As filed with the Securities and Exchange Commission on December 16, 1998
Securities Act File No. 333-60019
Investment Company Act File No. 811-6669
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. Post-Effective Amendment No. 1
(Check appropriate box or boxes)
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MERRILL LYNCH FUNDAMENTAL GROWTH FUND, INC.
(Exact name of Registrant as specified in its charter)
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(609) 282-2800
(Area code and telephone number)
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800 Scudders Mill Road
Plainsboro, New Jersey 08536
(Address of principal executive offices:
Number, street, city, state, zip code)
--------------------------------
Arthur Zeikel
Merrill Lynch Fundamental Growth Fund, Inc.
800 Scudders Mill Road, Plainsboro, New Jersey 08536
Mailing Address: P.O. Box 9011, Princeton, New Jersey 08543-9011
(Name and address of agent for service)
Copies to:
Frank P. Bruno, Esq. Michael J. Hennewinkel, Esq.
Brown & Wood LLP Merrill Lynch Asset Management
One World Trade Center 800 Scudders Mill Road
New York, NY 10048-0557 Plainsboro, NJ 08536
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Title of Securities to Be Registered: Common Stock, par value $.10 per share
No filing fee is required because of reliance on Section 24(f) of the
Investment Company Act of 1940, as amended.
This amendment consists of the following:
(1) Facing Sheet of the Registration Statement
(2) Part C to the Registration Statement (including signature page).
Parts A and B are incorporated by reference from Pre-Effective Amendment No. 1
to this Registration Statement (File No. 333-60019) filed on September 4, 1998.
This amendment is being filed solely to file as Exhibit No. 12 to this
Registration Statement the opinion of Brown & Wood LLP with respect to certain
tax matters.
PART C. OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
Reference is made to Article V of Registrant's Amended and Restated
Articles of Incorporation, Article VI of Registrant's By-Laws, Section 2-418 of
the Maryland General Corporation Law and Section 9 of the Class A, Class B,
Class C and Class D Distribution Agreements.
Article VI of the By-Laws provides that each officer and director of
the Registrant shall be indemnified by the Registrant to the full extent
permitted under the General Laws of the State of Maryland, except that such
indemnity shall not protect any such person against any liability to the
Registrant or any stockholder thereof to which such person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office. Absent a
court determination that an officer or director seeking indemnification was not
liable on the merits or guilty of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office, the decision by the Registrant to indemnify such person must be based
upon the reasonable determination of independent counsel or non-party
independent directors, after review of the facts, that such officer or director
is not guilty of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.
Each officer and director of the Registrant claiming indemnification
within the scope of Article VI of the By-Laws shall be entitled to advances from
the Registrant for payment of the reasonable expenses incurred by him in
connection with proceedings to which he is a party in the manner and to the full
extent permitted under the General Laws of the State of Maryland; provided,
however, that the person seeking indemnification shall provide to the Registrant
a written affirmation of his good faith belief that the standard of conduct
necessary for indemnification by the Registrant has been met and a written
undertaking to repay any such advance, if it should ultimately be determined
that the standard of conduct has not been met, and provided further that at
least one of the following additional conditions is met: (a) the person seeking
indemnification shall provide a security in form and amount acceptable to the
Registrant for his undertaking; (b) the Registrant is insured against losses
arising by reason of the advance; (c) a majority of a quorum of non-party
independent directors, or independent legal counsel in a written opinion, shall
determine, based on a review of facts readily available to the Registrant at the
time the advance is proposed to be made, that there is reason to believe that
the person seeking indemnification will ultimately be found to be entitled to
indemnification.
The Registrant may purchase insurance on behalf of an officer or
director protecting such person to the full extent permitted under the General
Laws of the State of Maryland from liability arising from his or her activities
as an officer or director of the Registrant. The Registrant, however, may not
purchase insurance on behalf of any officer or director of the Registrant that
protects or purports to protect such person from liability to the Registrant or
to its stockholders to which such officer or director would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his or her office.
The Registrant may indemnify, make advances or purchase insurance to
the extent provided in Article VI of the By-Laws on behalf of an employee or
agent who is not an officer or director of the Registrant.
