via an automated data electronic feed
system compatible with the Administrator's system and acceptable to the
Administrator) and other applicable U.S. laws and regulations to maintain the
Fund's registration as an open-end investment company; (iii) coordinate tax
related matters; (iv) respond to inquiries from Fund shareholders; (v) calculate
and publish, or arrange for the calculation and publication of, the net asset
value of the Fund's shares; (vi) oversee, and, as the Board may reasonably
request or deem appropriate, make reports and recommendations to the Board on,
the performance of administrative and professional services rendered to the Fund
by others, including its custodian and any subcustodian, registrar, transfer
agent, dividend disbursing agent and dividend reinvestment plan agent, as well
as accounting, auditing and other services; (vii) provide the Fund with the
services of persons competent to perform the foregoing administrative and
clerical functions; (viii) provide the, Fund with administrative offices and
data processing facilities; (ix) arrange for payment of the Fund's expenses; (x)
consult with the Fund's officers, independent accountants, legal counsel,
custodian and any sub-custodian, registrar, transfer agent, and dividend
disbursing agent and dividend reinvestment plan agent in establishing the
accounting policies of the Fund; (xi) prepare such financial information and
reports as may be required by any banks from which the Fund borrows funds; and
(xii) provide such assistance to the Investment Adviser, the custodian and any
sub-custodian, and the Fund's counsel and auditors as generally may be required
to carry on properly the business and operations of the Fund. The Fund agrees
to cause the transfer agent, the custodian and the Investment Adviser to
deliver, on a timely basis, such information to the Administrator
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<PAGE>
as may be necessary or appropriate for the Administrator's performance of its
duties and responsibilities hereunder, including but not limited to, daily
records of transactions, daily valuation of investments in local currency (which
may be based on information provided by a pricing service) as well as the daily
conversion factor in order for the Administrator to price the Fund in United
States dollars, reports of expenses borne by the Fund, the Fund management
letter to stockholders and such other information necessary for the
Administrator to prepare the above referenced reports and filings, and the
Administrator shall be entitled to rely on the accuracy and completeness of such
information in performing its duties hereunder.
2. EXPENSES OF THE ADMINISTRATOR. The Administrator assumes and shall
pay for maintaining the staff and personnel necessary to perform its obligations
under this Agreement, and shall at its own expense, provide office space,
facilities, equipment and necessary personnel which it is obligated to provide
under paragraph 1 hereof, except that the Fund shall pay reasonable travel
expenses of persons who perform administrative, clerical and bookkeeping
functions on behalf of the Fund. The Fund and the Investment Adviser assume and
shall pay or cause to be paid all other expenses of the Fund as set forth in the
Investment Agreement. The expenses of legal counsel and accounting experts
retained by the Administrator, after consulting with the Fund counsel and
independent auditors, as may be necessary or appropriate for the Administrator's
performance of its duties and responsibilities under this Agreement are deemed
expenses of, and shall be paid by, the Fund.
3. COMPENSATION OF THE ADMINISTRATOR. For the services rendered to the
Fund by the Administrator pursuant to this Agreement, the Fund shall pay to the
Administrator on the first business day of each calendar month a fee for the
previous month at an annual rate equal to the greater of (i) $125,000 per annum
($10,416.66 per month), or (ii) at an annual rate equal to 0.20% of the Fund's
net assets up to and including U.S. $600 million and 0.175% of the Fund's net
assets in excess of U.S. $600 million. For the purpose of determining fees
payable to the Administrator, the
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<PAGE>
net assets of the Fund shall mean the value of the total assets of the Fund,
minus the sum of the accrued liabilities of the Fund exclusive of capital stock
and surplus. The value of the Fund's net assets shall be computed at the times
and in the manner specified in the Fund's registration statement on Form N-1A,
as amended from time to time (the "Registration Statement"). Compensation by
the Fund of the Administrator shall commence on the date of the conversion of
the Fund from a closed-end investment company to an open-end investment company
and the fee for the period from the date the Fund converts to an open-end Fund
as aforesaid to the end of the month during which such proceeds are so received,
shall be pro-rated according to the proportion that such period bears to the
full monthly period. Upon termination of this Agreement before the end of a
month, the fee for such part of that month shall be prorated according to the
proportion that such period bears to the full monthly period and shall be
payable within seven (7) days after the date of termination of this Agreement.
4. LIMITATION OF LIABILITY OF THE ADMINISTRATOR; INDEMNIFICATION.
(a) The Administrator shall not be liable to any person for any error of
judgment or mistake of law or for any loss arising out of any act or omission by
the Administrator in the performance of its duties hereunder; provided, however,
that nothing herein contained shall be construed to protect the Administrator
against any liability to the Fund to which the Administrator shall otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reckless disregard of its obligations and
duties hereunder.
(b) The Administrator may, with respect to questions of law, apply for and
obtain the advice or opinion of legal counsel and, with respect to the
application of generally accepted accounting principles or Federal tax
accounting principles, apply for and obtain the advice or opinion of accounting
experts. The Administrator shall be fully protected with respect to any action
taken or omitted by it in good faith in conformity with such advice or opinion.
(c) The Fund agrees to indemnify and hold harmless the Administrator from
and against all charges, claims, expenses (including legal fees) and liabilities
4
<PAGE>
reasonably incurred by the Administrator in connection with the performance of
its duties hereunder, except such as may arise from the Administrator's willful
misfeasance, bad faith, gross negligence in the performance of its duties or by
reckless disregard of its obligations and duties hereunder. The Fund shall make
advance payments in connection with the expenses of defending any action with
respect to which indemnification might be sought hereunder if the Fund receives
a written affirmation of the Administrator's good faith belief that the standard
of conduct necessary for indemnification has been met and a written undertaking
to reimburse the Fund unless it is subsequently determined that the
Administrator is entitled to such indemnification and if the Directors of the
Fund determine that the facts then known to them would not preclude
indemnification. In addition, at least one of the following conditions must be
met: (A) the Administrator shall provide a security for this undertaking, (B)
the Fund shall be insured against losses arising by reason of any lawful
advances, or (C) a majority of a quorum consisting of Directors of the Fund who
are neither "interested persons" of the Fund (as defined in Section 2(a) (19) of
the 1940 Act) nor parties to the proceeding ("Disinterested Non-Party
Directors") or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Administrator
ultimately will be found entitled to indemnification.
(d) As used in this Paragraph 4, the term "Administrator" shall include
any affiliates of the Administrator performing services for the Fund
contemplated hereby and directors, partners, officers, agents and employees of
the Administrator and such affiliates.
5. ACTIVITIES OF THE ADMINISTRATOR. The services of the Administrator
under this Agreement are not to be deemed exclusive, and the Administrator and
any person controlled by or under common control with the Administrator shall be
free to render similar services to others.
5
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of the date first above written and shall remain in force
until terminated as provided herein. This Agreement may be terminated at any
time, without the payment of any penalty, by the Fund on sixty days' written
notice to the Administrator and by the Administrator on ninety days' written
notice to the Fund. This Agreement shall automatically terminate in the event
of its assignment.
7. AMENDMENTS OF THIS AGREEMENT. This Agreement may be amended by the
parties hereto only if such amendment is specifically approved by the Board of
Directors of the Fund and such amendment is set forth in a written instrument
executed by each of the parties hereto.
8. GOVERNING LAW. The provisions of this Agreement shall be construed
and interpreted in accordance with the laws of the State of New York as at the
time in effect and the applicable provisions of the 1940 Act. To the extent
that the applicable law of the State of New York, or any of the provisions
herein, conflict with the applicable provisions of the 1940 Act, the latter
shall control.
9. COUNTERPARTS. This Agreement may be executed by the parties hereto in
counterparts and if executed in more than one counterpart, the separate
instruments shall constitute one agreement.
10. Notices. Any notice under this Agreement, shall be in writing
and shall be deemed to be received on the earlier of the date actually received
or on the fourth day after the postmark if such notice is mailed first class
postage prepaid. Notice shall be addressed: (a) if to the Administrator, to:
President, Princeton Administrators, L.P., P.O. Box 9011, Princeton, New Jersey
08543-9011; or (b) if to the Fund, to: Chairman, The Jundt Growth Fund, Inc.,
1550 Utica Avenue South, Suite 950, Minneapolis, Minnesota 55416.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
THE JUNDT GROWTH FUND, INC.
By:
----------------------------
Title:
PRINCETON ADMINISTRATORS, L.P.
By: Princeton Services, Inc., General
Partner
By:
----------------------------
Title:
Revised 9/95
sbb/agreements/Jundt-GF:
7
<PAGE>
FINANCIAL SERVICES AGREEMENT
AGREEMENT made as of the 4th day of December 1995, by and between (i)
each of the investment companies listed on Schedule A hereto as such Schedule
may be amended from time to time (collectively the "Funds," each a "Fund");
(ii) Investors Fiduciary Trust Company ("IFTC") (iii) Merrill Lynch Financial
Data Services, Inc. ("MLFDS") a Florida corporation; and (iv) Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPF&S"), a Delaware corporation.
WITNESSETH:
WHEREAS the Funds are classes of one or more investment companies
registered under the Investment Company Act of 1940, as amended (the "Act");
and
WHEREAS, IFTC is the transfer agent, dividend disbursing agent, and
shareholder servicing agent for the Funds; and
WHEREAS, MLFDS, a transfer agent registered under the Securities
Exchange Act of 1934, has presented to IFTC the various administrative services
that may be performed by MLPF&S; and
WHEREAS, the Funds desire to retain NMPF&S to perform such services
and MLPF&S is willing and able to furnish such services on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, each party hereto severally agrees, as follows:
I . MLPF&S agrees to perform the administrative services specified in
Exhibit A hereto (the "Services") for the benefit of the Funds' shareholders who
maintain shares of any of such Funds in brokerage accounts with MLPF&S and
whose shares are included in the master account referred to in paragraph 1 of
Exhibit A (collectively, the "MLPF&S customers").
