<PAGE>
As filed with the Securities and Exchange Commission
on April 19, 1996
1933 Act Registration Number 33-66714
--------
1940 Act Registration Number 811-7918
--------
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 3 [x]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. 4 [x]
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Weitz Partners, Inc.
(Exact Name of Registrant as Specified in Charter)
Suite 600
1125 South 103 Street
Omaha, NE 68124-6008
(Address of Principal Offices)
Registrant's Telephone Number, including Area Code:
402-391-1980
Wallace R. Weitz
Suite 600
1125 South 103 Street
Omaha, NE 68124-6008
(Name and Address of Agent for Service)
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Copies of all communications to:
JOHN C. MILES, ESQ.
Cline, Williams, Wright, Johnson & Oldfather
1900 FirsTier Bank Building
Lincoln, NE 68508
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective.
It is proposed that this filing will become effective immediately upon filing,
pursuant to paragraph (b) of Rule 485 under the Securities Act of 1933.
The Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. The Registrant last filed a Rule 24f-2 Notice on or about February 9,
1996.
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<PAGE>
WEITZ PARTNERS, INC.
Cross-Reference Sheet
Required by Rule 404(a)
PART A
N-1A Item Number Location in Prospectus
- ---------------- ----------------------
1. Cover Page . . . . . . . . . . . . . . . Cover Page
2. Synopsis . . . . . . . . . . . . . . . . Summary
3. Financial Highlights . . . . . . . . . . Financial Highlights
4. General Description of Registrant. . . . Risk Factors; Investment Objective
and Policies; Securities and Other
Investment Practices; General
Information
5. Management of the Fund . . . . . . . . . The Investment Adviser; General
Information
5A. Management's Discussion of Fund
Performance. . . . . . . . . . . . . . . Financial Highlights
6. Capital Stock and Other Securities . . . Cover Page; Redemption of Shares;
Dividends, Distributions and
Taxes; General Information
7. Purchase of Securities Being Offered . . Purchase of Shares; Determination
of Net Asset Value
8. Redemption or Repurchase . . . . . . . . Redemption of Shares;
Determination of Net Asset Value
9. Pending Legal Proceedings. . . . . . . . Not Applicable
PART B
Location in Statement of
Additional Information
------------------------
10. Cover Page . . . . . . . . . . . . . . . Cover Page
11. Table of Contents. . . . . . . . . . . . Table of Contents
12. General Information and History. . . . . General Information and History
<PAGE>
13. Investment Objective and Policies. . . . Investment Objective, Policies and
Restrictions
14. Management of the Fund . . . . . . . . . Directors and Executive Officers
15. Control Persons and Principal
Holders of Securities. . . . . . . . . . Investment Advisory and Other
Services-Control of the Adviser
and the Distributor; Capital Stock
16. Investment Advisory and Other Services . Investment Advisory and Other
Services
17. Brokerage Allocation and
Other Practices. . . . . . . . . . . . . Portfolio Transactions and
Brokerage Allocations
18. Capital Stock and Other Securities . . . Capital Stock
19. Purchase, Redemption and Pricing
of Securities Being Offered. . . . . . . Determination of Net Asset Value;
Redemption
20. Tax Status . . . . . . . . . . . . . . . Taxation
21. Underwriters . . . . . . . . . . . . . . Investment Advisory and Other
Services
22. Calculation of Performance Data. . . . . Calculation of Performance Data
23. Financial Statements . . . . . . . . . . Financial Statements
PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.
pvf/n1a496
<PAGE>
PROSPECTUS
WEITZ PARTNERS, INC.
1125 South 103 Street, Suite 600,
Omaha, Nebraska 68124-6008
402-391-1980 800-232-4161
Fax 402-391-2125
PARTNERS VALUE FUND
Weitz Partners, Inc. (the "Company"), a Nebraska corporation, is a no-load
open-end management investment company offering its shares in series, each
series representing a separate fund. At present, there is only one series
authorized by the Company designated the Partners Value Fund (the "Fund").
PARTNERS VALUE FUND is non-diversified and has as its investment objective
capital appreciation. The Fund may invest in common stocks and all types of
securities convertible into equity such as rights, warrants, convertible bonds
and preferred stock, as well as bonds and other debt obligations of both
corporate and governmental issues. The selection of securities for the Fund's
portfolio is based on the concept of "value investing." See "Investment
Objective and Policies -- Partners Value Fund" and "Investment Restrictions."
This Prospectus briefly summarizes information an investor should consider
before purchasing shares and should be retained for future reference. A
Statement of Additional Information, which provides further information about
the Company and the Fund may be obtained without charge, and shareholder
inquiries may be made, by writing or calling Weitz Securities, Inc. at the
address or telephone number set forth above. The Statement of Additional
Information, dated April 19, 1996, has been filed with the Securities and
Exchange Commission and is incorporated into this Prospectus by reference.
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.
The date of this Prospectus is April 19, 1996.
<PAGE>
SUMMARY
INVESTMENT OBJECTIVE AND POLICIES. The Fund's investment objective is capital
appreciation. The Fund intends to invest principally in common stocks, preferred
stocks and a variety of securities convertible into equity such as rights,
warrants, preferred stocks and convertible bonds. The selection of securities
for the Fund's portfolio is based on a concept of "value investing" which
focuses on companies whose stocks are selling at (i) low price to earnings
ratios, (ii) low price to cash-flow ratios, (iii) low price to book ratios, (iv)
discounts to the value of the company's cash, natural resource and other asset
value (even though current earnings may be depressed), or (v) prices below the
price the Investment Adviser believes to be reasonable for the company.
PURCHASES. Shares of the Fund may be purchased at the next determined net
asset value per share. Shares are sold without a sales load, with an initial
investment of at least $100,000. Purchases may be made by check or by bank wire.
See "Purchase of Shares" and "Determination of Net Asset Value."
REDEMPTIONS. Investors may redeem shares at their next determined net asset
value per share by so instructing Wallace R. Weitz & Company (the
"Administrator") at its office in Omaha, Nebraska. Redemption proceeds normally
will be paid within seven days. See "Redemption of Shares."
INVESTMENT ADVISER. The Fund is managed by Wallace R. Weitz & Company (the
"Investment Adviser"). Wallace R. Weitz has been designated the portfolio
manager of the Fund by the Investment Adviser. The Investment Adviser is paid a
monthly fee at the annual rate of 1% of the Fund's average daily net asset
value. The fee paid to the Investment Adviser is higher than that paid by most
mutual funds. From time to time, the Investment Adviser may waive all or some of
its fees and/or voluntarily assume certain expenses of the Fund which has the
effect of lowering the Fund's overall expense ratio and increasing yield to
shareholders during the period such amount is waived or assumed. See "The
Investment Adviser."
ADMINISTRATOR. Wallace R. Weitz & Co. also acts as the Fund's Administrator
and as such acts as the transfer agent and dividend disbursing agent for the
Fund and provides virtually all customary services required for fund operations.
See "The Investment Adviser" herein and "Investment Advisory and Other Services"
in the Statement of Additional Information.
DISTRIBUTOR. Weitz Securities, Inc. (the "Distributor"), an affiliate of the
Investment Adviser, acts as principal underwriter for the Fund and does so
without compensation. See the "Distributor."
DIVIDENDS. The Fund will declare and distribute income dividends and capital
gains distributions as may be required to qualify as a regulated investment
company under the Internal Revenue Code. All dividends and distributions will be
reinvested automatically unless the shareholder elects otherwise. See
"Dividends, Distributions and Taxes."
STRUCTURE. Weitz Partners, Inc., is a Nebraska corporation organized in July,
1993, and is registered under the Investment Company Act of 1940 ("1940 Act"),
as an open-end management investment company which will issue its shares in
series, each series representing a distinct fund with its own investment
objectives and policies. At present, the Fund is the only series authorized, but
the Board of Directors may authorize additional series without shareholder
approval. See "General Information."
2
<PAGE>
RISK FACTORS
RISK FACTORS. Investment in the Fund may be subject to certain risks. Such
risks include, among others, (i) the risk that the Fund will not achieve its
investment objective; (ii) the risk that the Fund's net asset value will
fluctuate; (iii) the risk that the investment upon redemption may be worth less
than originally invested; (iv) the risk of investing in covered call options and
foreign securities; and (v) the risk that, because the Fund is non-diversified
the net asset value of shares of the Fund may be more volatile. There can be no
assurance the Fund will attain its objectives. See "Investment Objective and
Policies -- Partners Value Fund" and "Securities and Other Investment
Practices."
3
<PAGE>
FEES, CHARGES AND FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fees None
</TABLE>
The table below shows expenses incurred as a percentage of average net assets
in the fiscal year ended December 31, 1995 (after fee waiver).
ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
PARTNERS
VALUE FUND
----------
<S> <C>
Management Fees
Investment Advisory Fee(1) 1.00%
Administrative Fee (after fee waiver)(2) .12%
12b-1 Fees 0.00%
Other Expenses .15%
-----
Total Expenses 1.27%
</TABLE>
- ------------------------
(1)The Adviser has agreed to reimburse the Fund up to the amount of advisory
fees paid to the extent that total expenses exceed 1.50% of average annual daily
net assets. The investment advisory fee payable to the Adviser is higher than
that paid by most other mutual funds. See "The Investment Adviser."
(2)Under the Administration Agreement, the administrative fee is a monthly fee
calculated at a maximum annual rate of .25% of average daily net assets. The
maximum fee can, however, be decreased from time to time by the Administrator.
See "Investment Advisory and Other Services" in the Statement of Additional
Information.
EXAMPLE:
You would pay the following expenses on a $1,000 investment, assuming: (1) 5%
annual return; and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Partners Value Fund $ 13 $ 40 $ 70 $ 153
</TABLE>
THE PURPOSE OF THE TABLES IS TO ASSIST AN INVESTOR IN UNDERSTANDING THE
VARIOUS COSTS AND EXPENSES THAT AN INVESTOR IN THE FUND WILL BEAR DIRECTLY OR
INDIRECTLY. THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following information provides selected data for a share of the Fund
outstanding throughout the period indicated. Information was audited by KPMG
Peat Marwick LLP, independent certified public accountants, to the extent of
their reports appearing in the Annual Reports for those periods and included in
the Statement of Additional Information. All reports are available upon request.
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------ ------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.275 $ 10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.084 0.057
Net gains or losses on securities (realized and unrealized) 3.108 (0.964)
------------------ ------------------
Total from investment operations 3.192 (0.907)
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.137) --
Distributions (from excess realized gains) (0.100) --
Distributions (from capital gains) (0.846) (0.818)
------------------ ------------------
Total Distributions (1.083) (0.818)
------------------ ------------------
NET ASSET VALUE, END OF PERIOD $ 10.384 $ 8.275
------------------ ------------------
------------------ ------------------
TOTAL RETURN 38.7% -9.0%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period 73,780,888 51,287,492
Ratio of Expenses to Average Net Assets 1.27% 1.29%
Ratio of Net Investment Income to Average Net Assets 0.82% 0.67%
Portfolio Turnover Rate 51% 33%
</TABLE>
Total returns are based upon past results and are not a prediction of future
performance.
5
<PAGE>
The chart below depicts the change in the value of a $100,000 investment for
the period December 31, 1985 through December 31, 1995 for Weitz Partners II --
Limited Partnership, the predecessor to the Fund, (the "Predecessor
Partnership") and the Fund as compared with the growth of the S&P 500 index
during the same period. The S&P 500 is an unmanaged index consisting of 500
companies. The information assumes reinvestment of dividends and capital gains
distributions. The Fund succeeded to substantially all of the assets of the
Predecessor Partnership, a Nebraska investment limited partnership as of
December 31, 1993. The Fund's investment objectives and policies are
substantially identical to those of the Predecessor Partnership and Wallace R.
Weitz was the General Partner and portfolio manager for the Predecessor
Partnership and is the portfolio manager for the Fund. The Predecessor
Partnership was not registered under the Investment Company Act of 1940 (the
"1940 Act") and therefore was not subject to certain investment restrictions
imposed by the 1940 Act. If the Predecessor Partnership had been registered
under the 1940 Act, the performance of the Predecessor Partnership may have been
adversely affected. As indicated, $100,000 originally invested in the
Predecessor Partnership on Decemberx5 31, 1985 would have been valued at
$607,856 on December 31, 1995.