In Section 9 of the Class A, Class B, Class C and Class D Distribution
Agreements relating to the securities being offered hereby, the Registrant
agrees to indemnify the Distributor and each person, if any, who controls the
Distributor within the meaning of the Securities Act of 1933 (the "1933 Act"),
against certain types of civil liabilities arising in connection with the
Registration Statement or Prospectus and Statement of Additional Information.
Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to Directors, officers and controlling persons of the
Registrant and the principal underwriter pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a Director, officer, or
controlling person of the Registrant and the principal underwriter in connection
with the successful defense of any action, suit or proceeding) is asserted by
such Director, officer or controlling person or the principal underwriter in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS.
(1)(a) -- Articles of Incorporation of the Registrant, dated April 29, 1992.(a)
(b) -- Articles of Amendment, dated July 7, 1992, to Articles of
Incorporation of Registrant. (a)
(c) -- Articles of Amendment, dated October 17, 1994, to Articles of
Incorporation of Registrant. (a)
(d) -- Articles of Amendment, dated October 17, 1994, to Articles of
Incorporation of Registrant. (a)
(e) -- Articles Supplementary, dated October 17, 1994, to Articles of
Incorporation of Registrant. (a)
(2) -- By-Laws of the Registrant. (a)
(3) -- Not applicable.
(4) -- Form of Agreement and Plan of Reorganization between the Registrant
and Merrill Lynch Fund For Tomorrow, Inc. (i)
(5) -- Copies of instruments defining the rights of stockholders, including
the relevant portions of the Articles of Incorporation, and the
By-Laws of the Registrant. (b)
(6)(a) -- Management Agreement between Registrant and Merrill Lynch Asset
Management, L.P. (a)
(b) -- Supplement to Management Agreement between Registrant and Merrill
Lynch Asset Management, L.P. (c)
(c) -- Form of Sub-Advisory Agreement between Merrill Lynch Asset Management,
L.P. and Merrill Lynch Asset Management U.K. Limited. (e)
(7)(a) -- Form of Class A Distribution Agreement between the Registrant and the
Merrill Lynch Funds Distributor, Inc. (now known as Princeton Funds
Distributor, Inc.) (the "Distributor"). (including Selected Dealers
Agreement). (c)
(b) -- Form of Class B Distribution Agreement between Registrant and the
Distributor (including Selected Dealers Agreement). (c)
(c) -- Form of Class C Distribution Agreement between Registrant and the
Distributor (including Selected Dealers Agreement). (c)
(d) -- Form of Class D Distribution Agreement between Registrant and the
Distributor (including Selected Dealers Agreement). (c)
(8) -- None.
(9) -- Custody Agreement between the Registrant and The Chase Manhattan Bank.
(a)
(10)(a)-- Form of Class B Distribution Plan and Class B Distribution Plan
Sub-Agreement of Registrant). (c)
(b) -- Form of Class C Distribution Plan and Class C Distribution Plan
Sub-Agreement of Registrant). (c)
(c) -- Form of Class D Distribution Plan and Class D Distribution Plan
Sub-Agreement of Registrant). (c)
(d) -- Merrill Lynch Select Pricing(Service Mark) System Plan pursuant to
Rule 18f-3. (d)
(11) -- Opinion and Consent of Brown & Wood LLP, counsel for the Registrant.
(h)
(12) -- Opinion of Brown & Wood LLP with respect to certain tax matters.
(13) -- Not applicable.
(14)(a)-- Consent of Ernst & Young LLP, independent auditors for the Registrant.
(h)
(b)-- Consent of Deloitte & Touche LLP, independent auditors for Merrill
Lynch Fund For Tomorrow, Inc. (h)
(15) -- Not applicable.
(16) -- Power of Attorney. (g)
17(a) -- Prospectus dated November 26, 1997, and Statement of Additional
Information dated November 26, 1997 of the Registrant. (h)
(b) -- Annual Report to Stockholders of the Registrant for the year ended
August 31, 1997. (h)
(c) -- Semi-Annual Report to Stockholders of the Registrant for the six
months ended February 28, 1998. (h)
(d) -- Prospectus dated April 30, 1998, and Statement of Additional
Information dated April 30, 1998, of Merrill Lynch Fund For Tomorrow,
Inc. (h)
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(a) Filed on December 21, 1995, as an Exhibit to Post-Effective Amendment
No. 4 to the Registrant's Registration Statement on Form N-1A (File
No. 33-47875) under the Securities Act of 1933, (the "Registration
Statement on Form N-1A").