2. MLPF&S agrees that it will maintain and preserve all records as
required by law to be maintained and preserved in connection with providing the
Services, and will otherwise comply with all law, rules and regulations
applicable to the Services. Upon the request of the Funds, MLPF&S shall provide
copies of all the historical records relating to transactions involving the
Funds and MLPF&S customers, in each case as may reasonably be requested to
enable the Funds or its representatives, including without limitation its
auditors, investment advisor, IFTC or successor transfer agent or distributor,
to monitor and review the Services, or to comply with any request of the board
of directors (the "Directors") of the Funds or of a governmental body, self-
regulatory organization or a shareholder. MLPF&S agrees that it will permit the
Funds and IFTC or their representatives to have reasonable access to its
personnel and records in order to facilitate the monitoring of the quality of
the services. It is understood that notwithstanding anything herein to the
contrary, neither MLFDS nor MLPF&S shall be required to provide the names and
addresses of MLPF&S customers to the Funds, IFTC or their representatives,
unless applicable laws otherwise require.
3 . MLPF&S may contract with or establish relationships with MLFDS,
or other parties for the provision of the Services or other activities of MLPF&S
required by the Agreement.
4. Each of MLPF&S and MLFDS, hereby agrees to notify promptly the
Funds if for any reason either of them is unable to perform fully and promptly
any of its obligations under this Agreement.
<PAGE>
5. Each of MLPF&S and MLFDS, hereby represent that neither of them
now owns or holds with power to vote any shares of the Funds which are
registered in the name of MLPF&S or the name of its nominee and which are
maintained in MLPF&S brokerage accounts.
6. The provisions of the Agreement shall in no way limit the
authority of any of the Funds or IFTC to take such action as either of such
parties may deem appropriate or advisable in connection with all matters
relating to the operations of any of such Funds and/or sale of its shares.
7. In consideration of the performance of the services by MLPF&S
and MLFDS, each of the Funds severally agrees to compensate MLFDS at the rate
of $16.00 annually per each MLPF&S customer account holding shares of a Fund
which shares were subject to an up-front sales load or no sales load, and
$19.00 annually per MLPF&S customer account holding shares of a Fund that are
subject to a contingent deferred sales charge ("CDSC"); provided, however, if
all shares in an MLPF&S customer account have been held for the requisite
time period such that the shares are no longer subject to a CDSC, then MLFDS
will be compensated at the rate of $16.00 annually for such MLPF&S customer
account. These rates are the current standard rates for the services provided
by MLFDS and MLPF&S hereunder. Payment shall be made monthly based upon the
number of MLPF&S customer/shareholders of a Fund who hold shares of such
Fund in a MLPF&S brokerage account for any part of the subject month. This
number shall be certified each year by independent public accountants
retained by MLPF&S as of a month selected by the Funds or IFTC, such
certification to be at the expense of MLPF&S. It is further agreed that,
notwithstanding anything herein to the contrary, MLPF&S will not request any
increase in the compensation hereunder to be effective prior to September 30,
1996.
In the event MLPF&S or MLFDS, as its agent were to mail any
Fund's proxy materials, reports, prospectuses and other information to MLPF&S
customers/shareholders of any Fund who are MLPF&S customers pursuant to
paragraph 4 of Exhibit A, IFTC or such Fund agrees to reimburse MLPF&S or
MLFDS, Inc., as the case may be, for postage, handling fees and reasonable
costs of supplies used by it in such mailings in an amount to be determined
in accordance with the rates set forth in Rule 451.90 of the New York Stock
Exchange Inc.
8. MLFDS shall indemnify and hold harmless the Funds and IFTC
from and against any and all of losses or liabilities that any one or more of
them may incur, including without limitation reasonable attorneys' fees,
expenses and cost, arising out of or related to the performance or
non-performance of MLPF&S or MLFDS of its responsibilities under this
Agreement, excluding, however, any such claims, suits, loss, damage or cost
caused by, or contributed to, by the Funds or IFTC, as to which the Funds and
IFTC shall indemnify, hold harmless and defend MLFDS and MLPF&S on the same
basis as set forth above.
9. This Agreement may be terminated at any time by each of MLPF&S
and MLFDS or by any of the Funds as to itself upon 30 days written notice to
MLFDS. This Agreement may also be terminated at any time without penalty upon
30 days written notice to MLFDS that a majority of the Directors of any of the
Funds have determined to terminate its agreement(s) with IFTC pertaining to its
transfer agent services. The provisions of paragraph 2 shall continue in full
force and effect after termination of this Agreement. Notwithstanding the
foregoing, this Agreement shall not require MLPF&S to preserve any records
relating to this Agreement beyond the time periods otherwise required by the
laws to which MLPF&S is subject.
10. Any other Fund for which IFTC serves as transfer agent may become
a party to this Agreement by giving written notice to MLPF&S or MLFDS that it
has elected to become a party hereto and by having this Agreement executed on
its behalf.
2
<PAGE>
11. It is understood and agreed that in performing the services under
this Agreement, neither MLPF&S nor MLFDS acting in its capacity described
herein shall be acting as an agent for any of the Funds.
12. This agreement including its Exhibit and Schedule, constitutes
the entire agreement between the parties with respect to the matters dealt with
herein, and supersedes any previous agreements and documents with respect to
such matters.
IN WITNESS HEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
MERRILL LYNCH, PIERCE, FENNER & MERRILL LYNCH FINANCIAL DATA
SMITH INCORPORATED SERVICES, INC.
By: By:
----------------------------- -----------------------------
Print Name: Harry P. Allex Print Name: Angelo V. Esposito
Title: Sr. Vice President Title: President
Jundt Associates, Inc. Funds Set Forth on Schedule A
INVESTORS FIDUCIARY TRUST THE JUNDT GROWTH FUND, INC.
COMPANY
By: By:
-------------------------- ----------------------------
Print Name: Print Name:
------------------ --------------------
Title: Title:
----------------------- --------------------------
JUNDT FUNDS, INC.
By:
----------------------------
Print Name:
--------------------
Title:
------------------------
3
<PAGE>
EXHIBIT A
Pursuant to the Agreement by and among the parties hereto, MLPF&S shall
perform the following Services:
1. Maintain separate records for each shareholder of the Funds who
hold shares of a Fund in a brokerage account with MLPF&S ("MLPF&S customers"),
which records shall reflect shares purchased and redeemed and share balances.
MLPF&S shall maintain a single master account with the transfer agent of the
Fund on behalf of MLPF&S customers and such account shall be in the name of
MLPF&S or its nominee as the record owner of the shares owned by such customers.
2. Disburse or credit to MLPF&S customers all proceeds of redemptions
of shares of the Fund and all dividends and other distributions not reinvested
in shares of the Fund.
3. Prepare and transmit to MLPF&S customers periodic account
statements showing the total number of shares owned by the customer as of the
statement closing date, purchases and redemptions of Fund shares by the customer
during the period covered by the statement and the dividends and other
distributions paid to the customer during the statement period (whether paid in
cash or reinvested in Fund shares).
4. Transmit to MLPF&S customers proxy materials and reports and other
information received by MLPF&S from any of the Funds and required to be sent to
shareholders under the federal securities laws, and, upon request of the Fund's
transfer agent transmit to MLPF&S customers material fund communications deemed
by the Fund, through its Board of Directors or other similar governing body, to
be necessary and proper for receipt by all fund beneficial shareholders.
5 . Transmit to the Fund's transfer agent purchase and redemption
orders on behalf of MLPF&S customers.
6. Provide to the Funds, or to IFTC acting in its capacity as
transfer agent for any of the Funds, or any of the agents designated by any of
them, such periodic reports as shall reasonably be concluded to be necessary to
enable any of the Funds and its distributor to comply with State Blue Sky
requirements.
4
<PAGE>
SCHEDULE A
to the
FINANCIAL SERVICES AGREEMENT
The Jundt Growth Fund, Inc. -- Class A
The Jundt Growth Fund, Inc. -- Class B
The Jundt Growth Fund, Inc. -- Class C
The Jundt Growth Fund, Inc. -- Class D
Jundt U.S. Emerging Growth Fund -- Class B
Jundt U.S. Emerging Growth Fund -- Class C
Jundt U.S. Emerging Growth Fund -- Class D
5
<PAGE>
FAEGRE & BENSON
PROFESSIONAL LIMITED LIABILITY PARTNERSHIP
2200 NORWEST CENTER
90 SOUTH SEVENTH STREET
MINNEAPOLIS, MINNESOTA 55402
The Jundt Growth Fund, Inc.
1550 Utica Avenue South, Suite 950
Minneapolis, Minnesota 55416
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form N-1A (File Nos:
33-98182 and 811-06317) (the "Registration Statement") which you have filed with
the Securities and Exchange Commission for the purposes of registering The Jundt
Growth Fund, Inc. (the "Company") as an open-end management investment company
pursuant to the Investment Company Act of 1940, as amended, and of registering
for sale by the Company an indefinite number of the Company's common shares, par
value $.01 per share, pursuant to the Securities Act of 1933, as amended. This
opinion relates solely to the Company's Class A common shares, Class B common
shares, Class C common shares and Class D common shares (collectively, the
"Shares").