VALUE OF $100,000 INVESTMENT
<TABLE>
<CAPTION>
PARTNERS VALUE FUND/
MONTH ENDING PREDECESSOR PARTNERSHIP S&P 500
------------ ----------------------- --------
<S> <C> <C>
12/31/85 $177,051 $145,771
01/31/86 $177,582 $146,584
02/28/86 $189,053 $157,532
03/31/86 $197,788 $166,327
04/30/86 $195,573 $164,452
05/31/86 $199,464 $173,193
06/30/86 $199,804 $176,126
07/31/86 $194,768 $166,280
08/31/86 $198,527 $178,610
09/30/86 $195,728 $163,835
10/31/86 $199,173 $173,289
11/30/86 $199,312 $177,500
12/31/86 $196,703 $172,961
01/31/87 $206,597 $196,251
02/28/87 $210,812 $203,997
03/31/87 $216,040 $209,882
04/30/87 $212,389 $208,017
05/31/87 $212,856 $209,812
06/30/87 $215,113 $220,406
07/31/87 $220,232 $231,570
08/31/87 $223,734 $240,202
09/30/87 $224,204 $234,935
10/31/87 $205,371 $184,373
11/30/87 $202,023 $169,207
12/31/87 $205,161 $182,106
01/31/88 $211,768 $189,760
02/29/88 $216,638 $198,562
03/31/88 $217,223 $192,436
04/30/88 $220,243 $194,563
05/31/88 $221,498 $196,217
06/30/88 $226,482 $205,214
07/31/88 $228,339 $204,432
08/31/88 $228,247 $197,497
09/30/88 $232,653 $205,900
10/31/88 $234,165 $211,629
11/30/88 $232,315 $208,601
12/31/88 $235,730 $212,236
01/31/89 $244,971 $227,733
02/28/89 $245,951 $222,069
03/31/89 $251,239 $227,242
04/30/89 $262,796 $239,028
05/31/89 $264,819 $248,656
06/30/89 $269,083 $247,256
07/31/89 $278,232 $269,560
08/31/89 $281,710 $274,808
09/30/89 $284,949 $273,687
10/31/89 $280,618 $267,339
11/30/89 $281,236 $272,765
12/31/89 $283,584 $279,304
01/31/90 $268,015 $260,563
02/28/90 $270,400 $263,939
03/31/90 $270,157 $270,926
04/30/90 $269,238 $264,177
05/31/90 $282,081 $289,872
06/30/90 $283,266 $287,917
07/31/90 $278,252 $286,995
08/31/90 $263,032 $261,080
09/30/90 $254,878 $248,391
10/31/90 $244,173 $247,340
11/30/90 $257,480 $263,291
12/31/90 $265,718 $270,619
01/31/91 $282,697 $282,374
02/28/91 $297,906 $302,539
03/31/91 $304,580 $309,857
04/30/91 $308,204 $310,592
05/31/91 $317,049 $323,939
06/30/91 $306,492 $309,108
07/31/91 $314,338 $323,502
08/31/91 $320,185 $330,708
09/30/91 $325,372 $325,169
10/31/91 $326,836 $329,530
11/30/91 $317,063 $316,284
12/31/91 $340,385 $352,393
01/31/92 $344,367 $345,834
02/29/92 $349,533 $350,307
03/31/92 $349,882 $343,500
04/30/92 $351,142 $353,571
05/31/92 $355,075 $355,295
06/30/92 $356,104 $350,009
07/31/92 $359,879 $364,295
08/31/92 $352,969 $356,848
09/30/92 $357,911 $361,041
10/31/92 $354,547 $362,279
11/30/92 $378,727 $374,576
12/31/92 $391,783 $379,170
01/31/93 $403,380 $382,337
02/28/93 $411,084 $387,542
03/31/93 $418,648 $395,712
04/30/93 $407,177 $386,147
05/31/93 $420,085 $396,440
06/30/93 $430,083 $397,597
07/31/93 $437,050 $395,995
08/31/93 $465,196 $410,983
09/30/93 $461,521 $407,829
10/31/93 $477,536 $416,259
11/30/93 $470,850 $412,304
12/31/93 $481,893 $417,287
01/31/94 $487,772 $431,460
02/28/94 $468,689 $419,756
03/31/94 $445,895 $401,479
04/30/94 $447,775 $406,631
05/31/94 $461,027 $413,281
06/30/94 $450,570 $403,157
07/31/94 $460,015 $416,385
08/31/94 $471,436 $433,422
09/30/94 $458,039 $422,838
10/31/94 $462,713 $432,305
11/30/94 $444,209 $416,576
12/31/94 $438,385 $422,741
01/31/95 $453,908 $433,695
02/28/95 $473,032 $450,577
03/31/95 $477,271 $463,849
04/30/95 $487,071 $477,499
05/31/95 $509,269 $496,539
06/30/95 $530,724 $508,062
07/31/95 $550,803 $524,900
08/31/95 $574,484 $526,210
09/30/95 $585,715 $548,403
10/31/95 $575,967 $546,444
11/30/95 $601,661 $570,404
12/31/95 $607,856 $581,390
</TABLE>
<TABLE>
<CAPTION>
1-YEAR 5-YEARS 10-YEARS
----------- ----------- ------------
<S> <C> <C> <C>
Partners Value Fund (and Predecessor Partnership) 38.7% 18.0% 13.1%
S&P 500 37.5% 16.5% 14.8%
</TABLE>
Total return for the Fund in 1995 was +38.7% vs. +37.5% for the S&P 500. The
Investment Adviser's investment strategy is to buy stocks of well-managed,
understandable, good businesses that are selling at
6
<PAGE>
significant discounts to the Investment Adviser's appraisal of their enterprise
values. This conservative, value-oriented approach often leads to
under-performance (relative to the S&P 500) in very strong markets, as the
Fund's price-sensitivity leads the Fund to sell early and to hold cash reserves
rather than pay inflated prices for stocks.
The Fund did hold significant cash reserves (averaging 10-15%) during 1995,
but several of the stocks in the Fund's portfolio rose significantly more than
the S&P 500, allowing the Fund's overall return to exceed the return of the S&P
500. The stocks which contributed the most to the Fund's returns in 1995 were
banks and other financial service companies. These companies generally enjoyed
good operating conditions in 1995, and their stock prices also benefited from
merger activity among financial institutions and the fact that most financial
stocks entered 1995 at depressed levels because of 1994's less favorable
conditions.
TOTAL RETURNS ARE BASED UPON PAST RESULTS AND ARE NOT A PREDICTION OF FUTURE
PERFORMANCE.
7
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
PARTNERS VALUE FUND
INVESTMENT OBJECTIVE
The investment objective of the Fund is capital appreciation. The selection of
securities for the Fund's portfolio is based on a concept of "value investing"
which focuses on companies whose stocks are selling at (i) low price to earnings
ratios, (ii) low price to cash-flow ratios, (iii) low price to book ratios, (iv)
discounts to the value of the company's cash, natural resource and other asset
value (even though current earnings may be depressed), or (v) prices below the
price the Investment Adviser believes to be reasonable for the company. Little
weight is given to technical stock market analysis. Federal income tax
consequences to shareholders may be a factor in the investment decisions. There
can, of course, be no assurance that the foregoing investment objective will be
met. The investment objective is considered a fundamental policy and cannot be
changed without shareholder approval.
INVESTMENT POLICIES
The Investment Adviser seeks to identify and purchase securities trading at
prices significantly below their estimated intrinsic, or "going concern," value,
that is, the price per share which the Investment Adviser estimates an informed
buyer would pay if buying the entire company. Ordinarily the Fund will be
principally invested in common stocks and other securities convertible into
equity, such as rights, warrants, convertible bonds and preferred stock;
however, the Fund has adopted a policy which permits the Investment Adviser to
invest a portion or all of its assets in high quality nonconvertible preferred
stock, high quality nonconvertible debt securities and high quality United
States Government and governmental agency and instrumentality obligations, or
retain funds in cash or cash equivalents when the Investment Adviser believes
that prevailing market or economic conditions warrant a temporary defensive
investment position. The Fund is subject to certain investment restrictions
which are considered fundamental and which cannot be changed without shareholder
approval. Additionally, the Fund is subject to other investment policies and
restrictions imposed by the Investment Adviser which are not considered
fundamental and which may be changed without shareholder approval. See
"Investment Restrictions" herein and the Statement of Additional Information for
a description of such investment policies and restrictions. See "Securities and
Other Investment Practices" herein and the Statement of Additional Information
for descriptions of the types of securities in which the Fund will invest and a
description of certain investment practices utilized by the Investment Adviser
for the Fund including investing in covered call options, warrants, convertible
securities and other investment companies.
INVESTMENT RESTRICTIONS
The Investment Adviser has adopted certain investment restrictions for the
Fund.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund has adopted a fundamental investment restriction which prohibits the
Fund from purchasing the securities of any other investment company except as
provided by section 12(d)(1)(F) of the Investment Company Act of 1940, and in
the open market where, to the best information of the Investment Adviser, no
commission, profit or sales load to a sponsor or
8
<PAGE>
dealer (other than the customary broker's commission) results from such
purchase, and to the extent that such securities normally do not exceed ten
percent (10%) of the total assets of the Fund.
The Fund has adopted a number of restrictions relating to investment
activities which are set forth in detail in the Statement of Additional
Information. These restrictions, in part, prohibit the Fund from:
1. Underwriting the securities of other issuers, except the Fund may
acquire restricted securities under circumstances such that, if the securities
are sold, the Fund might be deemed an underwriter for purposes of the Securities
Act of 1933;
2. Issuing any senior securities (as defined in the Investment Company Act
of 1940, as amended);
3. Borrowing money except for temporary purposes and then only from banks
and in an aggregate amount not exceeding 5% of total net assets of the Fund at
the time of such borrowing;
4. Investing for the purpose of exercising control or management;
5. Investing more than 25% of the value of its total assets (at the time of
purchase, and after giving effect thereto) in the securities of any one
industry;
6. As to 50% of its total assets, investing more than 5% of its total
assets, taken at market value at the time of a particular purchase, in
securities of any one issuer (other than in government securities).
The investment restrictions and policies are considered at the time of
purchase. The immediate sale of securities is not required unless the percentage
limitation is exceeded as a direct result of the purchase. The Fundamental
Investment Restrictions of the Fund identified above and set forth in detail in
the Statement of Additional Information are considered fundamental policies
which cannot be changed without the approval of a "majority" of the Fund's
outstanding voting securities. "Majority" means the lesser of (a) 67% or more of
the outstanding shares of the Fund voting at a special or annual meeting at
which more than 50% of the outstanding shares of the Fund are represented in
person or by proxy; or (b) more than 50% of the outstanding shares of the Fund.
The Statement of Additional Information includes discussion of certain other
investment policies and restrictions, some of which are also considered
fundamental and may not be changed without shareholder approval.
NONFUNDAMENTAL POLICIES AND RESTRICTIONS
The nonfundamental policies and restrictions may be changed without
shareholder approval. However, the Investment Adviser will notify shareholders
in writing of the intention to materially modify the policies or restrictions at
least 30 days prior to making the change.
FUND TURNOVER AND OTHER INVESTMENT POLICIES
In seeking to attain its investment objectives, the Fund normally will
purchase securities with a view to holding them rather than selling them to
achieve short-term trading profits. However, the Fund reserves the right to sell
any security without regard to the length of time it has been held if economic,
industry, or securities market conditions warrant such action. Normally the
annual maximum portfolio turnover rate for the Fund will be less than 100%. For
the periods ended December 31, 1994 and December 31, 1995, the portfolio
turnover rates were 33% and 51%, respectively. The portfolio turnover rate will
not be a limiting factor when the Investment Adviser deems portfolio changes
appropriate. The higher a Fund's turnover rate, the higher will be its
expenditures for brokerage commissions and related transaction costs.
9
<PAGE>
The Fund intends to comply with the requirements of Subchapter M of the
Internal Revenue Code (see "Dividends, Distributions and Taxes"). Shareholder
tax considerations may also be a factor in investment decisions.
In connection with the qualification or registration of its shares for sale
under the state securities laws of certain states, the Fund may from time to
time agree to additional investment restrictions for purposes of compliance with
the securities laws of those states where the Fund intends to sell or offer for
sale its shares. To the extent that such additional investment restrictions
would materially alter the Fund's investment objective, such additional
restrictions may require shareholder approval prior to implementation. Any
additional restrictions that would have a bearing on the Fund's operations will
be reflected in supplements to this Prospectus.
The value of the shares of the Fund will fluctuate daily as the net asset
value of its investments change. The Fund cannot assure the elimination of
investment and market risks or the attainment of its objectives.
SECURITIES AND OTHER INVESTMENT PRACTICES
The Fund invests in a variety of securities which have special features and
engages in certain investment practices in seeking to achieve its investment
objectives. Provided below is a brief description of such securities and
investment practices. See the Statement of Additional Information for a more
detailed discussion.
CONVERTIBLE BONDS AND DEBENTURES are corporate debt instruments, frequently
unsecured and subordinated to senior corporate debt, which may be converted into
common stock at a specified price. Such securities may trade at a premium over
their face amount when the price of the underlying common stock exceeds the
conversion price, but otherwise will normally trade at prices reflecting current
interest rate trends.
COVERED CALL OPTIONS are contracts sold on a national exchange or in the
over-the-counter options market which allow the purchaser to buy the underlying
security at a specified price (the "strike price") prior to a certain date.
"Covered" options are those in which the option seller (the "writer") owns the
underlying securities. The Fund may write covered call options to generate
premium income which is considered by the Investment Adviser to be an acceptable
investment result. Writing covered call options may increase the Fund's income
since it receives a payment (the "premium") for writing the option. To the
extent that it writes covered call options, the Fund will forego any opportunity
for appreciation in the underlying securities above the strike price during the
term of the option. The underlying securities will be subject to certain deposit
procedures and therefore unavailable for sale during the term of the option or
until the Fund buys back the option to close out the transaction. As a
non-fundamental policy, no more than 5% of the Fund's total assets will be
subject to covered call options at any one time.
U.S. GOVERNMENT SECURITIES are securities issued or guaranteed by the U.S.
Government and may include Treasury Bills, Notes, and Bonds which are direct
obligations of the U.S. Government and its agencies and instrumentalities.
Obligations issued or guaranteed by U.S. Government agencies or
instrumentalities include, for example, those obligatory of Federal Intermediate
Credit Banks, Federal Home Loan Banks, the Federal National Mortgage Association
and the Farmers Home Administration. Such securities will include those
supported by the full faith and credit of the U.S. Treasury or the right of the
agency or
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instrumentality to borrow from the Treasury, as well as those supported only by
the credit of the issuing agency or instrumentality.
Some U.S. Government agency securities, such as those issued by the Government
National Mortgage Association ("GNMA"), are mortgage-related securities which
represent an undivided ownership interest in a pool of mortgage loans. The
actual yield of such securities is influenced by the prepayment experience of
the mortgage pool underlying them. In periods of declining interest rates, the
rate of prepayment of mortgages underlying the securities tends to increase and
in periods of rising interest rates the rate of prepayment tends to decrease. If
the higher-yielding mortgages from the pool are prepaid, the yield on the
remaining pool will be reduced and it will be necessary for the Fund to reinvest
such prepayment, presumably at a lower interest rate. As with any
mortgage-backed securities, if such mortgage-related securities are purchased at
a premium, in the event of prepayment such premium would be lost.
Most mortgage-related securities are pass-through securities, which means that
they provide investors with payments consisting of both interest and principal
as the mortgages in the underlying mortgage pool are paid off. The following
types of mortgage-related securities, which represent the majority of the
mortgage-related securities currently available, are issued by
government-sponsored organizations formed to increase the availability of
mortgage credit.
Ginnie Maes, securities issued by GNMA, are interests in pools of mortgage
loans insured by the Federal Housing Administration. GNMA is a U.S. Government
corporation with the Department of Housing and Urban Development. Ginnie Maes
are backed by the full faith and credit of the United States Government, which
means that the U.S. Government guarantees that interest and principal will be
paid when due.
