<PAGE>
THE JUNDT GROWTH FUND, INC.
1550 UTICA AVENUE SOUTH, SUITE 950
MINNEAPOLIS, MINNESOTA 55416
(800) 370-0612
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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 "RISK
FACTORS" AND "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
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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.
RISK FACTORS
An investment in the Fund is subject to certain risks, as detailed under
"Investment Objective and Policies." As with other mutual funds, there can be no
assurance that the Fund will achieve its investment objective, and an investment
in the Fund will fluctuate in value (corresponding to the value of the Fund's
underlying investments).
In normal market conditions, the Fund may invest up to 35% of its total
assets in short-term, fixed-income securities, and may temporarily invest
greater than 35% of its assets in such securities when the Investment Adviser
believes that market conditions warrant a defensive investment posture. The
value of fixed-income securities typically varies inversely with changes in
market interest rates. See "Investment Objective and Policies -- Investment
Policies."
The Fund may invest up to 20% of its total assets in securities of foreign
issuers. Such investments involve risks not typically associated with
investments in securities of domestic companies, including the risk of decline
in the value of the applicable foreign currency against the U.S. dollar,
potential political and economic instability in such countries, limited
liquidity and price volatility. See "Investment Objective and Policies --
Investment Policies."
The Fund may engage to a limited extent in certain other investments and
investment techniques, including entering into repurchase agreements, lending
portfolio securities, and purchasing and selling stock index futures contracts,
options on stock indices, stock options and options on stock index futures
contracts. The use of each of these financial techniques involves certain
additional risk and may increase the volatility of an investment in the Fund.
Certain of these techniques are referred to generically as "derivatives" -- a
term that has been used to identify a variety of financial instruments whose
values are based upon, or "derived" from, certain underlying indices, reference
rates, securities, commodities, or other assets. See "Investment Objective and
Policies -- Repurchase Agreements," " -- Lending of Portfolio Securities" and "
- -- Futures and Options Transactions" and Appendix A to this Prospectus.
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
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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.
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>
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(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."
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(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.
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>
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(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.
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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
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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
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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
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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;" therefore, consistent with the rules and regulations of the Commodity
Futures Trading Commission, the Fund will not purchase or sell futures contracts
or related options if, as a result, the sum of the initial margin deposit on the
Fund's existing futures and related options positions and premiums paid for
options on futures contracts entered into for other than bona fide hedging
purposes would exceed 5% of the Fund's assets.
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
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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, 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
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<PAGE>
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 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
10
<PAGE>
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 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.
11
<PAGE>
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 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.
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.
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 D shares
(or, if eligible to purchase Class A shares, Class A shares) of the Fund at net
asset value because it falls into the following category of investors:
<PAGE>
(CHECK ALL BOXES THAT APPLY)
/ / 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 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
Risk Factors.......................... 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.
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-4
Advisory, Administrative and Distribution Agreements...................................................... B-5
Special Purchase Plans.................................................................................... B-9
Monthly Cash Withdrawal Plan.............................................................................. B-11
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.
9. Purchase puts, calls, straddles, spreads and any combination thereof
if by reason thereof the value of the Fund's aggregate investment in such
instruments (at the time of purchase) will exceed 5% of its total assets.
10. Purchase or retain the securities of any issuer if the Investment
Adviser or any officer or director of the Fund or the Investment Adviser
that individually owns 1/2 of 1% of the total outstanding securities of such
issuer collectively own more than 5% of the outstanding securities of such
issuer.
11. Invest more than 5% of its total assets collectively in restricted
securities AND in securities of issuers which, together with their
predecessors, have a record of less than three years of continuous
operations.
B-3
<PAGE>
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. If and to the extent that the Fund invests in
the securities of other investment companies, the Investment Adviser will not
charge duplicate investment management fees on such investments.
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 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
B-4
<PAGE>
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 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.
B-5
<PAGE>
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 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;
B-6
<PAGE>
(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
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
B-7
<PAGE>
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, 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.
B-8
<PAGE>
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 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.
B-9
<PAGE>
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).
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.
B-10
<PAGE>
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.
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
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<PAGE>
shareholders, performance may be stated in terms of "average annual total
return" or "cumulative 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
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<PAGE>
prior to the Open-End Conversion can be restated to reflect the imposition of
the applicable FESC or 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