We are familiar with the proceedings to date with respect to the proposed
sale by the Company of the Shares, and have examined such records, documents and
matters of law, and have satisfied ourselves as to such matters of fact, as we
consider relevant for the purposes of this opinion.
We are of the opinion that:
(a) The Company is a legally organized corporation under Minnesota
law; and
(b) The Shares to be sold by the Company will be legally issued,
fully paid and nonassessable, if and when issued and sold upon the
terms and in the manner set forth in the Registration Statement.
We consent to the reference to this firm under the caption "Counsel and
Auditors" in the Statement of Additional Information contained in the
Registration Statement and to the use of this opinion as an exhibit to the
Registration Statement.
Dated: December 18, 1995
Very truly yours,
/s/ Faegre & Benson
Professional Limited Liability Partnership
<PAGE>
[LOGO]
KPMG PEAT MARWICK LLP
4200 Norwest Center Telephone 612 305 5000 Telefax 612 305 5039
90 South Seventh Street
Minneapolis, MN 55402
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
The Jundt Growth Fund, Inc.:
We consent to the use of our report included herein and to the references to our
Firm under the headings "FINANCIAL HIGHLIGHTS" in Part A and "COUNSEL AND
AUDITORS" in Part B of the Registration Statement.
/s/ KPMG Peat Marwick LLP
---------------------------------
KPMG Peat Marwick LLP
Minneapolis, Minnesota
December 18, 1995
<PAGE>
CLASS B DISTRIBUTION PLAN
OF
THE JUNDT GROWTH FUND, INC.
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the ____ day of ______________,
1995, by and between The Jundt Growth Fund, Inc., a Minnesota corporation, (the
"Fund") and U.S. Growth Investments, Inc., a Minnesota corporation (the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Fund proposes to enter into a Distribution Agreement with
Distributor, pursuant to which Distributor will act as the exclusive distributor
and representative of the Fund in the offer and sale of Class B shares of common
stock, par value $.01 per share (the "Class B shares"), of the Fund to the
public; and
WHEREAS, the Fund desires to adopt this Class B Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act, pursuant to
which the Fund will pay an account maintenance fee and a distribution fee to
Distributor with respect to the Fund's Class B shares; and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Fund and its
Class B shareholders.
NOW, THEREFORE, the Fund hereby adopts, and Distributor hereby agrees
to the terms of, the Plan in accordance with Rule 12b-1 under the Investment
Company Act on the following terms and conditions:
1. The Fund shall pay Distributor an account maintenance fee under
the Plan at the end of each month at the annual rate of 0.25% of average
<PAGE>
daily net assets of the Fund relating to Class B shares to compensate
Distributor and securities firms with which Distributor enters into related
agreements pursuant to paragraph 5 hereof ("Sub-Agreements") for account
maintenance activities with respect to Class B shareholders of the Fund.
2. The Fund shall pay Distributor a distribution fee under the Plan
at the end of each month at the annual rate of 0.75% of average daily net assets
of the Fund relating to the Class B shares to compensate Distributor and
securities firms with which Distributor enters into related Sub-Agreements for
providing sales and promotional activities and services relating to the Class B
shares. Such activities and services will relate to the sale, promotion and
marketing of the Class B shares. Such expenditures may consist of sales
commissions to financial consultant for selling Class B shares, compensation,
sales incentives and payments to sales and marketing personnel, payment of
expenses incurred in sales and promotional activities, including advertising
expenditures relating to the Fund and the costs of preparing and distributing
promotional materials. The distribution fee may also be used to pay the
financing costs of carrying the expenditures described in this paragraph 2.
Payment of the distribution fee described in this paragraph 2 shall be subject
to any limitations set forth in any applicable regulation of the National
Association of Securities Dealers, Inc.
3. On the conversion date (as hereinafter defined) next following
the eighth anniversary of the purchase of a Class B share such share shall
automatically convert into Class D shares, the conversion ratio being determined
by the relative net asset value of Class B and Class D shares on the conversion
date. The "conversion date" shall be the 15th day of each month (or if such day
is not a business day, the next following business day). For purposes hereof, a
"business day" means any day other than a Saturday, a Sunday or a day on which
banking or trust institutions in the cities of Minneapolis, Minnesota and New
York, New York are authorized or obligated by law, executive order or
governmental decree to be closed.
4. Payments made pursuant to the Plan will be imposed directly
against the assets of the Fund relating to the Class B shares.
5. The Fund hereby authorizes Distributor to enter into
Sub-Agreements with certain securities firms ("Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in paragraphs 1 and 2 hereof. Distributor may reallocate all or a
portion of its account maintenance fee or distribution fee to such Securities
Firms as compensation for the above-mentioned activities and services. Such
Sub-Agreements shall provide that the Securities Firms shall provide
2
<PAGE>
Distributor with such information as is reasonably necessary to permit
Distributor to comply with the reporting requirements set forth in paragraph
6 hereof.
6. Distributor shall provide the Fund for review by the Board of
Directors, and the Directors shall review, at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
account maintenance fee and the distribution fee during such period.
7. The Plan shall not take effect until it has been approved by a
vote of at least a majority, as defined in the Investment Company Act, of the
outstanding Class B voting securities of the Fund.
8. The Plan shall not take effect until it has been approved,
together with any related agreements, by votes of a majority of both (a) the
Directors of the Fund and (b) those Directors of the Fund who are not
"interested persons" of the Fund, as defined in the Investment Company Act, and
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to it (the "Rule 12b-1 Directors"), cast in person at a
meeting or meetings called for the purpose of voting on the Plan and such
related agreements.
9. The Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for approval
of the Plan in paragraph 8.
10. The Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by vote of a majority of the outstanding Class B
voting securities of the Fund.
11. The Plan may not be amended to increase materially the rate of
payments by the Fund provided for herein unless such amendment is approved by at
least a majority, as defined in the Investment Company Act, of the outstanding
Class B voting securities of the Fund, and by the Directors of the Fund in the
manner provided for in paragraph 8 hereof, and no material amendment to the Plan
shall be made unless approved in the manner provided for approval and annual
renewal in paragraph 8 hereof.
12. While the Plan is in effect, the selection and nomination of
Directors who are not interested persons, as defined in the Investment Company
Act, of the Fund shall be committed to the discretion of the Directors who are
not interested persons.
3
<PAGE>
13. The Fund shall preserve copies of the Plan and any related
agreements and all reports made pursuant to paragraph 6 hereof, for a period of
not less than six years from the date of the Plan, or the agreements or such
report, as the case may be, the first two years in an easily accessible place.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Plan as of
the date first above written.
THE JUNDT GROWTH FUND, INC.
By: _____________________________________
Title:
U.S. GROWTH INVESTMENTS, INC.
By: _____________________________________
Title:
5
<PAGE>
CLASS C DISTRIBUTION PLAN
OF
THE JUNDT GROWTH FUND, INC.
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the ____ day of ______________,
1995, by and between The Jundt Growth Fund, Inc., a Minnesota corporation, (the
"Fund") and U.S. Growth Investments, Inc., a Minnesota corporation (the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Fund proposes to enter into a Distribution Agreement with
Distributor, pursuant to which Distributor will act as the exclusive distributor
and representative of the Fund in the offer and sale of Class C shares of common
stock, par value $.01 per share (the "Class C shares"), of the Fund to the
public; and
WHEREAS, the Fund desires to adopt this Class C Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act, pursuant to
which the Fund will pay an account maintenance fee and a distribution fee to
Distributor with respect to the Fund's Class C shares; and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Fund and its
Class C shareholders.
NOW, THEREFORE, the Fund hereby adopts, and Distributor hereby agrees
to the terms of, the Plan in accordance with Rule 12b-1 under the Investment
Company Act on the following terms and conditions:
1. The Fund shall pay Distributor an account maintenance fee under
the Plan at the end of each month at the annual rate of 0.25% of average
<PAGE>
daily net assets of the Fund relating to Class C shares to compensate
Distributor and securities firms with which Distributor enters into related
agreements pursuant to paragraph 4 hereof ("Sub-Agreements") for account
maintenance activities with respect to Class C shareholders of the Fund.
2. The Fund shall pay Distributor a distribution fee under the Plan
at the end of each month at the annual rate of 0.75% of average daily net assets
of the Fund relating to the Class C shares to compensate Distributor and
securities firms with which Distributor enters into related Sub-Agreements for
providing sales and promotional activities and services relating to the Class C
shares. Such activities and services will relate to the sale, promotion and
marketing of the Class C shares. Such expenditures may consist of sales
commissions to financial consultant for selling Class C shares, compensation,
sales incentives and payments to sales and marketing personnel, payment of
expenses incurred in sales and promotional activities, including advertising
expenditures relating to the Fund and the costs of preparing and distributing
promotional materials. The distribution fee may also be used to pay the
financing costs of carrying the expenditures described in this paragraph 2.
Payment of the distribution fee described in this paragraph 2 shall be subject
to any limitations set forth in any applicable regulation of the National
Association of Securities Dealers, Inc.
3. Payments made pursuant to the Plan will be imposed directly
against the assets of the Fund relating to the Class C shares.
4. The Fund hereby authorizes Distributor to enter into
Sub-Agreements with certain securities firms ("Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in paragraphs 1 and 2 hereof. Distributor may reallocate all or a
portion of its account maintenance fee or distribution fee to such Securities
Firms as compensation for the above-mentioned activities and services. Such
Sub-Agreements shall provide that the Securities Firms shall provide Distributor
with such information as is reasonably necessary to permit Distributor to comply
with the reporting requirements set forth in paragraph 5 hereof.