Fannie Maes and Freddie Macs are pass-through securities issued by the Federal
National Mortgage Association (FNMA) and the Federal Home Loan Mortgage
Corporation (FHLMC), respectively. FNMA and FHLMC, which guarantee payment of
interest and principal on Fannie Maes and Freddie Macs, are federally chartered
corporations supervised by the U.S. Government and act as governmental
instrumentalities under authority granted by Congress. Fannie Maes and Freddie
Macs are not backed by the full faith and credit of the United States
Government; however, their close relationship with the U.S. Government makes
them high-quality securities with minimal credit risk.
Mortgage-related securities, when they are issued, have stated maturities of
up to forty years, depending on the length of the mortgages underlying the
securities. In practice, unscheduled or early payments of principal and interest
on the underlying mortgages will make the effective maturity of the securities
shorter than this. A security based on a pool of forty-year mortgages may have
an average life as short as two years. The maturity of such mortgage-related
securities will be deemed to be the expected effective maturity of the
securities. The relationship between mortgage prepayments and interest rates
will give some high-yielding mortgage-related securities less potential for
growth in value than conventional bonds with comparable maturities.
CORPORATE DEBT SECURITIES acquired by the Fund, including convertible bonds
and debentures, will normally be of investment grade or better (rated BBB or
better by Standard & Poors and Baa or better by Moody's); however, the Fund may
from time to time invest up to 5% of its net assets in lower rated corporate
debt securities (i.e. "junk bonds") available in the secondary market. Such an
investment will be made only if it appears likely to the Investment Adviser that
the investment will generate capital gains as a result
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of the issuer's merger, reorganization or anticipated favorable change of
financial condition. Securities rated BBB/Baa are considered "investment grade"
by the financial community, but are described by Standard & Poors and Moody's as
"medium grade obligations" which have "speculative characteristics." Changes in
economic conditions or other circumstances are more likely to lead to a weakened
capacity to make principal and interest payments than is the case with higher
grade debt securities. To the extent that such securities are downgraded after
acquisition, the Investment Adviser will evaluate the risk of continuing to hold
the securities or will prudently dispose of them. See Appendix A to the
Statement of Additional Information for a description of ratings.
BANK OBLIGATIONS include negotiable certificates of deposit and bankers'
acceptances which evidence the obligation of the banking institution to repay
funds deposited with it for a specified period of time at a stated interest
rate. Such obligations will be purchased from banks which have capital, surplus
and undivided profits, as of the date of their most recently published financial
statements, in excess of $100,000,000 and obligations of other banks and savings
and loan associations if such obligations are insured by the Federal Deposit
Insurance Corporation ("FDIC"). Certificates of deposit generally have penalties
for early withdrawal, but can be sold to third parties subject to the same risks
as other fixed income securities.
COMMERCIAL PAPER consists of short-term unsecured promissory notes. The Fund
will purchase only commercial paper rated Prime 1 by Moody's or A-1 by Standard
& Poors, or if not rated, issued or guaranteed as to payment of principal and
interest by companies which at the date of investment have an outstanding debt
issue rated AA or better by Standard & Poors or Aa or better by Moody's. See
Appendix A to the Statement of Additional Information for a description of
ratings.
FOREIGN SECURITIES purchased by the Fund must be listed on a principal foreign
securities exchange or over-the-counter market, or be represented by American
Depository Receipts which are listed on a domestic securities exchange or traded
in the United States over-the-counter market. The Fund may occasionally convert
U.S. dollars into foreign currency, but only to effect securities transactions
on a foreign securities exchange and not to hold such currency as an investment.
The Fund will not invest in forward foreign currency contracts. While the Fund
has no present intention to invest any significant portion of its assets in
foreign securities, it reserves the right to invest not more than 25% of the
value of its total assets (at time of purchase, giving effect thereto) in the
securities of foreign issuers and obligors.
Investors should recognize that investments in foreign companies involve
certain risks that are not typically associated with investing in domestic
companies. An investment may be affected by changes in currency rates and in
exchange control regulations. Foreign companies are not generally subject to
uniform accounting, auditing and financial reporting standards comparable to
those applicable to domestic companies, and there may be less publicly available
information about a foreign company than about a domestic company. Some foreign
stock markets may have substantially less trading activity than the American
securities markets, and securities of some foreign companies may be less liquid
than securities of comparable domestic companies. Also, commissions on
transactions in foreign securities may be higher than similar transactions on
domestic stock markets and foreign governments may impose taxes on securities
transactions or ownership. There is generally less governmental regulation of
stock exchanges, brokers, and listed and unlisted companies in foreign countries
than in the
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United States. In addition, individual foreign economies may differ favorably or
unfavorably from the United States' economy in such respects as growth of gross
national product, rate of inflation, capital reinvestment, resource self-
sufficiency and balance of payments position.
INVESTMENT COMPANY SECURITIES consist of the shares of other open or closed
end investment companies registered under the 1940 Act. Investing in the shares
of other registered investment companies involves the risk that such other
registered investment companies will not achieve their objectives or will
achieve a yield or return that is lower than that of the Fund. Investing in the
shares of other registered investment companies indirectly results in the
investor paying not only the advisory fee and related fees charged by the Fund,
but also the advisory and related fees charged to the other investment
companies. The Fund will only invest in investment company securities described
as money market funds and then, only to the extent allowed by the fundamental
investment restrictions for the Fund.
PURCHASE OF SHARES
GENERAL
Shares of the Fund are offered by the Distributor on a continuous basis at net
asset value without any sales load or other charge. Fund shares may be purchased
at net asset value next computed (see "Determination of Net Asset Value") after
receipt of an order subject to a minimum initial investment requirement of
$100,000. Subsequent minimum investments in the Fund of $5,000 may be required,
subject to certain exceptions. The Fund reserves the right, in its sole
discretion, to reject any order, to waive initial and subsequent investment
minimums for new accounts, including such accounts opened by or for family
members of existing shareholders, and to modify investment minimums generally
from time to time. All purchase orders are subject to acceptance by authorized
officers of the Fund in Omaha, Nebraska and are not binding until so accepted.
Shares may be purchased only in those states in which the Fund is qualified
for sale.
To obtain a Purchase Application, for assistance in completing the
application, or for additional information, call or write Weitz Securities, Inc.
at the Fund's telephone number or address shown on the cover page of this
Prospectus.
PAYMENT BY CHECK Investors may purchase shares by completing the Purchase
Application included with this Prospectus and submitting it with a check payable
to:
WEITZ PARTNERS, INC.
1125 South 103 Street, Suite 600
Omaha, Nebraska 68124-6008
For subsequent purchases, the account name and account number should be
included with any purchase order to properly identify the investor's account.
PAYMENT BY BANK WIRE Payment for shares may also be made by bank wire. For
initial purchases, a purchase application must be completed and mailed to the
Fund. To pay by bank wire, the investor must:
1. Telephone the Fund 402-391-1980 or 800-232-4161 and furnish the name,
the account number and the telephone number of the investor as well as the
amount being wired and the name of the wiring bank.
2. Instruct the bank to wire the specific amount of immediately available
funds to the Custodian. The Fund will not be responsible for the consequences of
delays in the bank or Federal Reserve wire system. The investor's bank must
furnish the full name of the investor's account
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and the account number. The wire should be addressed as follows:
Norwest Bank Nebraska, N.A.
1919 Douglas Street
Omaha, Nebraska 68102
ABA #104000058
Capital Management & Trust Department
#1150-001-521
For credit to: Weitz Partners, Inc. 25308000 Partners Value Fund
For the Account of: Account Registration Name
BANKS MAY IMPOSE A CHARGE FOR THE WIRE TRANSFER OF FUNDS.
AUTOMATIC INVESTMENT SERVICE Shareholders may choose to participate in the
automatic investment service provided through the automated clearing system. By
selecting this option on the Purchase Application, providing the bank name,
address, and appropriate account numbers (a voided check is required), a draft
will be drawn on the investor's bank account at regular intervals (on the 1st or
the 15th day of the month or if such day is not a business day, the next
following business day) to purchase shares of the Fund at net asset value on the
date of the draft. The Fund will send a confirmation for each transaction. A
debit will also appear on the investor's bank statement. To add, change, or
cancel this service, please send a request in writing to the Fund.
RETIREMENT ACCOUNTS
INDIVIDUAL RETIREMENT ACCOUNTS ("IRAS") Certain individuals may be eligible to
establish IRAs if they meet requirements of the Internal Revenue Code. A form of
individual retirement account is available from the Fund for investment in
shares by qualified investors. This form may be used for annual contributions as
well as for qualified rollover contributions of distributions received from
certain employer-sponsored pension and profit-sharing plans and from other IRAs.
A required disclosure statement describing relevant tax and other information
will be provided with the appropriate forms and instructions.
DEFINED CONTRIBUTION PLANS A self-employed individual may purchase shares
through a properly drafted self-employment retirement plan (customarily referred
to as a Keogh or HR-10 plan) covering the self-employed individual and eligible
employees. The Fund may also be used as an investment vehicle for tax-deferred
retirement plans such as Money Purchase Pension Plans, Profit Sharing Plans and
401(K) Plans. The Fund does not have forms of such plans available for adoption.
Tax treatment of contributions and withdrawals from retirement plans and
IRA's, may be substantially affected by changes in federal tax legislation.
Premature withdrawals from a retirement plan may result in adverse tax
consequences. Consultation with a tax adviser regarding the tax consequences of
retirement plans is recommended.
Because retirement programs involve commitments covering future years, it is
important that the investment objective of the Fund be consistent with the
participant's retirement objectives. The minimum investment requirements for the
purchase of shares may be waived for purchases by retirement plans. An investor
should contact the Fund for further information concerning retirement plan
investments.
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<PAGE>
REDEMPTION OF SHARES/EXCHANGE PRIVILEGES
EXCHANGE PRIVILEGES
It is possible to exchange shares of the Fund for shares of a portfolio of
Weitz Series Fund, Inc. (a "Series Fund Portfolio") at the current net asset
value. No sales commission or other charges are paid for the exchange. However,
an exchange involves the redemption of shares from the Fund and the purchase of
shares of a Series Fund Portfolio. As a result, any gain or loss on the
redemption is reportable on the shareholder's federal tax return. The investor
must also comply with the established redemption procedures. Current account
restrictions or limitations may also affect the exchange transaction. See the
information below under "Redemption of Shares" relating to redemption
procedures.
The exchange privilege is offered as a convenience to shareholders and is not
intended to be a means of speculating on short-term movements in securities
prices by frequent transactions in shares. Thus, the Fund reserves the right at
any time and with sixty days' prior notice to suspend, limit, modify, or
terminate exchange privileges in order to prevent transactions considered to be
disadvantageous to existing shareholders.
The ability to initiate exchanges by telephone is automatically established on
your account unless you request in writing that exchanges by telephone on your
account not be permitted. Before you make an exchange you should read the
Prospectus for the respective Series Fund Portfolio and complete an application.
Both the Prospectus and application can be obtained by contacting the Fund at
the address and phone number listed on the cover page. When exchanging shares by
telephone, please have ready the name of the Series Fund Portfolio, your account
number, the account registration and the dollar amount of shares to be
exchanged. Exchanges will only be made between accounts with identical
registrations. Additional information may be requested by the Fund in order to
verify the identity of the requesting shareholder. The exchange privilege is
available only in states where shares of the respective Series Fund Portfolio
are registered for sale.
The Fund will employ reasonable procedures to confirm that exchange
instructions communicated by telephone are genuine. THE FUND WILL NOT BE
RESPONSIBLE FOR THE AUTHENTICITY OF TRANSACTION INSTRUCTIONS RECEIVED BY
TELEPHONE, PROVIDED THAT REASONABLE SECURITY PROCEDURES HAVE BEEN FOLLOWED.
REDEMPTION OF SHARES
The Company will redeem all or any portion of a stockholder's shares of the
Fund when requested in accordance with the procedures set forth below. There is
no charge for the redemption of shares.
All redemption requests should be made in writing to the Company at its office
in Omaha, Nebraska. A completed Purchase Application must have been received by
the Fund before subsequent instructions to redeem shares will be accepted. The
Company's address and fax number are shown on the cover page of this Prospectus.
Shareholders may sell all or any portion of their shares on any business day
that a net asset value for the Fund is calculated. Such shares will be redeemed
by the Fund at the next such calculation after such redemption request is
received and accepted by the Fund. See "Determination of Net Asset Value."
A shareholder may request redemption of shares at any time by delivering
written instructions to the Company at the address set forth on the front cover
of this Prospectus. The redemption request should:
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<PAGE>
(1) identify the Fund, the account number and the account registration, specify
the number or dollar amount of shares to be redeemed and be signed by all
registered owners exactly as the account is registered. If the shareholder
is a corporate shareholder, the request must be signed by an authorized
corporate officer, indicating the capacity in which such officer is signing;
and
(2) include any other supporting documents requested by the Fund and as may be
required by applicable law, in the case of estates, trusts, guardianships,
custodianships, and corporations (any questions concerning documents needed
may be directed to the Company's telephone number shown on the cover page of
this Prospectus).
The Fund reserves the right to require signature guarantees on all
redemptions. Signature guarantees will be required in the following
circumstances:
(1) redemption request payable to anyone other than the shareholder(s) of
record;
(2) redemption request to be mailed to an address other than the address of
record;
(3) redemption request payable to a bank account other than the bank account of
record; and
(4) instructions to establish or change wire instructions.
A signature guarantee must be obtained from an institution participating in the
Securities Transfer Agent Medallion Program. Such institutions typically include
commercial banks that are FDIC members, trust companies, firms that are members
of a domestic stock exchange, and foreign branches of the above. A notary public
is not an acceptable guarantor.
REDEMPTION PAYMENTS
Payment of requested redemptions may be made in the following manner:
(1) by check;
(2) by wire transfer in accordance with wire transfer instructions provided in
writing to the Fund and accompanied by a signature guarantee. The Fund
reserves the right to charge the shareholder for the cost of the wire
transfer and the shareholder's bank may in addition impose an incoming wire
charge.