(b) Reference is made to Article II, Article IV, Article V (sections 2,3,4
and 6), Article VI, Article VII and Article IX of the Registrant's
Articles of incorporation, previously filed as Exhibit (1) to the
Registration Statement on Form N-1A, and to Article II, Article III
(sections 1,3,5,6 and 17), Article VI, Article VII, Article XII,
Article XIII and Article XIV of the Registrant's By-Laws previously
filed as Exhibit (2) to the Registration Station on Form N-1A.
(c) Filed on October 13, 1994 as an Exhibit to Post-Effective Amendment
No. 3 to the Registrant's Registration Statement on Form N-1A.
(d) Incorporated by reference to Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A of Merrill Lynch New York
Municipal Bond Fund of Merrill Lynch Multi-State Municipal Series
Trust filed January 25, 1996.
(e) Filed on December 23, 1996, as an Exhibit to Post-Effective Amendment.
No. 5 to the Registrant's Registration Statement on Form N-1A.
(f) Filed with this Post-Effective Amendment No. 1 to the Registration
Statement on Form N-14 filed on July 28, 1998 (File No.333-60019)
under the Securities Act of 1933 (the "Registration Statement on Form
N-14").
(g) Included on the signature page of the Registrant's Registration
Statement on Form N-14 filed on July 28, 1998 and incorporated by
reference herein.
(h) Filed on September 4, 1998, as an Exhibit to Pre-Effective Amendment
No. 1 to the Registration Statement on Form N-14.
(i) Included as Exhibit I to the Proxy Statement and Prospectus contained
in Pre-Effective Amendment No. 1 to Registrant's Registration
Statement on Form N-14.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through use of a prospectus which is
part of this Registration Statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933,
as amended, the reoffering prospectus will contain information called for by the
applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by other items of the
applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the Securities Act of 1933, as
amended, each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of securities at
that time shall be deemed to be the initial bona fide offering of them.
(3) The Registrant undertakes to file, by post-effective amendment,
either a copy of the Internal Revenue Service private letter ruling applied for
or the opinion of counsel received as to certain tax matters, within a
reasonable time after receipt of such ruling or opinion.
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement
has been signed on behalf of the Registrant, in the Township of Plainsboro and
State of New Jersey, on the 16th day of December, 1998.
MERRILL LYNCH FUNDAMENTAL GROWTH FUND, INC.
(Registrant)
By /s/ Arthur Zeikel
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Arthur Zeikel, President
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
SIGNATURES TITLE DATE
ARTHUR ZEIKEL* President and Director and Director
- --------------------------------------- (Principal Executive Officer)
(Arthur Zeikel)
GERALD M. RICHARD* Treasurer (Principal Financial and
- --------------------------------------- Accounting Officer)
(Gerald M. Richard)
JOE GRILLS* Director
- ---------------------------------------
(Joe Grills)
WALTER MINTZ* Director
- ---------------------------------------
(Walter Mintz)
ROBERT S. SALOMON, JR.* Director
- ---------------------------------------
(Robert S. Salomon, Jr.)
MELVIN R. SEIDEN* Director
- ---------------------------------------
(Melvin R. Seiden)
- --------------------------------------- Director
(Stephen B. Swensrud)
*By: /s/ ARTHUR ZEIKEL December 16, 1998
- --------------------------------------
(Arthur Zeikel, Attorney-in-Fact)
Brown & Wood LLP
One World Trade Center
New York, N.Y. 10048-0557
November 23, 1998
Merrill Lynch Fundamental Growth Fund, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Merrill Lynch Fund For Tomorrow, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Re: Reorganization of Merrill Lynch Fundamental Growth
Fund, Inc. and Merrill Lynch Fund For Tomorrow, Inc.