5. Distributor shall provide the Fund for review by the Board of
Directors, and the Directors shall review, at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
account maintenance fee and the distribution fee during such period.
2
<PAGE>
6. The Plan shall not take effect until it has been approved by a
vote of at least a majority, as defined in the Investment Company Act, of the
outstanding Class C voting securities of the Fund.
7. The Plan shall not take effect until it has been approved,
together with any related agreements, by votes of a majority of both (a) the
Directors of the Fund and (b) those Directors of the Fund who are not
"interested persons" of the Fund, as defined in the Investment Company Act, and
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to it (the "Rule 12b-1 Directors"), cast in person at a
meeting or meetings called for the purpose of voting on the Plan and such
related agreements.
8. The Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for approval
of the Plan in paragraph 7.
9. The Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by vote of a majority of the outstanding Class C
voting securities of the Fund.
10. The Plan may not be amended to increase materially the rate of
payments by the Fund provided for herein unless such amendment is approved by at
least a majority, as defined in the Investment Company Act, of the outstanding
Class C voting securities of the Fund, and by the Directors of the Fund in the
manner provided for in paragraph 7 hereof, and no material amendment to the Plan
shall be made unless approved in the manner provided for approval and annual
renewal in paragraph 7 hereof.
11. While the Plan is in effect, the selection and nomination of
Directors who are not interested persons, as defined in the Investment Company
Act, of the Fund shall be committed to the discretion of the Directors who are
not interested persons.
12. The Fund shall preserve copies of the Plan and any related
agreements and all reports made pursuant to paragraph 5 hereof, for a period of
not less than six years from the date of the Plan, or the agreements or such
report, as the case may be, the first two years in an easily accessible place.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Plan as of
the date first above written.
THE JUNDT GROWTH FUND, INC.
By: _____________________________________
Title:
U.S. GROWTH INVESTMENTS, INC.
By: _____________________________________
Title:
4
<PAGE>
CLASS D DISTRIBUTION PLAN
OF
THE JUNDT GROWTH FUND, INC.
PURSUANT TO RULE 12b-1
THIS DISTRIBUTION PLAN made as of the ____ day of ______________,
1995, by and between The Jundt Growth Fund, Inc., a Minnesota corporation, (the
"Fund") and U.S. Growth Investments, Inc., a Minnesota corporation (the
"Distributor").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, Distributor is a securities firm engaged in the business of
selling shares of investment companies either directly to purchasers or through
other securities dealers; and
WHEREAS, the Fund proposes to enter into a Distribution Agreement with
Distributor, pursuant to which Distributor will act as the exclusive distributor
and representative of the Fund in the offer and sale of Class D shares of common
stock, par value $.01 per share (the "Class D shares"), of the Fund to the
public; and
WHEREAS, the Fund desires to adopt this Class D Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Investment Company Act, pursuant to
which the Fund will pay an account maintenance fee to Distributor with respect
to the Fund's Class D shares; and
WHEREAS, the Directors of the Fund have determined that there is a
reasonable likelihood that adoption of the Plan will benefit the Fund and its
Class D shareholders.
NOW, THEREFORE, the Fund hereby adopts, and Distributor hereby agrees
to the terms of, the Plan in accordance with Rule 12b-1 under the Investment
Company Act on the following terms and conditions:
1. The Fund shall pay Distributor an account maintenance fee under
the Plan at the end of each month at the annual rate of 0.25% of average
<PAGE>
daily net assets of the Fund relating to Class D shares to compensate
Distributor and securities firms with which Distributor enters into related
agreements pursuant to paragraph 3 hereof ("Sub-Agreements") for account
maintenance activities with respect to Class D shareholders of the Fund.
2. Payments made pursuant to the Plan will be imposed directly
against the assets of the Fund relating to the Class D shares.
3. The Fund hereby authorizes Distributor to enter into
Sub-Agreements with certain securities firms ("Securities Firms") to provide
compensation to such Securities Firms for activities and services of the type
referred to in paragraph 1 hereof. Distributor may reallocate all or a portion
of its account maintenance fee to such Securities Firms as compensation for the
above-mentioned activities and services. Such Sub-Agreements shall provide that
the Securities Firms shall provide Distributor with such information as is
reasonably necessary to permit Distributor to comply with the reporting
requirements set forth in paragraph 4 hereof.
4. Distributor shall provide the Fund for review by the Board of
Directors, and the Directors shall review, at least quarterly, a written report
complying with the requirements of Rule 12b-1 regarding the disbursement of the
account maintenance fee during such period.
5. The Plan shall not take effect until it has been approved by a
vote of at least a majority, as defined in the Investment Company Act, of the
outstanding Class D voting securities of the Fund.
6. The Plan shall not take effect until it has been approved,
together with any related agreements, by votes of a majority of both (a) the
Directors of the Fund and (b) those Directors of the Fund who are not
"interested persons" of the Fund, as defined in the Investment Company Act, and
have no direct or indirect financial interest in the operation of the Plan or
any agreements related to it (the "Rule 12b-1 Directors"), cast in person at a
meeting or meetings called for the purpose of voting on the Plan and such
related agreements.
7. The Plan shall continue in effect for so long as such continuance
is specifically approved at least annually in the manner provided for approval
of the Plan in paragraph 6.
8. The Plan may be terminated at any time by vote of a majority of
the Rule 12b-1 Directors, or by vote of a majority of the outstanding Class D
voting securities of the Fund.
2
<PAGE>
9. The Plan may not be amended to increase materially the rate of
payments by the Fund provided for herein unless such amendment is approved by at
least a majority, as defined in the Investment Company Act, of the outstanding
Class D voting securities of the Fund, and by the Directors of the Fund in the
manner provided for in paragraph 6 hereof, and no material amendment to the Plan
shall be made unless approved in the manner provided for approval and annual
renewal in paragraph 6 hereof.
10. While the Plan is in effect, the selection and nomination of
Directors who are not interested persons, as defined in the Investment Company
Act, of the Fund shall be committed to the discretion of the Directors who are
not interested persons.
11. The Fund shall preserve copies of the Plan and any related
agreements and all reports made pursuant to paragraph 4 hereof, for a period of
not less than six years from the date of the Plan, or the agreements or such
report, as the case may be, the first two years in an easily accessible place.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Plan as of
the date first above written.
THE JUNDT GROWTH FUND, INC.
By: _____________________________________
Title:
U.S. GROWTH INVESTMENTS, INC.
By: _____________________________________
Title:
4
<PAGE>
EXHIBIT 16
Jundt Growth Fund, Inc
06/30/94 - 06/30/95
<TABLE>
<CAPTION>
12 Months 12 Months
Average Annual Total
Total Return Return*
-------------- -----------
<S> <C> <C>
Initial Investment $1,000.00 $1,000.00
Divided by Initial Maximum Offering Price 14.28
----------
Divided by Net Asset Value 13.53
----------
Equals Shares Purchased 70.029 73.910
Plus Shares Acquired through
Dividend Reinvestment 1.629 1.719
---------- ----------
Equals Shares Held at 06/30/95 71.658 75.629
Multiplied by Net Asset Value at 06/30/95 16.40 16.40
---------- ----------
Equals Ending Redeemable Value at
$1,000 Investment (ERV) at 06/30/95 1,175.20 1,240.31
Divided by $1,000 (P) 1.1752 1.2403
Subtract 1 0.1752 0.2403
Expressed as a percentage equals the
Aggregate Total Return for the Period (T) 17.52%
----------
----------
Expressed as a percentage equals the
Aggregate Total Return for the Period 24.03%
----------
----------
ERV divided by P 1.1752
Raise to the power of 1.000
Equals 1.1752
Subtract 1 0.1752
Expressed as a percentage equals the
Average Annualized Total Return 17.52%
----------
----------
</TABLE>
* Does not include sales charge for the period.
<PAGE>
EXHIBIT 16
Jundt Growth Fund, Inc
09/03/91 - 06/30/95
<TABLE>
<CAPTION>
Since Since
Inception Inception
Average Annual Total
Total Return Return*
-------------- -----------
<S> <C> <C>
Initial Investment $1,000.00 $1,000.00
Divided by Initial Maximum Offering Price 14.85
----------
Divided by Net Asset Value 14.07
----------
Equals Shares Purchased 67.342 71.073
Plus Shares Acquired through
Dividend Reinvestment 6.689 7.060
---------- ----------
Equals Shares Held at 06/30/95 74.031 78.133
Multiplied by Net Asset Value at 06/30/95 16.40 16.40
---------- ----------
Equals Ending Redeemable Value at
$1,000 Investment (ERV) at 06/30/95 1,214.10 1,281.38
Divided by $1,000 (P) 1.2141 1.2814
Subtract 1 0.2141 0.2814
Expressed as a percentage equals the
Aggregate Total Return for the Period (T) 21.41%
----------
----------
Expressed as a percentage equals the
Aggregate Total Return for the Period 28.14%
----------
----------
ERV divided by P 1.2141
Raise to the power of 0.2615
Equals 1.0520
Subtract 1 0.0520
Expressed as a percentage equals the
Average Annualized Total Return 5.20%
----------
----------
</TABLE>
* Does not include sales charge for the period.
<PAGE>
THE JUNDT GROWTH FUND, INC.