ACCOUNT ADDRESS CHANGES
A shareholder may change the address on an account by sending a written
request signed by all registered owners of the account. The written request
should include the account number(s), the name(s) on the account and both the
old and new addresses. When the Company receives notification of a change of
address, a confirmation will be mailed to the former address and the new address
as a security precaution. Redemptions are not allowed if a written request to
change the address has been received within 24 hours of the redemption request.
OTHER REDEMPTION INFORMATION
Payment for shares redeemed will be made as soon as possible after the date of
receipt of the request for redemption, but in no case later than seven days
thereafter, provided the shareholder has complied with all the requirements
described above.
The Fund reserves the right to automatically redeem any account balance in
cases where:
(1) the account balance falls below $500; or
(2) the shareholder has failed to provide the Fund a tax identification
number.
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<PAGE>
Shareholders will be notified in writing 60 days prior to the automatic
redemption of their account. Such automatic redemptions will reduce unnecessary
administrative expenses and, therefore, should benefit the majority of
shareholders.
Redemption payments normally will be made wholly in cash. However, if the
Board of Directors believes that economic conditions exist which would make such
a practice detrimental to the best interests of the Fund, redemption may be
accomplished through distribution of portfolio securities of the Fund valued at
the same price employed in calculating its net asset value.
However, the Fund may only redeem its shares through distribution of portfolio
securities if and to the extent that redemptions by the same shareholder during
any 90-day period exceed the lesser of (i) $250,000, or (ii) 1 percent of the
net assets of the Fund at the beginning of the period. Shareholders whose shares
are redeemed in kind may be subject to brokerage commissions or other
transaction charges upon the resale of the distributed securities.
Although payment of the redemption proceeds ordinarily will be made within
seven days after a redemption request in good order is received, payment to
investors redeeming shares which were recently purchased by check will not be
made until the Fund can verify that the payment of the purchase has been
collected, which may take up to 15 days. Such redemption delays may be avoided
by submitting a certified or cashier's check or by using the bank wire system.
The Fund may suspend redemption privileges or postpone the date of payment:
(1) During any period that trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission ("SEC") other
than normal holiday and weekend closings;
(2) During any period when an emergency exists, as defined by the rules of
the SEC, as a result of which it is not reasonably practicable for the Fund to
dispose of securities owned by it or fairly to determine the value of its
assets; and
(3) For such other periods as the SEC may permit.
DETERMINATION OF NET ASSET VALUE
The Fund's net asset value per share will be determined once each day as of
the close of trading on the New York Stock Exchange (currently 3:00 p.m., Omaha
time) on days on which the New York Stock Exchange is open for business,
provided that the net asset value need not be determined on days when no shares
are tendered for redemption and no order for shares is received. Currently the
New York Stock Exchange and the Fund are closed for business on the following
holidays (or on the nearest Monday or Friday if the holiday falls on a weekend):
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas. In addition, investors will not be able
to purchase or redeem shares on Martin Luther King, Jr. Day, Columbus Day or
Veteran's Day because Norwest Bank Nebraska, N.A., the Fund's custodian, is
closed on such days. The Fund's offices will, however, be open on such days to
accept orders for next day purchases and redemptions and to respond to any
questions investors may have.
Net asset value will be computed by dividing the market value of the Fund's
assets (including dividends and interest received or accrued), less all
liabilities (including expenses payable or accrued), by the number of
outstanding shares of the Fund.
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<PAGE>
For purposes of calculating the net asset value of shares of the Fund,
securities traded on a national or regional securities exchange are valued at
the last sale price if the security is traded on the valuation date. Securities
not listed on an exchange or securities in which there were no reported
transactions will be valued at the mean between the last current closing bid and
ask prices. Any securities or other assets for which reliable recent market
quotations are not readily available will be valued at fair value as determined
in good faith by or under the direction of the Company's Board of Directors or a
committee of the Board.
With the approval of the Company's Board of Directors, the Fund may utilize a
pricing service, bank or broker-dealer experienced in valuing securities to
perform any of the valuation determinations for the Fund.
THE INVESTMENT ADVISER
The Investment Adviser is Wallace R. Weitz & Company, 1125 South 103 Street,
Suite 600, Omaha, Nebraska 68124-6008. The Investment Adviser also serves as the
Fund's Transfer Agent, Dividend Disbursing Agent and Administrator. The
Investment Adviser furnishes the Fund with continuous investment advice and is
responsible for overall management of the Fund's business affairs subject to
supervision of the Company's Board of Directors. The Fund pays the Investment
Adviser a monthly fee equal to an annual rate of 1% of the Fund's average daily
net assets. The Advisory Fee paid with respect to the Fund is higher than most
other investment companies.
The Fund pays all expenses directly attributable to it. The Adviser reimburses
the Fund monthly or pays directly for a portion of certain operating expenses to
the extent of the advisory fee paid if the total of such expenses exceeds 1.50%
of the annual average net assets. See "The Investment Advisory Agreement" in the
Statement of Additional Information.
For the period ended December 31, 1995, the Fund incurred "Total Operating
Expenses" based on average net assets of 1.27%.
Wallace R. Weitz has been designated the manager of the Fund by the Investment
Advisor. Mr. Weitz has been in the securities business since 1970, including
employment as an account executive and securities analyst with G.A. Saxton &
Co., Inc. from 1970 to 1973, and thereafter with Chiles, Heider & Co., Inc.
until May, 1983. Since founding and becoming President of the Investment Adviser
in June, 1983, Mr. Weitz has provided investment advice for Weitz Series Fund,
Inc., an open end management investment company consisting of four separate
portfolios, and has managed several equity-oriented private investment
partnerships, as well as a private income partnership and individual accounts.
Wallace R. Weitz owns all outstanding shares of the Investment Adviser, which is
a Nebraska corporation formed in March, 1983.
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<PAGE>
YIELD AND PERFORMANCE COMPARISONS
Advertisements and other sales literature for the Fund may refer to "total
return." Total return is the percentage change between the net asset value of a
Fund share at the beginning of a period and the net asset value of such share at
the end of the period, with dividends and capital gains distributions treated as
reinvested.
The Fund may use comparative performance information from time to time from
such indices as compiled by Dow Jones & Co., Standard & Poor's, Lipper
Analytical Services, Inc., Morningstar, the National Association of Securities
Dealers and Value Line. These indices could include, but are not limited to, the
Dow Jones Industrial Average, the S&P 500, the Lipper Growth and Income Fund
Index and the NASDAQ and Value Line Composites, or any other major recognized
index. This information is referenced for comparative purposes only.
Performance data of the Fund represents past performance and is not
necessarily representative of future performance. Additionally, 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. Performance information may not provide a basis for comparison with other
investments or other mutual funds using a different method of calculating
performance.
DIVIDENDS, DISTRIBUTIONS AND TAXES
It is the intention of the Fund to distribute any net investment income and
any net realized capital gains of the Fund to its shareholders at such times as
may be required to maintain the status of the Fund as a regulated investment
company under the Internal Revenue Code of 1986 as amended (the "Code").
Dividends will automatically be reinvested when paid unless the Fund has been
directed by the shareholder in writing to pay the dividend in cash. Shareholders
may elect to receive dividends in cash by checking the appropriate box on the
Purchase Application when initially investing or may change the instructions by
submitting an amended form. Cash payment of dividends, if requested, will be
mailed within five days of the date such dividends are paid. The taxable status
of income dividends and/or net capital gains distribution is not affected by
whether they are reinvested in additional shares or paid in cash.
The Company intends to qualify the Fund as a "regulated investment company,"
as defined in the Code, by distributing substantially all of its taxable income,
including any realized capital gains, and thus, the Fund will not incur any
Federal income taxes. The Code requires that all regulated investment companies
pay a nondeductible 4% excise tax to the extent the regulated investment company
does not distribute 98% of its ordinary income, determined on a calendar year
basis, and 98% of its capital gains, determined, in general, on an October 31
year end. The required distributions are based only on the taxable income of a
regulated investment company.
Shareholders subject to Federal income taxation will receive taxable dividend
income or capital gains, as the case may be, from distributions whether paid in
cash or received in the form of additional shares. Because income may be derived
from interest as well as dividends, not all of the dividends may qualify for
dividend exclusions or deductions, if any, authorized under the Code. Promptly
after the end of each calendar year, each shareholder will receive a statement
of the Federal income tax status of all dividends and distributions paid during
the year.
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The Company is subject to the backup withholding provisions of the Code and is
required to withhold income tax from dividends paid to shareholders at the
required rate if a shareholder fails to furnish the Company with a taxpayer
identification number or under certain other circumstances. Shareholders are
required to complete the Form W-9 certifications included on the Purchase
Application.
This discussion is only a summary and relates solely to Federal tax matters.
Dividends may also be subject to state and local taxation. Shareholders are
encouraged to consult with their personal tax advisers. See "Taxation" in the
Statement of Additional Information.
THE DISTRIBUTOR
The Fund is distributed by Weitz Securities, Inc., an affiliate of the Fund's
Investment Adviser. Shares are sold at the net asset value per share, without a
sales load. The Distributor will bear any sales or promotional costs incurred in
connection with the sale of the Fund's shares.
The Fund has entered into a Distribution Agreement (the "Distribution
Agreement") with Weitz Securities, Inc., which will continue in effect as long
as it is approved annually by a majority of those directors who are not parties
to the Distribution Agreement or "interested persons" of such parties and by
either the Board of Directors of the Company or a majority of the outstanding
voting securities of the Fund ("majority" is defined under "Investment
Restrictions -- Fundamental Investment Restrictions"). The Distribution
Agreement may be terminated by either party without penalty on 60 days' written
notice and will automatically terminate in the event of its assignment.
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GENERAL INFORMATION
ORGANIZATION AND CAPITAL STRUCTURE
The Company is authorized to issue a total of 1,000,000,000 shares of common
stock in series with a par value of $.00001 per share. Fifty million of these
shares have been authorized by the Board of Directors to be issued in the series
designated the Partners Value Fund. The Board of Directors may authorize
additional shares in series without approval of the shareholders of the Fund.
All shares, when issued, will be fully paid and non-assessable and will be
redeemable and freely transferable. All shares have equal voting rights. They
can be issued as full or fractional shares. A fractional share has pro rata the
same kind of rights and privileges as a full share. The shares possess no
preemptive or conversion rights.
Each share of the Fund has one vote (with proportionate voting for fractional
shares) irrespective of the relative net asset value of the shares. On some
issues, such as the election of directors, all shares of the Fund vote together
as one series. Cumulative voting is authorized. This means that in a vote for
the election of directors, shareholders may multiply the number of shares they
own by the number of directors and then allocate such votes to one or more
directors, thereby allowing for the possibility that a shareholder may be able
to elect a director even though they do not have the majority of the outstanding
shares. In the event that the Company authorizes additional series of shares of
the Company as separate funds, on issues affecting only a particular fund, the
shares of the affected fund vote as a separate series. An example of such an
issue would be a fundamental investment restriction pertaining to only one Fund.
The Board of Directors of the Company is responsible for managing the business
and affairs of the Company. The Board of Directors currently consists of five
members and exercises all of the rights and responsibilities required by, or
made available under, Nebraska corporate law. Pursuant to the Investment
Advisory Agreement, the Investment Adviser provides the Fund with continuous
investment advice and is responsible for the overall management of the Company's
business affairs, subject to supervision of the Company's Board of Directors.
See "The Investment Adviser" above.
SHAREHOLDER MEETINGS
It is possible that the Company will not hold annual or periodically scheduled
regular meetings of shareholders. Annual meetings of shareholders will not be
held unless called by the shareholders pursuant to the Nebraska Business
Corporation Act or unless required by the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder. Special meetings of the
shareholders may be held, however, at any time and for any purpose, if called by
(i) the Chairman of the Board, the President and two or more directors, (ii) by
one or more shareholders holding ten percent or more of the shares entitled to
vote on matters presented to the meeting, or (iii) if an annual meeting is not
held within any thirteen month period, the local district court, upon
application of any shareholder, may summarily order that such meeting be held.
In addition, the Investment Company Act of 1940 requires a shareholder vote for
all amendments to fundamental investment objectives, advisory contracts and
amendments thereto. See "Capital Stock" in the Statement of Additional
Information.
FUND EXPENSES
The assets received by the Company for the issue or sale of shares of the Fund
and all income, earnings, profits, and proceeds thereof, subject
21
<PAGE>
only to the rights of creditors, are allocated to the Fund, and constitute the
underlying assets of the Fund. The underlying assets of the Fund are required to
be segregated on the books of account, and are to be charged with the expenses
in respect to the Fund and with the general expenses of the Company. In the
event that the Company adds additional portfolios, any general expenses of the
Company not readily identifiable as belonging to a particular portfolio shall be
allocated among all portfolios based upon the total assets of the portfolio at
the time such expenses are incurred. The Company and any portfolio pays all of
its own operating expenses, other than those expressly assumed by the Investment
Adviser, including, without limitation, custodian charges, transfer agent,
dividend disbursing agent charges and other expenses related to administration
and registration. The Investment Adviser has agreed to reimburse the Fund up to
the amount of the advisory fee paid for total expenses exceeding 1.50% of its
annual average net asset value. See "Investment Advisory and Other Services --
The Investment Advisory Agreement" in the Statement of Additional Information.
REPORTS TO SHAREHOLDERS
The Fund will issue semiannual reports which will include a list of securities
owned by the Fund and financial statements which, in the case of the annual
report, will be examined and reported upon by the Fund's independent auditors.
It is the Fund's practice to send a single copy of any such report to a
shareholder with multiple accounts (single, retirement, joint, etc.) if such
accounts have the same tax identification number and the same address. A
shareholder may request that additional copies of such report be sent by
notifying the Fund.
CUSTODIAN, TRANSFER AGENT AND DIVIDEND PAYING AGENT
Norwest Bank Nebraska, N.A., Omaha, Nebraska, acts as Custodian for the Fund's
cash and investments. The Investment Adviser acts as transfer agent and dividend
paying agent and provides the Fund with certain accounting and shareholder
accounting services.