Ladies and Gentlemen:
You have requested our opinion as to certain Federal income tax
consequences of the reorganization ("Reorganization") of Merrill Lynch
Fundamental Growth Fund, Inc. ("Fundamental Fund"), and Merrill Lynch Fund For
Tomorrow, Inc. ("Tomorrow Fund"). Tomorrow Fund will transfer all of its
assets to the Fundamental Fund, in exchange solely for voting shares of
Fundamental Fund. This will be followed by the distribution of all of such
shares to shareholders of Tomorrow Fund in exchange for their shares of
Tomorrow Fund. After the Reorganization, Tomorrow Fund will cease to operate,
will have no assets remaining, will have final Federal and state (if any) tax
returns filed on its behalf and will have all of its shares cancelled under
Maryland law. This opinion letter is furnished pursuant to (i) the section
entitled "Tax Consequences of the Exchange" in the Combined Proxy Statement
and Prospectus and (ii) sections 8(f) and 9(g) of the Agreement and Plan of
Reorganization dated September 4, 1998, by and between Fundamental Fund and
Tomorrow Fund (the "Plan") as a condition of closing. All terms used herein,
unless otherwise defined, are used as defined in the Plan.
In rendering our opinion, we have reviewed and relied upon (a) the
Plan, (b) the Combined Proxy Statement and Prospectus included as part of the
registration statement on Form N-14 filed under the Securities Act of 1933
("Registration Statement") and (c) certain representations concerning the
Reorganization made by Fundamental Fund and Tomorrow Fund in letters dated
November 20, 1998 (the "Representations").
<PAGE>
Based upon current law, including cases and administrative
interpretations thereof and on the reviewed materials listed above, it is our
opinion that:
1. The acquisition by Fundamental Fund of all of the assets of Tomorrow
Fund in exchange solely for Fundamental Fund shares as provided herein will
qualify as a reorganization within the meaning of section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the "Code"), and Fundamental Fund
and Tomorrow Fund will each be a party to the Reorganization within the
meaning of section 368(b) of the Code.
2. Tomorrow Fund will not recognize any gain or loss on either the
transfer of its assets to Fundamental Fund in exchange solely for voting
shares of Fundamental Fund or on the distribution of the Fundamental Fund
shares to Tomorrow Fund shareholders.
3. Fundamental Fund will recognize no gain or loss on the receipt of the
assets of Tomorrow Fund in exchange solely for the transfer of Fundamental
Fund voting shares.
4. The basis of the assets of Tomorrow Fund in the hands of Fundamental
Fund will be the same as the basis of such assets to Tomorrow Fund immediately
before the Reorganization.
5. Fundamental Fund's holding period for the assets acquired from
Tomorrow Fund will include the period during which such assets were held by
Tomorrow Fund.
6. Tomorrow Fund shareholders will recognize no gain or loss on the
exchange of their Tomorrow Fund shares for voting shares of Fundamental Fund
(including fractional shares to which they may be entitled).
7. The basis of the Fundamental Fund shares received by Tomorrow Fund
shareholders (including fractional shares to which they may be entitled) shall
be the same, in the aggregate, as the basis of the Tomorrow Fund shares
surrendered in exchange therefor.
8. The holding period of the Fundamental Fund shares received by Tomorrow
Fund shareholders (including fractional shares to which they may be entitled)
will include the holding period of the Tomorrow Fund shares surrendered in
exchange therefor, provided that the Tomorrow Fund shares were held as a
capital asset on the date of the exchange.
9. Pursuant to section 381(a) of the Code and section 1.381(a)-l of the
Income Tax Regulations, Fundamental Fund will succeed to and take into account
the items of Tomorrow Fund described in section 381(c) of the Code, subject to
the provisions and limitations specified in sections 381, 382, 383 and 384 of
the Code and the Regulations thereunder. Under section 381(b), the tax year of
Tomorrow Fund will end on the date of the Reorganization.
Our opinion represents our best legal judgment as to the proper
Federal income tax treatment of the Reorganization, based on the facts
contained in the Plan, the Registration Statement and the Representations. Our
opinion assumes the accuracy of the facts as described in the Plan, the
Registration Statement and the Representations and could be affected if any of
the facts as described in the Plan, the Registration Statement or the
Representations are inaccurate.
<PAGE>
We are furnishing this opinion letter to the addressees hereof,
solely for the benefit of such addressees in connection with the
Reorganization. This opinion letter is not to be used, circulated, quoted or
otherwise referred to for any other purpose.
Very truly yours,
/S/ BROWN & WOOD LLP