RULE 18f-3 PLAN
FOR MULTIPLE CLASS DISTRIBUTION SYSTEM
Subject to the conversion of The Jundt Growth Fund, Inc. (the "Fund") to
an open-end management investment company and the filing of amendments to the
Articles of Incorporation of the Fund and appropriate certificates of
designation relating to the separate classes of voting common shares, par
value $0.01 per share ("Shares"), the Fund hereby adopts this plan (the
"Plan") pursuant to Rule 18f-3 under the Investment Company Act of 1940.
1. The Fund shall initially issue four classes of Shares, consisting of
Class A Shares, Class B Shares, Class C Shares and Class D Shares. Except as
otherwise provided herein: each such Class shall be equal in all respects
and have the same rights and obligations as each other Class; and each share
of any Class will represent an identical interest in the investment portfolio
of the Fund.
2. Contemporaneously with the adoption of this Plan, the Fund has
adopted separate distribution plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940 with respect to the Class B Shares, Class C
Shares and Class D Shares. Each such Class of shares shall bear the expense
of the separate Rule 12b-1 plan applicable to it, including the account
maintenance fee and/or distribution fee provided for therein.
3. Shareholder servicing costs attributable solely to a particular
Class, including the incremental transfer agency cost resulting from the
deferred sales charge arrangement relating to the Class B Shares and the
Class C Shares, will be allocated to such Class. Other incremental expenses
that are subsequently identified that are actually incurred in a different
amount by any Class may, subject to obtaining any necessary approvals that
may be required by law with respect to such allocation, be separately
allocated to such Class.
4. Any expenses of the Fund not allocated to a particular Class
pursuant to this Plan shall be allocated to each Class on the basis of the
net asset value of such Class in relation to the net asset value of the Fund.
5. Expenses may be waived or reimbursed by the Fund's adviser,
distributor or any other provider of services to the Fund.
6. The separate Classes of Shares of the Fund shall have the following
characteristics:
(a) CLASS A SHARES. Each of the outstanding shares of common stock
of the Fund at the time of the conversion of the Fund to an open-end
management investment company will be converted into a Class A Share.
It is currently contemplated that Class A Shares will be offered
exclusively to: (a) Fund shareholders at the time of the conversion
of the Fund to an open-end investment company, but only so long as
such shareholders remain Fund shareholders (a liquidation of the
investor's account will terminate his or her privilege to invest in
Class A shares); (b) directors, officers, employees and consultants
of the Fund (including partners and employees of outside legal
counsel to the
<PAGE>
Fund), Jundt Associates, Inc. and U.S. Growth Investments, Inc.,
members of their immediate families, and their lineal ancestors and
descendants; and (c) accounts for the benefit of any of the foregoing.
Class A Shares will be sold at net asset value plus a front-end
sales load as set forth below:
<TABLE>
<CAPTION>
Amount of Sales Load As A Sales Load As A
Transaction Percentage Percentage of
at Offering Price of Offering Price Net Asset Value
----------------- ----------------- ---------------
<S> <C> <C>
Less than $25,000 5.25% 5.54%
$25,000 but less than $50,000 4.75% 4.99%
$50,000 but less than $100,000 4.00% 4.17%
$100,000 but less than $250,000 3.00% 3.09%
$250,000 bus less than $1,000,000 2.00% 2.04%
$1,000,000 and over 0.00% 0.00%
</TABLE>
Investors in Class A Shares may qualify for reduced initial sales
charges through a right of accumulation taking into account an
investor's holdings in all Classes of Fund Shares. Investors who
purchase or accumulate at least $1 million in Fund shares qualify to
add to their investment in Class A Shares of the Fund without the
imposition of a front-end sales charge. Although such investors will
not be subject to front-end sales charge, they will be subject to a
contingent deferred sales charge of 1% (as a percentage of the lower
of original purchase price or redemption proceeds) during the first
year following purchase. Class A Shares will not be subject to a
distribution fee or account maintenance fee. In addition, certain
categories of investors (as specified from time to time in the
current prospectus of Class A Shares) may qualify to purchase Class A
shares at net asset value without the imposition of a front-end or
contingent deferred sales charge.
(b) CLASS B SHARES. Class B Shares will be sold at net asset value
subject to a contingent deferred sales charge of 4.0% (as a
percentage of the lower of original purchase price or redemption
proceeds) during the first and second years following purchase, 3.0%
during the third and fourth years following purchase, 2.0% during the
fifth year following purchase, 1.0% during the sixth year following
purchase and 0.0% following the completion of the sixth year
following purchase. Class B Shares will be subject to an account
maintenance fee at an annual rate of 0.25% on the average daily net
assets of the Fund attributable to Class B Shares and a distribution
fee at an annual rate of 0.75% of such net assets. For purposes of
conversion of Class B Shares to Class D Shares, the 15th day of each
month (or if such day is not a business day, the next following
business day)(1) shall be deemed a "conversion date." On the
conversion date next following the eighth anniversary of the purchase
of a Class B Share, such Share shall automatically convert into Class
D Shares, the conversion ratio being determined by the relative net
asset value of Class B and Class D Shares on the conversion date.
- -----------------------
(1) For purposes hereof, a "business day" means any day other than a Saturday,
a Sunday or a day on which banking or trust institutions in the cities of
Minneapolis, Minnesota and New York, New York, are authorized or obligated by
law, executive order or governmental decree to be closed.
-2-
<PAGE>
(c) CLASS C SHARES. Class C Shares will be sold at net asset value
subject to a contingent deferred sales charge of 1.0% (as a
percentage of the lower of original purchase price or redemption
proceeds) during the first year following purchase. Class C Shares
are subject to an account maintenance fee at an annual rate of 0.25%
on the average daily net assets of the Fund attributable to Class C
Shares and a distribution fee at an annual rate of 0.75% of such net
assets.
(d) CLASS D SHARES. Class D Shares will be sold at net asset value
plus a front-end sales load as set forth below:
<TABLE>
<CAPTION>
Amount of Sales Load As A Sales Load As A
Transaction Percentage Percentage of
at Offering Price of Offering Price Net Asset Value
----------------- ----------------- ---------------
<S> <C> <C>
Less than $25,000 5.25% 5.54%
$25,000 but less than $50,000 4.75% 4.99%
$50,000 but less than $100,000 4.00% 4.17%
$100,000 but less than $250,000 3.00% 3.09%
$250,000 bus less than $1,000,000 2.00% 2.04%
$1,000,000 and over 0.00% 0.00%
</TABLE>
Investors in Class D Shares may qualify for reduced initial sales
charges through a right of accumulation taking into account an
investor's holdings in all Classes of Fund Shares. Investors who
purchase or accumulate at least $1 million in Fund shares qualify to
add to their investment in Class D Shares of the Fund without the
imposition of a front-end sales charge. Although such investors will
not be subject to front-end sales charge, they will be subject to a
contingent deferred sales charge of 1% (as a percentage of the lower
of original purchase price or redemption proceeds) during the first
year following purchase. Class D Shares will be subject to an
account maintenance fee at an annual rate of 0.25% of the average
daily net assets of the Fund attributable to the Class D Shares. In
addition, certain categories of investors (as specified from time to
time in the current prospectus of Class D Shares) may qualify to
purchase Class D shares at net asset value without the imposition of
a front-end or contingent deferred sales charge.
7. Each Class of Shares shall have exclusive voting rights on any matter
submitted to shareholders of the Fund that relates solely to such Class or the
arrangements contained herein relating to allocation of expenses to such Class.
8. Each Class shall have separate voting rights on any matter submitted to
shareholders of the Fund in which the interest of one Class differs from the
interest of any other Class. Before this Plan is amended in any material
respect, a majority of the directors of the Fund, and a majority of the
directors who are not interested persons of the Fund, shall find that the Plan,
as proposed to be amended, including the expense allocation, is in the best
interests of each Class individually and the Fund as a whole. Before any vote
on any such amendment, the directors shall request and evaluate, and any
agreement relating to the arrangements contained in this Plan shall require the
parties thereto to furnish, such information as may be reasonably necessary to
evaluate the Plan and such amendment.
-3-
<PAGE>
CODE OF ETHICS
FOR
JUNDT ASSOCIATES, INC.
AND AFFILIATES
SUMMARY OF SUBSTANTIVE DUTIES
ALL ACCESS PERSONS MUST:
- - III(a) Maintain confidentiality of all completed and contemplated Fund
portfolio transactions.
- - III(b) AND (c) Report all actual and potential conflicts of interest and
contemplated dealings with affiliates of a Fund (in advance of any
contemplated transaction) to the Director of Compliance or General Counsel.
- - III(e) In all personal securities dealings, place the interests of each Fund
first.
- - IV(b) Submit a quarterly report to the Director of Compliance reporting
certain requested information on all permitted transactions in securities.
DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS may simply check the box
indicating they have "no reportable transactions" except where such director
or officer knew or, in the performance of his/her duties, should have known
that during the 15-day period immediately preceding or following any personal
securities transaction, such security was purchased or sold by a Fund or such
purchase or sale was being considered by a Fund or by Jundt Associates.
- - IV(d) Report any actual or apparent violations of the Code of Ethics to the
Director of Compliance.
- - IV(g) Certify initially and annually thereafter, as directed by the Director
of Compliance, that: (i) he/she has read and understands the Code of Ethics,
(iii) he/she is subject to the Code, (iii) he/she has reported all Personal
Securities Transactions, as required by the Code, and (iv) he/she has
complied with all other requirements of the Code.
ACCESS PERSONS, OTHER THAN DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS, MUST:
- - III(f)(1) Refrain from purchasing any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) in which any Fund is permitted to invest.
- - III(f)(2)(A) Refrain from selling any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) on any day during which a Fund has a pending "buy" or
"sell" order for the same "Security."