LEGAL OPINIONS
The legality of the shares offered hereby will be passed upon, and the opinion
with respect to all tax matters will be rendered by, Messrs. Cline, Williams,
Wright, Johnson & Oldfather, 1900 FirsTier Bank Building, Lincoln, Nebraska
68508.
AUDITORS
The Fund's auditors are KPMG Peat Marwick LLP, independent certified public
accountants.
22
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- --------------------------------------------------------------------------------
WEITZ PARTNERS, INC.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Summary................................ 2
Risk Factors........................... 3
Fees, Charges and Fund Expenses........ 4
Financial Highlights................... 5
Investment Objectives and Policies..... 8
Investment Restrictions................ 8
Securities and Other Investment
Practices.......................... 10
Purchase of Shares..................... 13
Redemption of Shares................... 15
Determination of Net Asset Value....... 17
The Investment Adviser................. 18
Yield and Performance Comparisons...... 19
Dividends, Distributions and Taxes..... 19
The Distributor........................ 20
General Information.................... 21
</TABLE>
No salesperson, or other person, has been authorized to give any information
or to make any representations, other than those contained in this Prospectus,
in connection with the offer contained in this Prospectus, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Fund or by the Distributor. This Prospectus does
not constitute an offering by the Distributor in any state in which such
offering may not lawfully be made.
PROSPECTUS
PARTNERS VALUE FUND
Dated April 19, 1996
INVESTMENT ADVISER
WALLACE R. WEITZ & COMPANY
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
DISTRIBUTOR
WEITZ SECURITIES, INC.
CUSTODIAN
NORWEST BANK NEBRASKA, N.A.
1919 DOUGLAS STREET
OMAHA, NEBRASKA 68102
TRANSFER AGENT AND
DIVIDEND PAYING AGENT
WALLACE R. WEITZ & COMPANY
<PAGE>
Weitz Partners, Inc.
STATEMENT OF ADDITIONAL INFORMATION
April 19, 1996
Table of Contents
Page
----
General Information and History. . . . . . . . . . . . . . . . . . . . . . 2
Investment Objective, Policies and Restrictions . . . . . . . . . . . . . 2
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . 8
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . 10
Portfolio Transactions and Brokerage Allocations . . . . . . . . . . . . . 12
Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . 15
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Calculation of Performance Data. . . . . . . . . . . . . . . . . . . . . . 16
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Appendix A - Ratings of Corporate
Obligations and Commercial Paper . . . . . . . . . . . . . . . . . . . . A-1
This Statement of Additional Information is not a prospectus. This
Statement of Additional Information relates to the Prospectus of the Partners
Value Fund, dated April 19, 1996, and should be read in conjunction therewith.
Copies of the Prospectus may be obtained from the Fund at 1125 South 103 Street,
Suite 600, Omaha, Nebraska, 68124-6008.
<PAGE>
GENERAL INFORMATION AND HISTORY
The shares of Weitz Partners, Inc. (the "Company") are offered in series
with each series designated as and representing a separate fund of investments
with its own investment objectives, policies and restrictions. At the present
time, only one series is authorized and is designated the Partners Value Fund
(the "Fund").
On December 31, 1993, the Fund succeeded to substantially all of the
assets of Weitz Partners II-Limited Partnership (the "Partnership"), a Nebraska
investment limited partnership, which was formed in May 1983. Wallace R. Weitz,
the portfolio manager for the Fund, was the General Partner of the Partnership
and managed its assets according to investment objectives and policies
substantially identical to those of the Fund. The investment objective and
policies of the Fund are set forth below and in the Prospectus.
The Fund is a non-diversified investment management company as defined
under the Investment Company Act of 1940 (the "1940 Act"). However, the Company
is a diversified investment management company under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"). See "Investment
Objective, Policies and Restrictions" for the Fund below and see "Taxation".
Unless otherwise indicated, the investment restrictions as set forth
separately below for the Fund are considered fundamental policies and cannot be
changed without the vote of a majority of the Fund's outstanding shares.
"Majority," as used herein and in the Prospectus, means the lesser of (a) 67% or
more of the Fund's outstanding shares voting at a special or annual meeting of
shareholders at which more than 50% of the outstanding shares are represented in
person or by proxy or (b) more than 50% of the Fund's outstanding shares.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
SECURITIES AND OTHER INVESTMENT PRACTICES
GENERAL The Fund's investment objective is capital appreciation.
Ordinarily, the Fund will be principally invested in common stocks and other
securities convertible to equity, such as rights, warrants, convertible bonds
and preferred stock. However, the Fund has adopted a policy which permits
Wallace R. Weitz & Company (the "Investment Adviser") to invest a portion or all
of its assets in high quality nonconvertible preferred stock, high quality
nonconvertible debt securities and high quality United States Government and
governmental agency and instrumentality obligations, or retain funds in cash or
cash equivalents, such as money market mutual fund shares when the Investment
Adviser believes that prevailing market or economic conditions warrant a
temporary defensive investment position. Securities issued or guaranteed by the
United States Government may include, for example, Treasury Bills, Bonds and
Notes which are direct obligations of the United States Government. Obligations
issued or guaranteed by United States Government agencies or instrumentalities
may include, for example, those of Federal Intermediate Credit Banks, Federal
Home Loan Banks, Federal National Mortgage Association and Farmers Home
Administration. Such securities will include, for example, those supported by
the full faith and credit of the United States Treasury or the right of the
agency or
2
<PAGE>
instrumentality to borrow from the Treasury as well as those supported only by
the credit of the issuing agency or instrumentality.
INDUSTRY CONCENTRATION Although the Fund will not concentrate its
investments in any one industry, it reserves the right to invest up to 25% of
the value of its net assets (at the time of purchase and after giving effect
thereto) in the securities of companies principally engaged in a particular
industry.
CONVERTIBLE SECURITIES In addition to common and preferred stocks, the
Fund may invest in other securities having equity features because they are
convertible into, or represent the right to purchase, common stock. Convertible
bonds and debentures are corporate debt instruments, frequently unsecured and
subordinated to senior corporate debt, which may be converted into common stock
at a specified price. Such securities may trade at a premium over their face
amount when the price of the underlying common stock exceeds the conversion
price, but otherwise will normally trade at prices reflecting current interest
rate trends.
LOWER RATED CORPORATE DEBT SECURITIES Convertible corporate debt
securities purchased by the Fund will primarily be of investment grade (e.g.,
Moody's Investors Service rating Aaa, Aa, A or Baa; Standard & Poor's
Corporation rating AAA, AA, A or BBB), as evidenced by ratings of established
rating agencies or similar criteria, however, the Fund may from time to time
invest up to 5% of its net assets in lower rated corporate debt securities (i.e.
"junk bonds") available in the secondary market. Such an investment will be
made only if it would appear likely to the Investment Adviser that the
investment will generate capital gains as a result of the issuer's merger,
reorganization or anticipated favorable change of financial condition.
The Fund's investment in "junk bonds", while generally providing greater
income and opportunity for gain than investments in higher rated securities,
usually entails greater risk of principal and income (including the possibility
of default or bankruptcy of the issuers of such securities), and involves
greater volatility of price (especially during periods of economic uncertainty
or change) than investments in higher rated securities. Because yields may vary
over time, no specific level of income can ever be assured. In particular,
securities rated lower than "Baa" by Moody's or "BBB" by S&P or comparable
securities either rated by another rating organization or unrated (commonly
known as "junk bonds") are considered speculative. These lower rated, higher
yielding fixed income securities generally tend to reflect economic changes (and
the outlook for economic growth), short-term corporate and industry developments
and the market's perception of their credit quality (especially during times of
adverse publicity) to a greater extent than higher rated securities (which react
primarily to fluctuations in the general level of interest rates), although
these lower rated fixed income securities are also affected by changes in
interest rates. In the past, economic downturns or an increase in interest
rates have under certain circumstances caused a higher incidence of default by
the issuers of these securities and may do so in the future, especially in the
case of highly leveraged issuers. During certain periods, the higher yields on
the Fund's lower rated, high yielding fixed income securities will be paid
primarily because of the increased risk of loss of principal and income, arising
from such factors as the heightened possibility of default or bankruptcy of the
issuers of such securities. Because of the nature of a portfolio of fixed
income securities, the Fund may continue to earn the same level of interest
income while its net asset value declines as a result of a market value
3
<PAGE>
decline of the bonds. This could result in an increase in the Fund's yield
despite the actual loss of principal.
The prices for lower rated bonds may also be affected by legislative and
regulatory developments. For example, federal rules require that savings and
loan associations gradually reduce their holdings of high-yield securities.
Such legislation may depress the prices of outstanding lower rated, high
yielding fixed income securities such as lower rated securities.
Changes in the value of securities subsequent to their acquisition will
not affect cash income but will be reflected in the net asset value of shares of
the Fund. The market for these lower rated fixed income securities may be less
liquid than the market for investment grade fixed income securities.
Furthermore, the liquidity of these lower rated securities may be affected by
the market's perception of their credit quality. Therefore, the Investment
Adviser's judgment may at times play a greater role in valuing these securities
than in the case of investment grade fixed income securities, and it also may be
more difficult during times of certain adverse market conditions to sell these
lower rated securities at their fair market value to meet redemption requests or
to respond to changes in the market. While the Investment Adviser will refer to
ratings issued by established ratings agencies, it is not a policy of the Fund
to rely exclusively on ratings issued by these agencies, but rather to
supplement such ratings with the independent and ongoing review by the
Investment Adviser of credit quality. The Fund did not invest in any lower rated
corporate debt securities during the fiscal year ended December 31, 1995. A
complete description of the S&P and Moody's ratings of fixed income securities
is attached as Appendix A.
WARRANTS AND RIGHTS Warrants and rights are options to purchase common
stock at a specified price for a specified period of time. Their trading price
will normally reflect the relationship between the option price and the current
market price of the underlying common stock. If not sold or exercised before
their expiration date they become valueless. The Fund's investments in
warrants, which are valued at market, may not exceed 5% of the value of the
Fund's net assets, provided that no more than 2% of the value of the Fund's net
assets may be warrants which are not listed on the New York or American Stock
Exchanges and further provided that warrants acquired in units or attached to
securities are deemed to be without value for purposes of this limitation.
INVESTMENT COMPANY SHARES The Fund may purchase securities of other
investment companies described as money market funds, subject to the limitations
discussed below under the caption "Fundamental Investment Restrictions." The
Fund does not intend to purchase any such securities involving the payment of a
front-end sales load. The Fund may purchase shares of closed-end investment
companies which frequently trade at a discount from their net asset value.
FOREIGN SECURITIES The Fund may purchase foreign securities that are
listed on a principal foreign securities exchange or over-the-counter market, or
which are represented by American Depository Receipts and are listed on a
domestic securities exchange or traded in the United States over-the-counter
market. The Fund may occasionally convert U.S. dollars into foreign currency,
but only to effect securities transactions on a foreign securities exchange and
not to hold such currency as an investment. The Fund will not invest in forward
foreign currency
4
<PAGE>
contracts. While the Fund has no present intention to invest any significant
portion of its assets in foreign securities, it reserves the right to invest not
more than 25% of the value of its total assets (at time of purchase, giving
effect thereto) in the securities of foreign issuers and obligors.
Investors should recognize that investments in foreign companies involve
certain considerations that are not typically associated with investing in
domestic companies. An investment may be affected by changes in currency rates
and in exchange control regulations. Foreign companies are not generally
subject to uniform accounting, auditing and financial reporting standards
comparable to those applicable to domestic companies, and there may be less
publicly available information about a foreign company than about a domestic
company. Some foreign stock markets may have substantially less trading
activity than the American securities markets, and securities of some foreign
companies may be less liquid than securities of comparable domestic companies.
Also, commissions on transactions in foreign securities may be higher than
similar transactions on domestic stock markets and foreign governments may
impose taxes on securities transactions or ownership. There is generally less
governmental regulation of stock exchanges, brokers, and listed and unlisted
companies in foreign countries than in the United States. In addition,
individual foreign economies may differ favorably or unfavorably from the United
States' economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position.
RESTRICTED/ILLIQUID SECURITIES The Fund may invest in securities
acquired in a privately negotiated transaction directly from the issuer or a
holder of the issuer's securities and which, therefore, could not ordinarily be
sold by the Fund except in another private placement or pursuant to an effective
registration statement under the Securities Act of 1933 or an available
exemption from such registration requirements. The Fund will not invest in any
such restricted securities or illiquid securities which will cause the then
aggregate value of all such securities to exceed 10% of the value of the Fund's
total assets (at the time of investment, giving effect thereto). Restricted
securities will be valued in such manner as the Board of Directors in good faith
deems appropriate to reflect their fair value. See "Determination of Net Asset
Value" in the Prospectus. The purchase price, subsequent valuation and resale
price of restricted securities normally reflect a discount from the price at
which such securities trade when they are not restricted, since the restriction
makes them less marketable. The amount of the discount from the prevailing
market price will vary depending upon the type of security, the character of the
issuer, the party who will bear the expenses of registering the restricted
securities, and prevailing supply and demand conditions.
COVERED CALL OPTIONS The Fund may write covered call options to
generate premium income which, is considered by the Investment Adviser to be an
acceptable investment result. Covered call options are contracts sold on a
national exchange or in the over-the-counter options market which allow the
purchaser to buy the underlying security at a specified price (the "strike
price") prior to a certain date, normally within 270 days. "Covered" options
are those in which the option seller (the "writer") owns the underlying
securities. Writing covered call options may increase the Fund's income since
it receives a payment (the "premium") for writing the option. To the extent
that it writes covered call options, the Fund will forego any opportunity for
appreciation in the underlying securities above the strike price during the term
of the option, as
5
<PAGE>
the underlying securities will be subject to certain deposit procedures and,
therefore, unavailable for sale. The Fund may attempt to protect itself against
a decline in the price of the underlying security or may attempt to benefit from
an anticipated increase in such price, by "closing out" the covered call, that
is, purchasing an identical call in the open market. However, there is no
assurance that such calls will always be available for purchase in the secondary
market at a price which will produce the desired result. The absence of a
liquid secondary market in such securities could result from numerous
circumstances, such as insufficient trading interest, restrictions imposed by
exchanges as to options trading generally or suspensions affecting particular
securities, inadequacy of exchange or clearing corporation facilities or
decisions by exchanges to discontinue or limit operations trading.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund may not:
1. Underwrite the securities of other issuers, except the Fund may
acquire restricted securities under circumstances such that, if the securities
are sold, the Fund might be deemed to be an underwriter for purposes of the
Securities Act of 1933.
2. Purchase or sell real estate or interests in real estate, but the
Fund may purchase marketable securities of companies holding real estate or
interests in real estate.
3. Purchase or sell commodities or commodity futures contracts.
4. Issue any senior securities (as defined in the Investment Company
Act of 1940, as amended) other than that as set forth below in restriction
number 6.
5. Make loans to other persons except by the purchase of a portion
of an issue of publicly distributed bonds, debentures or other debt securities;
provided that the Fund may purchase privately sold bonds, debentures or other
debt securities immediately convertible into equity securities, subject to the
10% restriction applicable to the purchase of restricted or illiquid securities.
6. Borrow money except for temporary or emergency purposes and then
only from banks and in an aggregate amount not exceeding 5% of the value of the
Fund's total assets at the time any borrowing is made.
7. Purchase securities on margin, but the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities.
8. Make short sales of securities or sell puts, calls, straddles,
spreads or combinations thereof, except that the Fund may write covered call
options as described under "Investment Objective, Policies and Restrictions."
9. Participate on a joint or joint and several basis in any
securities trading account.
6
<PAGE>
10. Purchase the securities of any other investment companies, except
as provided by Section 12(d)(1)(F) of the Investment Company Act of 1940 and
only in a registered investment company described as a money market fund, and
where immediately after such purchase or acquisition (i) not more than 3 per
centum of the total outstanding stock of such issuer is owned by the Fund and
all affiliated persons of the Fund (ii) no issuer of a security acquired by the
Fund pursuant to this restriction shall be obligated to redeem such security in
an amount exceeding 1 percent of the issuer's total outstanding securities
during any period of less than 30 days and (iii) that the purchase of such
securities does not exceed 10% of the assets of the Fund.
11. Invest in companies for the purpose of exercising management or
control.
12. Invest more than 25% of the value of its net assets (at the time
of purchase and after giving effect thereto) in the securities of any one
industry.
13. As to 50% of its total assets, invest more than 5% of its total
assets, taken at market value at the time of a particular purchase, in
securities of any one issuer (other than in government securities).
14. Adopt any investment objective otherwise than as described under
"Investment Objective" in the Prospectus.
The Fund has also adopted certain non-fundamental policies for the
purposes of compliance with securities laws of those states where the Fund
intends to sell or offer its shares. In connection with the Fund's registration
in Texas, the Fund will not invest in real estate limited partnerships and will
not invest in oil, gas or mineral leases.
PORTFOLIO TURNOVER
The turnover rate for the Fund is the ratio of the lesser of annual
purchases or sales of securities for the Fund to the average monthly value of
such securities, not including short-term securities maturing in less than 12
months. A 100% portfolio turnover rate would occur, for example, if the lesser
of the value of purchases or sales of securities for a particular year were
equal to the average monthly value of the securities owned during such year.
The portfolio turnover for the Fund for the periods ended December 31, 1995 and
December 31, 1994 was 51% and 33%, respectively. The Fund is not expected to
have a portfolio turnover rate in excess of 100%. The portfolio turnover rate
will not be a limiting factor when management deems changes in the Fund's
portfolio appropriate. The higher a portfolio's turnover rate, the higher will
be its expenditures for brokerage commissions and related transaction costs.
PURCHASE OF SHARES
See "Purchase of Shares" in the Prospectus for basic information on how
to purchase shares of the Fund.
An order to purchase shares is accepted when the Distributor receives a
Purchase Application and a check or notification of a wire transfer of funds in
payment of the applicable
7
<PAGE>
purchase price. An investor will become a shareholder when the net asset value
applicable to the order is next determined. Net asset value of the Fund's
shares is determined once each day at the close of the New York Stock Exchange
(3:00 p.m. Omaha time). If the completed order is received before 3:00 p.m.
Omaha time, an order will be effective the same day and the investor will become
a shareholder of record that day. If the order is received after 3:00 p.m.
Omaha time the investor will become a shareholder of record at the net asset
value determined the following business day.
When an investor purchases shares of the Fund, a shareholder's
investment account is opened in his/her name on the books of the Company. No
certificates for shares are issued. A continuing permanent record of each
shareholder's investment account is maintained by the Company. After every
transaction shareholders will receive a statement showing the details of the
transaction and the number of shares held in the shareholder's investment
account. Dividends and capital gains distributions will be invested in
additional shares of the Fund, unless otherwise indicated on the Purchase
Application.
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
officers and directors of the Company:
(*)Wallace R. Weitz President, Wallace R. Weitz & Company, a registered
President, Treasurer investment adviser, since July 1983; President, Weitz
and Director Securities, Inc., a registered broker-dealer, since
its inception in January 1986; President, Treasurer
and Director of Weitz Series Fund, Inc., a registered
investment company, since 1990; President, Treasurer
and Director, Weitz Value Fund, Inc., a registered
investment company, January 1986 until March 1990;
previously employed as account executive and
financial analyst for Chiles, Heider & Co., Inc.
(1973-1983) and G. A. Saxton & Co., Inc. (1970-1973);
Chartered Financial Analyst and 1970 graduate of
Carleton College with degree in economics.
John W. Hancock Partner, Hancock & Dana (certified public accountants)
Director since its inception in 1985; Director, Weitz Series
Fund, Inc., since 1990; Director, Weitz Value Fund,
Inc., January 1986 until March 1990; Vice President,
Wallace R. Weitz & Company, July 1988 until December
1988; Senior Tax Manager, Peat, Marwick, Mitchell &
Co., Omaha, Nebraska, from 1978 to 1985.
Carroll E. Fredrickson Certified Public Accountant and business consultant,
Director 1980 to present; Director, Weitz Series Fund, Inc.,
since 1990; Director, Weitz Value Fund, Inc., July
1988 until March 1990; Managing Partner, Peat,
Marwick, Mitchell & Co., Omaha, Nebraska until 1980.
8
<PAGE>
*Thomas R. Pansing, Jr. Partner, Gaines, Mullen, Pansing, Hogan, attorneys,
Director since 1973; Director, Weitz Series Fund, Inc., since
1990; Director, Weitz Value Fund, Inc., January 1986
until March 1990.
Richard D. Holland Prior to his retirement in 1984, Mr. Holland was Vice
Chairman, Rollheiser, Holland & Kahler (1979-1984)
(advertising) and President of Holland, Dreves &
Reilly (1954-1979) (advertising); Director, Weitz
Series Fund, Inc. since June, 1995.
Mary K. Beerling Vice President, Wallace R. Weitz & Company since July
Vice President and 1994; Vice President, Weitz Securities, Inc., since
Secretary July 1994; Vice President and Secretary, Weitz Series
Fund, Inc., since July 1994; Partner, Kutak Rock,
attorneys, from 1989 to 1994.
Linda L. Lawson Vice President, Wallace R. Weitz & Company since
Vice President June, 1992; Vice President of Weitz Series Fund,
Inc., since 1992; Manager, Marketing Financial
Management, Mutual of Omaha, Omaha, NE, 1988-1992;
Assistant Treasurer, Farm Credit Banks, Omaha, NE,
1983-1988. Ms. Lawson is the sister of Richard F.
Lawson.
Richard F. Lawson Vice President, Wallace R. Weitz & Company since
Vice President and December 1992 and a financial analyst since January
Assistant Secretary 1991; Portfolio Manager, Hickory Portfolio of Weitz
Series Fund, Inc. since 1992; Vice President, Weitz
Securities, Inc. since March 1995; management
consultant, Temple, Barker & Sloane, Inc., July,
1984-September, 1989. Mr. Lawson is the brother
of Linda L. Lawson.
(*)Mr. Weitz and Mr. Pansing are "interested persons" (as that term is
defined in the Investment Company Act of 1940) of the Company and the Investment
Adviser. The mailing address of all officers and directors of the Company is
1125 South 103 Street, Suite 600, Omaha, Nebraska 68124-6008.
9
<PAGE>
COMPENSATION TABLE The table below sets forth certain information with
respect to compensation of all directors of the Company for the fiscal year
ended December 31, 1995. Under the Advisory Agreement remuneration of officers
is paid by the Investment Adviser.
COMPENSATION TABLE
Total Compensation
Aggregate from Company and
Name of Compensation from Weitz Series Fund, Inc.
Person, Position the Company paid to directors
- ---------------- ----------- -----------------
Carroll E. Fredrickson, Director $1,000 $2,900
John W. Hancock, Director 800 2,400
Clifford S. Hayes, Director (1)(2) N/A N/A
Richard D. Holland, Director (3) 500 1,400
Thomas R. Pansing, Jr., Director 900 2,700
Wallace R. Weitz, Director (2) N/A N/A
(1) Mr. Hayes resigned his position as a member of the Board of Directors
effective 2/7/95.
(2) As directors who are also officers of the Investment Adviser, Mr. Hayes and
Mr. Weitz receive no compensation for their service as directors.
(3) Mr. Holland became a member of the Board of Directors in June, 1995.
MANAGEMENT OF THE INVESTMENT ADVISER Mr. Weitz is president, treasurer,
a director and sole shareholder of the Investment Adviser. He intends to devote
substantially all of his time to the business of the Investment Adviser.
INVESTMENT ADVISORY AND OTHER SERVICES
GENERAL
The investment adviser and administrator for the Fund is Wallace R.
Weitz & Company. The Investment Adviser acts pursuant to a written agreement
which will be periodically approved by the directors or the shareholders of the
Fund. Weitz Securities, Inc. acts as the Fund's distributor ("Distributor").
The address for the Adviser and Distributor is 1125 South 103 Street, Suite 600,
Omaha, Nebraska, 68124-6008.
CONTROL OF THE ADVISER AND THE DISTRIBUTOR
The Adviser and Distributor are wholly owned by Wallace R. Weitz.
THE INVESTMENT ADVISORY AGREEMENT
The Investment Adviser and the Fund have entered into a Management and
Investment Advisory Agreement ("Advisory Agreement") last approved by the Board
of Directors of the Company on January 30, 1996.
The Advisory Agreement terminates automatically in the event of
assignment. In addition, the Advisory Agreement is terminable at any time,
without penalty, by the Board of Directors
10
<PAGE>
of the Company or by vote of a majority of the Fund's outstanding voting
securities on not more than 60 days' written notice to the Investment Adviser,
or by the Adviser, on not more than 60 days' written notice to the Company.
Unless sooner terminated, the Advisory Agreement shall continue in effect for
more than two years after its execution only so long as such continuance is
specifically approved at least annually by either the Board of Directors or by a
vote of a majority of the outstanding voting securities of the Fund, provided
that in either event such continuance is also approved by a vote of a majority
of the directors who are not parties to such agreement, or interested persons of
such parties, cast in person at a meeting called for the purpose of voting on
such approval.
Pursuant to the Advisory Agreement, the Company pays to the Adviser, on
a monthly basis, an annual advisory fee equal to 1% of the Partners Value Fund's
average daily net assets. The fee paid to the Adviser is higher than that paid
by most mutual funds. The total amount of advisory fees paid to the Investment
Adviser for the fiscal years ended December 31, 1995 and 1994 was $642,570 and
$527,197, respectively.
Under the Advisory Agreement, the Investment Adviser is responsible for
selecting the Fund's securities. The Investment Adviser will also provide
certain management and certain other personnel to the Company. The Distributor,
Weitz Securities, Inc., in its capacity of principal underwriter, will bear any
sales or promotional costs incurred in connection with the sale of the Fund's
shares.
The Fund will pay all expenses of operations not specifically assumed by
the Investment Adviser. These will include, without limitation: custodian,
administrative, transfer agent and shareholder recordkeeping charges; charges
for the services of legal counsel and independent public accountants;
compensation of directors other than those directors who are also officers of
the Investment Adviser and expenses incurred by them in connection with their
services to the Fund; expenses of printing and distributing to shareholders
notices, proxy solicitation material, prospectuses and reports; brokers'
commissions; taxes; interest; payment of premiums for certain insurance carried
by the Fund, and expenses of complying with federal, state and other laws. Such
expenses will be charged to the Fund.
The Advisory Agreement provides that neither the Investment Adviser nor
any of its officers or directors, agents or employees will have any liability to
the Company or its shareholders for any error of judgment, mistake of law or any
loss arising out of any investments, or for any other act or omission in the
performance of its duties as Investment Adviser under the Advisory Agreement,
except for liability resulting from willful misfeasance, bad faith or gross
negligence on the part of the Investment Adviser in the performance of its
duties or from reckless disregard by the Investment Adviser of its obligations
under the Advisory Agreement. The Investment Adviser has contractually retained
all rights to the use of the name "Weitz" by the Company. In the event the
Company entered into an agreement with another investment adviser the Company
could be required to change its corporate name.
The laws of certain states require that if a mutual fund's expenses
(including advisory fees but excluding interest, taxes, brokerage commissions
and extraordinary expenses) exceed certain percentages of average net assets,
the fund must be reimbursed for such excess expenses. The
11
<PAGE>
Company believes that its fee structure with respect to the Fund will satisfy
applicable state requirements. The Adviser has voluntarily agreed to reimburse
the Fund to the extent of the advisory fee paid, to the extent that expenses,
excluding interest, taxes and brokerage commissions, exceed 1.50% annually of
its average daily net assets.
THE ADMINISTRATOR
The Investment Adviser has also been engaged as the Fund's Administrator
under an Administration Agreement. Under this Agreement the Fund pays a monthly
fee calculated at a maximum annual rate of .25% of average daily net assets for
customary services related to fund accounting, record keeping, compliance,
registration, transfer agent and dividend disbursing. The maximum fee may be
decreased from time to time and all or a portion of the fee may be waived from
time to time. The fee cannot, however, be increased without the approval of the
Board of Directors of the Fund. The administrative fee for the fiscal year
ended December 31, 1995 was .12%.