- - III(g) AND (h) Obtain pre-clearance from the Director of Compliance before
entering into any Personal Securities Transaction not prohibited under the
Code of Ethics and, if approved, direct the executing broker to send
duplicate confirmations and statements to the Director of Compliance.
<PAGE>
ADVISORY PERSONS MUST:
- - OBSERVE ALL DUTIES OF ACCESS PERSONS AND, IN ADDITION, MUST:
- - III(d) Use his/her best judgment in making portfolio decisions involving
a Fund.
- - III(f)(2)(C) Refrain from profiting from the purchase or sale, or sale and
purchase, of the same or equivalent "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper,
shares of mutual funds and Securities in which no Fund is permitted to
invest) within a 60 day period.
- - III(f)(3) Refrain from investing in IPO's.
III(f)(4) Observe certain special limitations (set forth in the Code)
applicable to pre-clearance of private placement transactions.
- - IV(a) Prepare and submit to the Director of Compliance, initially and at the
end of each calendar year thereafter, a listing of all personal securities
holdings.
- - VI(a) Refrain from accepting any gifts or other thing of more than DE
MINIMIS value from any securities broker, dealer, underwriter or placement
agent that does business with or on behalf of any Fund.
- - VI(b) Seek prior approval from the Director of Compliance prior to serving
on any Board of a public company.
PORTFOLIO MANAGERS MUST:
- - OBSERVE ALL DUTIES AND RESPONSIBILITIES OF ADVISORY PERSONS AND ACCESS
PERSONS AND, IN ADDITION, MUST:
- - III(f)(2)(B) Refrain from selling any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) within a seven day period before or after a Fund
trades in the same "Security."
DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS MUST:
- - OBSERVE ALL GENERAL DUTIES OF ACCESS PERSON (EXCEPT FOR DUTIES SPECIFICALLY
NOT APPLICABLE TO DISINTERESTED DIRECTORS AND OUTSIDE OFFICERS, AS SET FORTH
ABOVE) AND, IN ADDITION, MUST:
- - III(f)(2) Refrain from selling any "Security" (which excludes U.S.
Government securities, bankers' acceptances, bank CD's, commercial paper and
shares of mutual funds) on any day during which such Disinterested Director
or Outside Officer has actual knowledge that a Fund has a pending "buy" or
"sell" order for the same "Security."
-2-
<PAGE>
DISINTERESTED DIRECTORS
John E. Clute
Floyd Hall
Demetre M. Nicoloff
Darrell R. Wells
OUTSIDE OFFICER
James E. Nicholson
PORTFOLIO MANAGERS
James E. Jundt
Donald M. Longlet
Thomas L. Press
Marcus E. Jundt
ADVISORY PERSONS
James E. Jundt
Donald M. Longlet
Thomas L. Press
Marcus E. Jundt
Jean Smith
James Rogers
Lynn Halverson
Jean D. Scanlon
ACCESS PERSONS
John E. Clute
Floyd Hall
Demetre M. Nicoloff
Darrell R. Wells
James E. Nicholson
James E. Jundt
Donald M. Longlet
Thomas L. Press
Marcus E. Jundt
Jean Smith
James Rogers
Lynn Halverson
Jean D. Scanlon
Charlotte Bohmer
Julie O'Connell
DIRECTOR OF COMPLIANCE
Jean D. Scanlon
-3-
<PAGE>
CODE OF ETHICS
FOR
JUNDT ASSOCIATES, INC.
AND AFFILIATES
I. PURPOSE AND CONSTRUCTION
This Code of Ethics (the "Code") is adopted by Jundt Associates, Inc.
("Jundt"), U.S. Growth Investments, Inc. ("USG") and the Funds in an effort
to prevent violations of Section 17 of the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations thereunder. The
focus of the Code is the prevention of investment activities by persons with
access to certain information that might be harmful to the interests of the
Funds or that might enable such persons to illicitly profit from their
relationship with the Funds.
II. DEFINITIONS
(a) "ACCESS PERSON" means any director, officer or Advisory Person of
Jundt or a Fund or, with respect to USG, any director or officer who in the
ordinary course of his or her business makes, participates in or obtains
information regarding the purchase or sale of securities for a Fund or whose
functions or duties as part of the ordinary course of his or her business
relate to the making of any recommendation to a Fund regarding the purchase
or sale of securities.
(b) "ADVISORY PERSON" means:
(1) any employee of Jundt or a Fund (or of any company in a
control relationship to Jundt or a Fund) who, in connection with his or
her regular functions or duties, makes, participates in or obtains
information regarding the purchase or sale of a security by a Fund, or
whose functions or duties relate to the making of any recommendations
with respect to such purchases or sales (including, but not limited to,
Portfolio Managers and all Jundt employees who provide information and
advice to Portfolio Managers or who help execute the Portfolio Managers'
decisions, such as securities analysts and traders); or
(2) any natural person in a control relationship to Jundt or
a Fund and who obtains information concerning recommendations made to a
Fund with regard to the purchase or sale of a security.
(c) "AFFILIATED PERSON" of another person means:
(1) any person directly or indirectly owning, controlling or
holding with power to vote five percent (5%) or more of the outstanding
voting securities of such other person;
(2) any person five percent (5%) or more of whose outstanding
voting securities are directly or indirectly owned, controlled or held
with power to vote by such other person;
(3) any person directly or indirectly controlling, controlled
by or under common control with such other person;
(4) any officer, director, partner, co-partner or employee of
such other person;
<PAGE>
(5) if such other person is an investment company, any
investment adviser thereof or any member of an advisory board thereof;
and
(6) if such other person is an unincorporated investment
company not having a board of directors, the depositor thereof.
(d) "BENEFICIAL OWNERSHIP" for purposes of the Code, shall be determined
in accordance with the definition of "beneficial owner" set forth in Rule
16a-1(a)(2) under the Securities Exchange Act of 1934, I.E., a person must
have a "direct or indirect pecuniary interest" to have "beneficial
ownership." Although the following list is not meant to be exhaustive, under
the rule a person would generally be regarded to be the beneficial owner of
the following securities:
(1) securities held in the person's own name;
(2) securities held with another in joint tenancy, community
property or other joint ownership;
(3) securities held be a bank or broker as nominee or
custodian on such person's behalf or pledged as collateral for a loan;
(4) securities held by members of the person's immediate
family sharing the same household;
(5) securities held by a relative not residing in the
person's home if the person is a custodian, guardian or otherwise has
controlling influence over the purchase, sale or voting of such
securities;
(6) securities held by a trust in which the person is a
beneficiary and has or shares the power to make purchase or sale
decisions;
(7) securities held by a trust for which the person serves as
a trustee and in which the person has a pecuniary interest (including
pecuniary interests by virtue of performance fees and by virtue of
holdings by the person's immediate family);
(8) securities held by a general partnership or limited
partnership in which the person is a general partner;
(9) securities owned by a corporation in which the person has
a control position or in which the person has or shares investment
control over the portfolio securities (other than a registered
investment company);
(10) securities in a portfolio giving the person certain
performance-related fees; and
(11) securities held by another person or entity pursuant to
any agreement, understanding, relationship or other arrangement giving
the person any direct or indirect pecuniary interest.
(e) "CONTROL" shall have the same meaning as that set forth in Section
2(a)(9) of the 1940 Act.
-2-
<PAGE>
(f) "DISINTERESTED DIRECTOR" means directors or trustees of a Fund who
are not "interested persons," as defined in the 1940 Act, of the Fund.
(g) "FUND" means any investment company registered under the 1940 Act
for which Jundt acts as an investment adviser.
(h) "MEMBER OF IMMEDIATE FAMILY" of a person includes such person's
spouse, children under the age of twenty-five (25) years residing with such
person, and any trust or estate in which such person or any other member of
his or her immediate family has a substantial beneficial interest, unless
neither such person nor any other member of his or her immediate family is
able to control or participate in the investment decisions of such trust or
estate.
(i) "OUTSIDE FUND OFFICER" means any officer of a Fund who is not
otherwise an "interested person," as defined in the 1940 Act, of the Fund,
Jundt or USG.
(j) "PERSONAL SECURITIES TRANSACTION" means a transaction in a
Security in which an individual has or thereby acquires Beneficial Ownership.
A person shall be considered to be "engaging in" or "effecting" a Personal
Securities Transaction if such a Security is involved, regardless of whether
the transaction is effected by that person or by some other person (such as
an immediate family member).
(k) "PORTFOLIO MANAGER" means a Jundt employee entrusted with the
direct responsibility and authority to make investment decisions affecting a
Fund.
(l) "PURCHASE OR SALE OF A SECURITY" includes, among other things, the
writing of an option to purchase or sell a Security.
(m) "SECURITY" shall have the meaning set forth in Section 2(a)(36) of
the 1940 Act, except that it shall not include securities issued by the
government of the United States, bankers' acceptances, bank certificates of
deposit, commercial paper and shares of registered open-end investment
companies.
(n) "SECURITY HELD OR TO BE ACQUIRED" by a registered investment
company means any Security which, within the most recent fifteen (15) days,
(i) is or has been held by such company, or (ii) is being or has been
considered by such company or its investment adviser for purchase by such
company.
(o) "1940 ACT" means the Investment Company Act of 1940, 15 U.S.C.
Sections 80a-1 to 80a-52, as amended.
III. RESTRICTIONS
(a) NONDISCLOSURE OF INFORMATION. An Access Person shall not divulge
to any person contemplated or completed securities transactions of a Fund,
except in the performance of his or her duties, unless such information
previously has become a matter of public knowledge.