THE DISTRIBUTOR
The Distributor offers shares of the Fund on a continuous basis without
compensation from the Fund.
OTHER SERVICES
The Fund's custodian is Norwest Bank, N.A., Omaha, Nebraska. The Fund's
accountant is KPMG Peat Marwick LLP, Omaha, Nebraska.
PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATIONS
The Investment Adviser furnishes advice and recommendations with respect
to the Fund's investment decisions and, subject to the instructions of the Board
of Directors of the Company, determines the broker to be used in each specific
transaction. Principal market makers will be used for the execution of
transactions of unlisted securities unless it has been determined that better
price and execution are available elsewhere.
The Investment Adviser attempts to obtain from brokers the most
favorable price and execution available. In determining the most favorable
price and execution all factors relevant to the Fund's best interest are
considered, including, for example, price, the size of the transaction, the
nature of the market for the security, the amount of commission, the timing of
the transaction taking into account market prices and trends, the reputation,
experience and financial stability of the broker-dealer involved and the quality
of service rendered by the broker-dealer in other transactions. Subject to
these considerations, the Investment Adviser may place orders for the purchase
or sale of Fund securities with brokers or dealers who have provided research,
statistical or other financial information and services.
Because of such factors, most of which are subject to the best judgment
of the Investment Adviser, the Investment Adviser may pay a broker which
provides brokerage and research
12
<PAGE>
services to the Fund an amount of commission for effecting a securities
transaction in excess of the amount of commission another broker-dealer would
have charged for effecting that transaction, provided that the Investment
Adviser has determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by the broker effecting the transactions, viewed in terms of either
that particular transaction or the ability to execute possibly difficult
transactions in the future. Such research services furnished by brokers through
whom the Adviser effects securities transactions are used by the Adviser in
servicing all of its accounts and are not used exclusively with respect to
transactions for the Fund.
Brokerage and research services, as provided in Section 28(e)(3) of the
Securities Exchange Act of 1934, include advice as to the value of securities,
the advisability of investing in, purchasing or selling securities, the
availability of securities or purchasers or sellers of securities; furnishing
analyses and reports concerning issuers, industries, securities, economic
factors and trends, Fund strategy and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such as
clearance and settlement).
During the fiscal years ended December 31, 1995 and 1994, the Fund paid
$162,891 and $118,757, respectively in brokerage commissions for securities
transactions in the Fund. $123,672 or approximately 76% of the total commissions
paid during the fiscal year ended December 31, 1995 were paid to firms that
provided research services to the Investment Adviser.
OPTION TRADING LIMITS
The writing by the Company of options on securities is subject to
limitations established by each of the registered securities exchanges on which
such options are traded. Such limitations govern the maximum number of options
in each class which may be written by a single investor or group of investors
acting in concert, regardless of whether the options are written on the same or
different securities exchanges or are held or written in one or more accounts or
through one or more brokers. Thus, the number of options which one Fund may
write may be affected by other investment advisory clients of the Adviser. An
exchange may order the liquidations of positions found to be in excess of these
limits, and it may impose certain other sanctions. The Adviser believes it is
unlikely that the level of option trading by the Company will exceed applicable
limitations.
CAPITAL STOCK
On March 31, 1996, the Fund had 7,325,287 shares of its common stock
outstanding. As of that date the directors and officers of the Fund
collectively owned 76,696 shares which represented less than 1% of the
outstanding shares of Fund. Also as of that date the following persons owned 5%
or more of the Fund.
13
<PAGE>
Name and Address No. of Shares %
---------------- ----------------
Marquerite Scribante 563,923 7.7%
10030 Fieldcrest DR.
Omaha, NE 68114
ORGANIZATION AND CAPITAL STRUCTURE
The Company is authorized to issue a total of 1,000,000,000 shares of
common stock in series with a par value of $.00001 per share. Fifty million of
these shares have been authorized by the Board of Directors to be issued in the
series designated the Partners Value Fund. The Board of Directors may authorize
additional shares in series without shareholder approval.
All shares, when issued, will be fully paid and non-assessable and will
be redeemable and freely transferable. All shares have equal voting rights.
They can be issued as full or fractional shares. A fractional share has pro
rata the same kind of rights and privileges as a full share. The shares possess
no preemptive or conversion rights.
Each share of a Fund has one vote (with proportionate voting for
fractional shares) irrespective of the relative net asset value of the shares.
On some issues, such as the election of directors, all shares of the Fund vote
together as one series. Cumulative voting is authorized. This means that in a
vote for the election of directors, shareholders may multiply the number of
shares they own by the number of directors and then allocate such votes to one
or more directors, thereby allowing for the possibility that a shareholder may
be able to elect a director even though they do not have the majority of the
outstanding shares. In the event that the Company authorizes additional series
of shares of the Company as separate funds, on issues affecting only a
particular fund, the shares of the affected fund vote as a separate series. An
example of such an issue would be a fundamental investment restriction
pertaining to only one fund.
The Board of Directors of the Company is responsible for managing the
business and affairs of the Company. The Board currently consists of five
members and exercises all of the rights and responsibilities required by, or
made available under, Nebraska corporate law. Pursuant to the Investment
Advisory Agreement, the Investment Adviser provides the Fund with continuous
investment advice and is responsible for the overall management of the Company's
business affairs, subject to supervision of the Company's Board of Directors.
See "Investment Advisory and Other Services" above.
SHAREHOLDER MEETINGS
It is possible that the Fund will not hold annual or periodically
scheduled regular meetings of shareholders. Annual meetings of shareholders
will not be held unless called by the shareholders pursuant to the Nebraska
Business Corporation Act or unless required by the Investment Company Act of
1940 and the rules and regulations promulgated thereunder. Special meetings of
the shareholders may be held, however, at any time and for any purpose, if
called by (i) the Chairman of the Board, the President and two or more
directors, (ii) by one or more shareholders holding ten percent or more of the
shares entitled to vote on matters presented to
14
<PAGE>
the meeting, or (iii) if the annual meeting is not held within any thirteen
month period, the local district court, upon application of any shareholder, may
summarily order that such meeting be held. In addition, the Investment Company
Act of 1940 requires a shareholder vote for all amendments to fundamental
investment policies and investment advisory contracts.
DETERMINATION OF NET ASSET VALUE
The method for determining the public offering price of the Fund shares
is described in the Prospectus in the text under the captions "Purchase of
Shares" and "Determination of Net Asset Value." The net asset value of the
Fund's shares is determined each day that the New York Stock Exchange is open,
provided that the net asset value need not be determined on days when no shares
are tendered for redemption and no order for shares is received. Currently the
New York Stock Exchange and the Fund are closed for business on the following
holidays (or on the nearest Monday or Friday if the holiday falls on a weekend):
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas. In addition, investors will NOT be able
to purchase or redeem shares on Martin Luther King, Jr. Day, Columbus Day or
Veteran's Day because Norwest Bank Nebraska, N.A., the Fund's custodian, is
closed on such days. The Fund's offices will, however, be open on such days to
accept orders for next day purchases and redemptions and to respond to any
questions investors may have.
The Fund's securities fluctuate in value, and hence, the net asset value
per share of the Fund also fluctuates. On December 31, 1995, the net asset
value per share for the Fund was calculated as follows:
Net Assets (73,780,888) Net Asset Value per
----------------------- =
Shares Outstanding (7,104,939) Share ($10.384)
REDEMPTION
Redemption of shares, or payment, may be suspended at times (a) when the
New York Stock Exchange is closed for other than customary weekend or holiday
closings, (b) when trading on said exchange is restricted, (c) when an emergency
exists, as a result of which disposal by the Fund of securities owned by it is
not reasonably practicable, or it is not reasonably practicable for the Fund to
fairly determine the value of its net assets, or (d) during any other period
when the Securities and Exchange Commission, by order, so permits, provided that
applicable rules and regulations of the Securities and Exchange Commission shall
govern as to whether the conditions prescribed in (b) or (c) exist.
TAXATION
The Company intends to qualify the Fund as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
"("the Code"), so as to be relieved of federal income tax on its capital gains
and net investment income distributed to shareholders. To qualify as a
regulated investment company, a Fund must, among other things, receive at least
90% of its gross income each year from dividends, interest, gains from the sale
15
<PAGE>
or other disposition of securities and certain other types of income including,
with certain exceptions, income from options and futures contracts. However,
gains from the sale or other disposition of stock or securities held for less
than three months must constitute less than 30% of the Fund's gross income.
This restriction may limit the extent to which the Fund may effect sales of
securities held for less than three months or transactions in futures contracts
and options even when the Adviser otherwise would deem such transaction to be in
the best interest of a Fund. The Code also requires a regulated investment
company to diversify its holdings. This means that a Fund must have at least
50% of its total assets in cash and cash items and other securities and as to
the securities held, the entire amount of the securities of any one issuer owned
by a Fund may not exceed 5% of the value of 50% of the Fund's assets.
Additionally, the Fund may not invest more than 25% of its total assets in the
securities of any one issuer. This diversification test is in contrast to the
diversification test under the 1940 Act which restricts a fund's investment in
any one issuer to 5% as to 75% of the fund's assets and 25% of a fund's total
assets. The Partners Value Fund is non-diversified under the 1940 Act, but is
diversified under the Code. The Internal Revenue Service has not made its
position clear regarding the treatment of futures contracts and options for
purposes of the diversification test, and the extent to which the Fund could buy
or sell futures contracts and options may be limited by this requirement.
The Code requires that all regulated investment companies pay a
nondeductible 4% excise tax to the extent the regulated investment company does
not distribute 98% of its ordinary income, determined on a calendar year basis,
and 98% of its capital gains, determined, in general, on an October 31 year end.
The required distributions are based only on the taxable income of a regulated
investment company.
Ordinarily, distributions and redemption proceeds earned by a Fund
shareholder are not subject to withholding of federal income tax. However, if a
shareholder fails to furnish a tax identification number or social security
number, or certify under penalties of perjury that such number is correct, the
Company may be required to withhold federal income tax at the current rate
("backup withholding") from all dividend, capital gain and/or redemption
payments to such shareholder. Dividends and capital gain distributions may also
be subject to backup withholding if a shareholder fails to certify under
penalties of perjury that such shareholder is not subject to backup withholding
due to the under-reporting of certain income. These certifications are
contained in the purchase application enclosed with the Prospectus.
CALCULATION OF PERFORMANCE DATA
The Fund may from time to time use comparative performance data in
advertising, comparing the total return of the Fund against market indices such
as the Dow Jones Industrial Average, the S&P 500 and the NASDAQ and Value Line
composite indices. In connection with the quotations of yield in advertisements
or otherwise, the Fund will also provide average annual total returns from the
date of inception for one, five and ten-year periods when, and if, applicable.
Total return is a calculation which equates an initial amount invested to the
ending redeemable value at a specified time. It assumes the reinvestment of all
dividends and capital gains distributions. Average total return will be the
average of the total returns for each year in the
16
<PAGE>
period. The Fund will also provide a total return figure for the most recent
calendar quarter prior to the publication of the advertisement.
The Fund succeeded to substantially all of the assets of Weitz Partners
II-Limited Partnership, a Nebraska investment limited partnership (the
"Predecessor Partnership") as of December 31, 1993. The Fund's investment
objectives and policies are substantially identical to those of the Predecessor
Partnership and Wallace R. Weitz was the General Partner and portfolio manager
for the Predecessor Partnership and is the portfolio manager for the Fund. The
total return for the Fund for the one-year period ended December 31, 1995 was
38.7%; the compound average annual return of the Fund and the Predecessor
Partnership for the five-year period January 1, 1990 through December 31, 1995,
was 18.0% and for the ten-year period January 1, 1985 through December 31, 1995
was 13.1%. The Predecessor Partnership was not registered under the Investment
Company Act of 1940 (the "1940 Act") and therefore was not subject to certain
investment restrictions imposed by the 1940 Act. If the Predecessor Partnership
had been registered under the 1940 Act, the performance of the Predecessor
Partnership may have been adversely affected.
The Fund may use comparative performance information from time to time
from such indices as compiled by Dow Jones & Co., Standard & Poor's, Lipper
Analytical Services, Inc., Morningstar, the National Association of Securities
Dealers and Value Line. These indices could include, but are not limited to,
the Dow Jones Industrial Average, the S&P 500, the Lipper Growth and Income Fund
Index and the NASDAQ and Value Line Composites, or any other major recognized
index. This information is referenced for comparative purposes only.
FINANCIAL STATEMENTS
The audited statements and notes included in the Fund's Annual Report
for the period ended December 31, 1995 and filed with the Securities and
Exchange Commission February 9, 1996, are incorporated herein by reference. An
additional copy of such Annual Report may be obtained without charge by request
from the Fund at its address or phone number shown on the cover page of this
Statement of Additional Information.
17
<PAGE>
APPENDIX A
RATINGS OF CORPORATE OBLIGATIONS AND COMMERCIAL PAPER
RATINGS OF CORPORATE OBLIGATIONS
MOODY'S INVESTORS SERVICE, INC.
AAA: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
AA: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
BAA: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
BA: Bonds rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA: Bonds rated Caa are of poor standing. Such bonds may be in
default or there may be present elements of danger with respect to principal and
interest.
A-1
<PAGE>
CA: Bonds rated Ca represent obligations which are speculative in a
high degree. Such bonds are often in default or have other marked shortcomings.
Those securities in the A and Baa groups which Moody's believes possess
the strongest investment attributes are designated by the symbols A-1 and Baa-1.
Other A and Baa securities comprise the balance of their respective groups.
These rankings (1) designate the securities which offer the maximum in security
within their quality groups, (2) designate securities which can be bought for
possible upgrading in quality, and (3) additionally afford the investor an
opportunity to gauge more precisely the relative attractiveness of offerings in
the marketplace.
STANDARD & POOR'S CORPORATION
AAA: Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in a small degree.
A: Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Although they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to pay interest and repay principal
for bonds in this category than for bonds in higher rated categories. Bonds
rated BBB are regarded as having speculation characteristics.