(b) SECTION 17(D) LIMITATIONS. Neither USG, an Affiliated Person of a
Fund or any Affiliated Person of USG or of such Affiliated Person of a Fund,
acting as principal, shall effect any transaction in which a Fund, or a
company controlled by a Fund, is a joint or a joint and several participant
with such person, USG or Affiliated Person, in contravention of such rules
and regulations as the Securities and Exchange Commission may prescribe under
Section 17(d) of the 1940 Act for the
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purpose of limiting or preventing participation by a Fund or controlled
companies on a basis different from or less advantageous than that of such
other participant.
(c) PROSCRIBED ACTIVITIES UNDER RULE 17J-1(A). Rule 17j-1(a) under the
1940 Act provides:
It shall be unlawful for any affiliated person of or
principal underwriter for a registered investment company, or any
affiliated person of an investment adviser of or principal underwriter
for a registered investment company in connection with the purchase or
sale, directly or indirectly, by such person of a security held or to be
acquired, as defined in this section, by such registered investment
company--
(1) To employ any device, scheme or artifice to
defraud such registered investment company;
(2) To make to such registered investment company
any untrue statement of a material fact or omit to state to such
registered investment company a material fact necessary in order to
make the statements made, in light of the circumstances under which
they were made, not misleading;
(3) To engage in any act, practice or course of
business which operates or would operate as a fraud or deceit upon
any such registered investment company; or
(4) To engage in any manipulative practice with
respect to such registered investment company.
Any violation of Rule 17j-1(a) shall be deemed to be a violation of the
Code.
(d) COVENANT TO EXERCISE BEST JUDGMENT. An Advisory Person shall act
on his or her best judgment in effecting, or failing to effect, any
transaction by a Fund, and such Advisory Person shall not take into
consideration his or her personal financial situation in connection with
decisions regarding portfolio transactions by a Fund.
(e) GENERAL PRINCIPLES OF PERSONAL INVESTING. No Access Person shall
engage in any Personal Securities Transaction that such Access Person has
reason to know will be detrimental to the best interest of any Fund. When
engaging in a Personal Securities Transaction, an Access Person shall:
(1) place the interests of the Funds first;
(2) conduct such transaction in a manner consistent with the
Code and in such a manner as to avoid any actual or potential conflict
of interest or abuse of any such person's position of trust and
responsibility as an Access Person; and
(3) not take inappropriate advantage of such person's position in
relationship to the Funds.
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<PAGE>
(f) LIMITATION ON PERSONAL SECURITIES TRANSACTIONS.
(1) PROHIBITION ON PERSONAL SECURITIES TRANSACTIONS BY CERTAIN
ACCESS PERSONS. No Access Person (other than Disinterested Directors
and Outside Fund Officers) shall purchase any Security that any Fund is
permitted, pursuant to its investment objectives and policies, to own.
(2) LIMITATIONS RELATED TO TIMING OF TRANSACTIONS. The timing of
Personal Securities Transactions not prohibited under paragraph
III(f)(1)--including, but not limited to, any proposed sale by an Access
Person (other than a Disinterested Director or an Outside Fund Officer)
of a Security that a Fund is permitted to own--shall be limited as
follows:
(A) No Access Person shall engage in a Personal Securities
Transaction on a day during which a Fund has a pending "buy" or
"sell" order for the same Security until that order is executed or
withdrawn. For purposes of this paragraph (A), Access Person shall
not include any Disinterested Director or Outside Fund Officer
unless such Disinterested Director or Outside Fund Officer has
actual knowledge that a Fund has a pending "buy" or "sell" order
for the same Security.
(B) No Portfolio Manager shall engage in a Personal Securities
Transaction within a seven (7) day period before or after a Fund
that he or she manages trades in the same Security.
(C) Advisory Persons shall not profit from the purchase and
sale, or sale and purchase, of the same (or equivalent) Securities
within sixty calendar days. For purposes of this paragraph (C),
"Securities" shall not be deemed to include any securities which
may not be purchased by any Fund because of investment limitations
set forth in the Funds' Registration Statements filed with the
Securities and Exchange Commission. The Director of Compliance may
grant an exception to this provision in cases of personal hardship
or other appropriate circumstances.
(3) INITIAL PUBLIC OFFERING LIMITATIONS. Advisory Persons shall
not engage in any Personal Securities Transaction that involves the
purchase of Securities in an initial public offering.
(4) PRIVATE PLACEMENT LIMITATIONS. Investments in privately placed
Securities shall be limited as follows:
(A) Advisory Persons shall not engage in any Personal
Securities Transaction that involves a private placement of
Securities without the express prior approval of the Director of
Compliance. In reviewing any such approval request, the Director
of Compliance shall consider, among other factors, whether the
investment opportunity should be reserved for a Fund and its
shareholders, and whether the opportunity is being offered to the
requesting individual by virtue of his or her position with the
Funds and Jundt.
(B) Advisory Persons who have a Beneficial Ownership interest
in any Securities obtained through a private placement shall
disclose such interest to the Director of Compliance if and when
they should become involved in any subsequent consideration of an
investment in the same issuer for any of the Funds. In such case,
the decision to invest in the Securities of such an issuer on
behalf of a Fund shall be subject
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to the review and approval of an individual categorized as an
Advisory Person who has no personal interest in such issuer, which
individual shall be appointed by the Director of Compliance.
(5) REPORTS. The Director of Compliance shall maintain and make
available written records of all actions taken under this Section III(f)
in the manner required by Rule 17j-1(d) under the 1940 Act.
(g) PRIOR CLEARANCE OF PERSONAL SECURITIES TRANSACTIONS. Prior to
effecting a Personal Securities Transaction, an Access Person (other than a
Disinterested Director or an Outside Fund Officer) shall notify the Director
of Compliance of the proposed transaction, including the amount of the
transaction and the Security involved. The Director of Compliance, after
investigation, shall determine whether such transaction is consistent with
the Code and shall promptly communicate such determination to the Access
Person making the request. Transaction clearances must be obtained no more
than two days prior to making a purchase or sale of a Security. If the trade
is not made within two days of the date of clearance, a new clearance must be
obtained. Absent extraordinary circumstances, no Access Person shall be
deemed to have violated the Code for effecting a Personal Securities
Transaction if such Access Person has been advised by the Director of
Compliance that the transaction would be consistent with the Code. The
Director of Compliance shall maintain and make available written records of
all actions taken under this Section III(g) in the manner required by Rule
17j-1(d) under the 1940 Act.
(h) COPIES OF BROKERAGE REPORTS. When an Access Person (other than a
Disinterested Director or an Outside Fund Officer) engages in a Personal
Securities Transaction, the Access Person shall direct that the executing
broker send a duplicate copy of the confirmation to the Director of
Compliance at the same time as it is provided to such Access Person. Such
Access Person shall also direct such broker to provide duplicate copies of
any periodic statements on any account maintained by such person (or any
other account in which such Access Person has a Beneficial Ownership
interest) to the Director of Compliance.
IV. REPORTING REQUIREMENTS
(a) INITIAL AND ANNUAL REPORTS BY ADVISORY PERSONS. All Advisory Persons
shall submit to the Director of Compliance a report of all Securities owned
by them (or in which they otherwise have a Beneficial Ownership interest) at
the time that they commence employment with Jundt and shall also submit such
a report to the Director of Compliance at the end of each calendar year
thereafter.
(b) QUARTERLY REPORT. No later than ten (10) days after the end of each
calendar quarter, each Access Person shall submit a report to the Director of
Compliance who shall specify the following information with respect to
transactions during the then ended calendar quarter in any Security in which
such Access Person has, or by reason of such transaction acquired, any direct
or indirect Beneficial Ownership:
(1) the date of the transaction, the title and the number of shares,
and the principal amount of each Security involved;
(2) the nature of the transaction (I.E., purchase, sale or any other
type of acquisition or disposition);
(3) the price at which the transaction was effected; and
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<PAGE>
(4) the name of the broker, dealer or bank with or through whom the
transaction was effected.
If no transactions have occurred during the period, the report shall so
indicate. Any report required to be made pursuant to this Section IV(b) may
contain a statement that the report shall not be construed as an admission by
the person making the report that he or she has any direct or indirect
Beneficial Ownership in the Security to which the report relates.
(c) LIMITATIONS ON REPORTING REQUIREMENTS. Notwithstanding the
provisions of Section IV(b), no Access Person shall be required to make a
report:
(1) with respect to transactions effected for any account over which
such person does not have any direct or indirect influence or control;
(2) if such a person is a Disinterested Director or an Outside Fund
Officer, EXCEPT where such Disinterested Director or Outside Fund
Officer knew or, in the ordinary course of fulfilling his or her
official duties as a Disinterested Director or Outside Fund Officer,
should have known that during the 15-day period immediately preceding or
after the date of the transactions in a Security by the Disinterested
Director or Outside Fund Officer, such Security is or was purchased or
sold by a Fund or such purchase or sale by a Fund is or was considered
by a Fund or Jundt; or
(3) where a report made to Jundt would duplicate information
recorded pursuant to Rules 204-2(a)(12) or 204-2(a)(13) under the
Investment Advisers Act of 1940.
(d) DUTY TO REPORT VIOLATIONS. Any person subject to the Code who
discovers a violation or apparent violation of the Code by any other person
shall bring the matter to the attention of the Director of Compliance.
(e) FILING OF REPORTS. All reports prepared pursuant to this Article
IV shall be filed with the Director of Compliance, except that reports
prepared by the Director of Compliance shall be filed with the Chief
Executive Officer of Jundt.
(f) REPORTS TO THE FUNDS' BOARDS OF DIRECTORS. At each quarterly
meeting of the Funds' Boards of Directors, Jundt shall report to the Board
any violations of the Code, if any, that occurred since Jundt's most recent
prior report to the Boards of Directors.
In addition, Jundt shall prepare an annual report to the Funds' Board(s)
of Directors containing the following:
(1) a summary of existing procedures concerning personal investing
and any changes in the procedures made during the past year;
(2) a list of any violations requiring significant remedial action
during the past year, including details of such violations and the action
taken; and
(3) any recommended changes in existing restrictions or procedures
based upon experience under the Code, evolving industry practices or
developments in applicable laws or regulations.
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<PAGE>
(g) CERTIFICATION OF COMPLIANCE. All Access Persons must certify
annually in writing to the Director of Compliance that (1) they have read and
understand the Code and recognize that they are subject to the Code, (2) they
have disclosed or reported all Personal Securities Transactions required to
be disclosed or reported pursuant to the Code, and (3) they have complied
with all requirements of the Code. The Director of Compliance shall maintain
and make available copies of such written certifications in the manner
required by Rule 17j-1(d) under the 1940 Act.
V. ENFORCEMENT AND SANCTIONS
(a) GENERAL. The Director of Compliance shall bring all violations or
apparent violations of the Code to the attention of the Chairman of Jundt.
The Chairman of Jundt shall have the primary responsibility for enforcing the
Code and determining appropriate sanctions with respect to such company's
directors, officers and employees. If the alleged violator is the Chairman
of Jundt, the Director of Compliance shall bring such alleged violation to
the attention of the Funds' Board of Directors, who shall have the primary
responsibility for enforcing the Code and determining appropriate sanctions
with respect to such alleged violation. If the alleged violator is a
Disinterested Director or is otherwise not an director, officer or employee
of Jundt or USG, the Board of Directors of the affected Fund or Funds shall
have the primary responsibility for enforcing the Code and determining
appropriate sanctions. In addition to the sanctions prescribed by Section
V(b), any person who is found to have violated the Code may be permanently
dismissed, reduced in salary or position, temporarily suspended from
employment or sanctioned in such other manner as may be determined in the
discretion of the applicable person or persons responsible for enforcing the
Code. In determining appropriate sanctions to be imposed for violations of
the Code, the person or persons charged with enforcing the Code may consider
any factors they deem relevant, including, without limitation:
(1) the degree of willfulness' of the violation;
(2) the severity of the violation;
(3) the extent, if any, to which the violator profited or
benefited from the violation;
(4) the adverse effect, if any, of the violation on the involved
Fund;
(5) the market value and liquidity of the class of Securities
involved in the violation;
(6) the prior violations of the Code, if any, by the violator;
(7) the circumstances of discovery of the violation; and
(8) if the violation involved the purchase or sale of Securities in
violation of the Code, (A) the price at which the purchase or sale was
made, and (B) the violator's justification for making the purchase or
sale, including the violator's tax situation, the extent of the
appreciation or depreciation of the Securities involved, and the period
the Securities have been held.
(b) VIOLATIONS OF SECTION III(F). In addition to any sanction imposed
under Section V(a) of the Code, any profits realized on Personal Securities
Transactions effected in violation of Section III(f) of the Code must be
disgorged and contributed to the appropriate Fund. Each Personal Securities
Transaction will be considered individually, and there will be no netting of
profits and losses incurred in the case of multiple Personal Securities
Transactions effected in violation of the Code. In the event of a
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<PAGE>
violation involving more than one Fund, profits shall be allocated among the
affected Funds in proportion to the relative net asset values of the Funds as
of the date of the violation. Should the violation not involve any of the
Funds, profits shall be paid to a charitable organization chosen in the
discretion of the Disinterested Directors of the Funds.
(c) RIGHTS OF ALLEGED VIOLATOR. A person charged with a violation of the
Code shall have the opportunity to appear before the person or persons as may
have authority to impose sanctions pursuant to the Code, at which time such
person shall have the opportunity, orally or in writing, to respond to any
and all charges.
(d) NOTIFICATION TO FUND GENERAL COUNSEL. The applicable Fund's General
Counsel shall be advised promptly of the initiation and outcome of any
enforcement actions hereunder.
(e) NON-EXCLUSIVITY OF SANCTIONS. The imposition of sanctions under this
Section V shall not preclude the imposition of additional sanctions by the
Board(s) of Directors of the Funds and shall not be deemed a waiver of any
rights by any Fund.
VI. GIFTS AND DIRECTORSHIPS
(a) GIFTS. Advisory Persons shall not accept any gift or other thing of
more than DE MINIMIS value from any securities broker, dealer, underwriter or
placement agent that does business with or on behalf of any Fund.
(b) SERVICE AS A DIRECTOR. Advisory Persons may not serve as directors
of publicly traded companies without the prior written authorization of the
Director of Compliance. The Director of Compliance shall not provide such
authorization unless he or she finds that such board service would be
consistent with the interests of the Funds and their shareholders. Should
any person receive such authorization, any investments by the Funds in the
securities of any such publicly traded company while such person is serving
as a director will be required to be approved in advance, in writing, by the
Director of Compliance.
VII. MISCELLANEOUS PROVISIONS
(a) IDENTIFICATION OF ACCESS PERSONS, ADVISORY PERSONS AND PORTFOLIO
MANAGERS. Jundt shall, on behalf of itself, the Funds and USG, identify all
Access Persons who are under a duty to make reports under Article IV and
shall inform such persons of such duty. Jundt shall likewise identify all
individuals who are classified as Advisory Persons and Portfolio Managers
hereunder and inform such persons of such classifications.
(b) MAINTENANCE OF RECORDS. Jundt shall, on behalf of the Funds and USG,
maintain and make available records as required by Rule 17j-1(d).
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REPORT PURSUANT TO ARTICLE IV
OF THE CODE OF ETHICS FOR
JUNDT ASSOCIATES, INC. AND AFFILIATES
INSTRUCTIONS:
(1) Not later than ten (10) days after the end of each calendar
quarter, each Access Person shall submit this Report, as provided by the Code
of Ethics (the "Code"). The Code should be reviewed before completing the
Report; terms defined in the Code have the same meanings in this Report.
(2) No Report need be filed under the circumstances set forth in
Section IV(c) of the Code.
(3) If no reportable transactions have occurred during the period, put
an "X" in the following box / /, and you may skip to the signature line.
(4) This Report may contain a statement that it shall not be construed
as an admission by the person making the Report that he has any direct or
indirect Beneficial Ownership in the Security to which the Report relates.
(5) If you must file this Report and transactions have occurred during
the period, set forth the following information with respect to transactions
during the most recently ended calendar quarter in any Security in which you
have, or by reason of such transaction acquired, any direct or indirect
beneficial ownership in the Security:
<TABLE>
<CAPTION>
Broker,
Date and Nature Price Dealer or
Title and of Transaction Transaction Bank Through
Name of Number of (i.e., purchase, was Whom Transfer
Issuer Shares or Units Sale or Other) Effected Effected
------- --------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C>
</TABLE>
(If you need additional space, please attach additional pages.)
(7) Questions regarding the completion of this Report may be
directed to James E. Nicholson at (612) 336-3203 or to Matthew L. Thompson at
(612) 336-3359.
The answers to the foregoing are true and correct to the best of my
information and belief.
Dated: _______________________ __________________________________
Signature of Person Filing Report
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THE JUNDT GROWTH FUND, INC.
POWER OF ATTORNEY
TO SIGN REGISTRATION STATEMENT
AND AMENDMENTS THERETO
The undersigned, duly elected directors and officers of The Jundt Growth
Fund, Inc. (the "Company"), hereby appoint James R. Jundt and Donald M. Longlet,
or either of them, on their behalf as directors and/or officers of the Company,
as attorney-in-fact and agent to do any and all acts and things, and execute in
their names any and all instruments, which said attorneys and agents my deem
necessary or advisable to enable the Company to comply with the Investment
Company Act of 1940, the Securities Act of 1933, any requirements of the
Securities and Exchange Commission in respect thereof and any state securities
laws, in connection with the registration under said Acts of the Company and the
shares of the Company and the offerings of shares of the Company including
specifically power and authority to sign their names to any and all
Notifications of Registration and Registration Statements to be filed with the
Securities and Exchange Commission under either of said Acts in respect to the
Company and such shares of the Company, and any amendments (including pre-
effective and post-effective amendments) or applications for amendment or
supplements of or to such Notifications of Registration and Registration
Statements, and to file the same with the Securities and Exchange Commission;
and the undersigned do hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said agents and attorneys shall have, and may exercise, without the
others, all the powers conferred hereby.
IN WITNESS WHEREOF, the undersigned have signed their names hereto as of
the 4th day of October, 1995.
/s/ James R. Jundt /s/ Darrell R. Wells
- ------------------------------------- ------------------------------
James R. Jundt Darrell R. Wells
Director, Chairman of the Board, Director
President and Chief Executive Officer
(Principal Executive Officer)
/s/ Donald M. Longlet /s/ John E. Clute
- ------------------------------------- ------------------------------
Donald M. Longlet John E. Clute
Vice President and Treasurer Director
(Principal Financial and Accounting Officer)
/s/ Demetre M. Nicoloff /s/ Floyd Hall
- ------------------------------------ ------------------------------
Demetre M. Nicoloff Floyd Hall
Director Director