BB--B--CCC-CC: Bonds rated BB, B, CCC, and CC are regarded, on balance,
as predominantly speculative with respect to the issuer's capacity to pay
interest and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation among such bonds and CC the highest
degree of speculation. Although such bonds will likely have some quality and
protective characteristics, these are outweighed by large uncertainties or major
risk exposures to adverse conditions.
COMMERCIAL PAPER RATINGS
STANDARD & POOR'S CORPORATION
Commercial paper ratings are graded into four categories, ranging from
"A" for the highest quality obligations to "D" for the lowest. Issues assigned
the A rating are regarded as having the greatest capacity for timely payment.
Issues in this category are further refined with the designation 1, 2 and 3 to
indicate the relative degree of safety. The "A-l" designation indicates that
the degree of safety regarding timely payment is very strong. Those issues
A-2
<PAGE>
determined to possess overwhelming safety characteristics will be denoted with a
plus sign designation.
MOODY'S INVESTORS SERVICE, INC.
Moody's commercial paper ratings are opinions of the ability of the
issuers to repay punctually promissory obligations not having an original
maturity in excess of nine months. Moody's makes no representation that such
obligations are exempt from registration under the Securities Act of 1933, nor
does it represent that any specific note is a valid obligation of a rated issuer
or issued in conformity with any applicable law. Moody's employs the following
three designations, all judged to be investment grade, to indicate the relative
repayment capacity of rated issuers:
Prime-1 Superior capacity for repayment
Prime-2 Strong capacity for repayment
Prime-3 Acceptable capacity for repayment
A-3
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(1) Included in Part A: Financial Highlights
(2) Incorporated by reference in Part B:
A. Weitz Partners, Inc. - Partners Value Fund
Accountant's Report dated January 19, 1996.
Statement of Assets and Liabilities.
Statement of Operations.
Statement of Changes in Net Assets.
Financial Highlights.
Notes to Financial Statements.
(3) Included in Part C:
A. Consent of KPMG Peat Marwick, LLP
(b) Exhibits
Exhibit No. Description
----------- -----------
(*)1. Articles of Incorporation
(*)2. Bylaws
2.(a) Amendment to the Bylaws
5. Management and Investment Advisory Agreement-
Partners Value Fund
(*)6. Distribution Agreement
(*)8. Custodian Agreement
(*)9. Administration Agreement
(*)(*)10. Opinion and Consent of Messrs. Cline, Williams,
Wright, Johnson & Oldfather (with respect to the
Partners Value Fund)
(*)13. Subscription Agreement of Wallace R. Weitz
<PAGE>
14. Prototype Individual Retirement Account
16. Schedule of Computation for Performance Quotations
(*) Incorporated by reference to Fund's Registration Statement on Form N-1A
filed July 29, 1993.
(*)(*) Incorporated by reference to Fund's Pre-Effective Amendment No.1 on Form
N-1A filed October 30, 1993.
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
None
Item 26. NUMBER OF HOLDERS OF SECURITIES
Title of Class Number of Record Holders
-------------- ------------------------
Partners Value Fund 292 as of March 31, 1996
Item 27. INDEMNIFICATION
Section 21-2004(15) of the Nebraska Business Corporation Act allows
indemnification of officers and directors of the Registrant under circumstances
set forth therein. The Registrant has made such indemnification mandatory.
Reference is made to Article 8.d. of the Articles of Incorporation (Exhibit 1),
Article XIII of the Bylaws of Registrant (Exhibit 2).
The general effect of such provisions is to require indemnification of
persons who are in an official capacity with the corporation against judgments,
penalties, fines and reasonable expenses including attorneys' fees incurred by
said person if: (1) the person has not been indemnified by another organization
for the same judgments, penalties, fines and expenses for the same acts or
omissions; (2) the person acted in good faith; (3) the person received no
improper personal benefit; (4) in the case of a criminal proceeding, the person
had no reasonable cause to believe the conduct was unlawful; and (5) in the case
of directors and officers and employees of the corporation, such persons
reasonably believed that the conduct was in the best interests of the
corporation, or in the case of directors, officers, or employees serving at the
request of the corporation for another organization, such person reasonably
believed that the conduct was not opposed to the best interests of the
corporation. A corporation is permitted to maintain insurance on behalf of any
officer, director, employee or agent of the corporation, or any person serving
as such at the request of the corporation, against any liability of such person.
Nevertheless, Article 8.d. of the Articles of Incorporation prohibits any
indemnification which would be in violation of Section 17(h) of the Investment
Company Act of 1940, as now enacted or hereafter amended and Article XIII of the
Fund's Bylaws prohibit any indemnification inconsistent with the guidelines set
forth in Investment Company Act Releases No. 7221 (June 9, 1972) and No. 11330
(September 2, 1980). Such Releases prohibit indemnification in cases involving
willful misfeasance, bad faith, gross negligence and reckless disregard of duty
and establish procedures for the determination of entitlement to indemnification
and expense advances.
S-2
<PAGE>
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification by the Registrant is against public policy as expressed in
the Act and, therefore, may be unenforceable. In the event that a claim for
such indemnification (except insofar as it provides for the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
against the Registrant by such director, officer or controlling person and the
Securities and Exchange Commission is still of the same opinion, 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 of whether or not such indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
In addition to the indemnification provisions contained in the
Registrant's Articles and Bylaws, there are also indemnification and hold
harmless provisions contained in the Investment Advisory Agreement, Distribution
Agreement, Administration Agreement and Custodian Agreement. Finally, the
Registrant has also included in its Articles of Incorporation (See Article X of
the Articles of Incorporation (Exhibit 1)) a provision which eliminates the
liability of outside directors to monetary damages for breach of fiduciary duty
of such directors. Pursuant to NEB. REV. STAT. Section 21-2035(2), such
limitation of liability does not eliminate or limit liability of such directors
for any act or omission not in good faith which involves intentional misconduct
or a knowing violation of law, any transaction from which such director derived
an improper direct or indirect financial benefit, for paying a divided or
approving a stock repurchase which was in violation of the Nebraska Business
Corporation Act and for any act or omission which violates a declaratory or
injunctive order obtained by the Registrant or its shareholders.
S-3
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
<TABLE>
<CAPTION>
Principal Occupations
Positions with (Present and for
Name Advisor Past Two Years
---- ------- --------------
<S> <C> <C>
Wallace R. Weitz President, Treasurer See caption "Management" in
and Director the Statement of Additional
Information forming a part of
this Registration Statement
Barbara Weitz Secretary and Faculty Member, University of
Director Nebraska at Omaha since 1986
Mary K. Beerling Vice President See caption "Management" in
and Assistant Secretary the Statement of Additional
Information forming a part of
this Registration Statement
Linda L. Lawson Vice President See caption "Management" in
the Statement of Additional
Information forming a part of
this Registration Statement
Richard F. Lawson Vice President See caption "Management" in
the Statement of Additional
Information forming a part of
this Registration Statement
</TABLE>
Item 29. PRINCIPAL UNDERWRITERS
(a) The Distributor is also the principal underwriter and distributor of
Weitz Series Fund, Inc., a registered investment management company
also advised by Wallace R. Weitz & Company.
S-4
<PAGE>
(b)
<TABLE>
<CAPTION>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
---------------- ----------- ----------
<S> <C> <C>
Wallace R. Weitz President, Treasurer President, Treasurer, and
Suite 600 and Director Director
1125 South 103 Street
Omaha, NE 68124-6008
Mary K. Beerling Vice President Vice President and Secretary
Suite 600 and Secretary
1125 South 103 Street
Omaha, NE 68124-6008
Richard F. Lawson Vice President, Vice President
Suite 600 Director
1125 South 103 Street
Omaha, NE 68124-6008
</TABLE>
(c) Not applicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All required accounts, books and records will be maintained by Wallace R.
Weitz & Company, Suite 600, 1125 South 103 Street, Omaha, Nebraska 68124-6008.
Item 31. MANAGEMENT SERVICES
Not applicable.
Item 32. UNDERTAKINGS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned Registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
The Registrant undertakes to call a meeting of shareholders for the
purpose of voting upon the question of removal of a director or directors, if
requested to do so by at least 10% of the Registrant's outstanding shares and in
so doing assist in communications with shareholders consistent with the
requirement of Section 16(c) of the Investment Company Act of 1940.
S-5
<PAGE>
KPMG Peat Marwick LLP
Two Central Park Plaza
Suite 1501
Omaha, NE 68102
ACCOUNTANT'S CONSENT
The Board of Directors
Weitz Partners Value Fund:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the headings "Financial Highlights" in the
Prospectus and "Other Services" in the Statement of Additional Information.
/s/ KPMG PEAT MARWICK LLP
Omaha, Nebraska
April 15, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement on Form N-1A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Omaha, State of Nebraska,
on the 19th day of April, 1996. By execution hereof, the undersigned hereby
certifies that this Post-Effective Amendment meets all the requirements for
effectiveness under Rule 485(b) of the Securities Act of 1933.
WEITZ PARTNERS, INC.
By: /s/ Wallace R. Weitz
-----------------------------
Wallace R. Weitz, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement on Form N-1A has been signed below by the
following persons in the capacities indicated on April 19, 1996:
SIGNATURE TITLE
/s/ Wallace R. Weitz President, Principal Executive Officer,
- ------------------------------- Principal Financial and Accounting Officer
Wallace R. Weitz and Director
/s/ Carroll E. Fredrickson Director
- -------------------------------
Carroll E. Fredrickson by /s/ Wallace R. Weitz
----------------------------
Wallace R. Weitz
Attorney-in-Fact
/s/ John W. Hancock Director
- -------------------------------
John W. Hancock
/s/ Thomas R. Pansing, Jr. Director
- -------------------------------
Thomas R. Pansing, Jr.
/s/Richard D. Holland Director
- --------------------------------
Richard D. Holland
S-6
<PAGE>
EXHIBITS
TO
WEITZ PARTNERS, INC.
POST-EFFECTIVE AMENDMENT NUMBER 3
TO
FORM N-1A
as filed on APRIL 19, 1996
<PAGE>
EXHIBITS
Exhibit No. Description Page
----------- ----------- ----
5. Management and Investment Advisory Agreement
Partners Value Fund
14. Prototype Individual Retirement Account
16. Schedule of Computation for Performance Quotations
<PAGE>
EXHIBIT 5
INVESTMENT ADVISORY AGREEMENT - PARTNERS VALUE
<PAGE>
MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
This amended and restated Agreement dated February 2, 1996 amends and
restates the Agreement dated October 12, 1993 between WEITZ PARTNERS, INC., a
Nebraska corporation (hereinafter called "Fund") and WALLACE R. WEITZ & COMPANY,
a Nebraska corporation (hereinafter called "Adviser");
In consideration of the mutual covenants herein contained, the parties
hereto agree as follows:
1. APPOINTMENT OF INVESTMENT ADVISER
The Fund hereby appoints the Adviser to manage the investment and
reinvestment of assets of the Partners Value Fund and any other Portfolio of the
Fund which may be hereafter designated as a separate series, subject to the
supervision of the Board of Directors of the Fund for the period and on the
terms set forth herein. The Adviser hereby accepts such appointment and agrees
during such period, at its own expense, to render the services and to assume the
obligations herein set forth, for the compensation herein provided. The Adviser
shall not be liable to the Fund for any act or omission by the Adviser or for
any losses sustained by the Fund or its shareholders except in the case of
willful misfeasance, bad faith, gross negligence or reckless disregard of duty.
2. DUTIES AND EXPENSES OF ADVISER AND FUND
(a) The Fund shall, at all times, inform Adviser as to the securities
held by it, the funds available or to become available for investment by it, and
otherwise as to the condition of its affairs.
(b) Adviser shall furnish to the Fund, at the regular executive offices
of the Fund, advice and recommendations with respect to the purchase and sale of
securities and investments and the making of commitments and shall place at the
disposal of the Fund such statistical, research, analytical and
<PAGE>
technical services, information and reports as may reasonably be required. The
Adviser shall also pay or reimburse the Fund for the compensation, if any, of
the officers of the Fund.
The officers of the Fund or the Adviser shall use their best efforts to
obtain the most favorable execution available from brokers or dealers in
purchasing and selling securities. In so doing, such officers may consider such
factors which they may deem relevant to the Fund's best interest, such as price,
the size of the transaction, the nature of the market for the security, the
amount of commission, the timing of the transaction taking into account market
prices and trends, the reputation, experience and financial stability of the
broker-dealer involved and the quality of service rendered by the broker-dealer
in other transactions. Subject to the foregoing considerations, at the Fund's
expense, such officers may place orders for the purchase or sale of portfolio
securities with brokers or dealers who have provided research, statistical or
other financial information and services to the Fund or the Adviser. Such
officers shall have discretionary authority to utilize broker-dealers who have
provided brokerage and research information of the type or nature referred to in
Section 28(e) of the Securities Exchange Act of 1934 to the Fund or the Adviser
even though it may result in the payment by the Fund of an amount of commission
for effecting a securities transaction in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction,
providing, however, that the Fund officers have determined in good faith that
such amount of commission was reasonable in relation to the value of the
brokerage and research services provided by the broker-dealer effecting the
transactions, viewed in terms of either that particular transaction or their
responsibilities with respect to the accounts for which said officers exercise
investment discretion.
(c) Except as otherwise expressly provided herein, the Fund shall pay
the following items:
-2-
<PAGE>
(1) the charges and expenses of any custodian or depository appointed
by the Fund for the safekeeping of its cash, securities and other
property;
(2) the charges and expenses of auditors for the Fund;
(3) the charges and expenses of any transfer agents and registrars
appointed by the Fund;
(4) broker's commissions and issue and transfer taxes chargeable to
the Fund in connection with securities transactions to which the Fund is
a party;
(5) all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies;
(6) the cost of stock certificates representing shares of the Fund;
(7) compensation of the directors of the Fund (other than directors
who are officers of the Adviser), and all expenses of Fund shareholders'
and directors' meetings and of preparing, printing and mailing reports to
shareholders of the Fund;
(8) charges and expenses of legal counsel for the Fund in connection
with legal matters relating to the Fund, including without limitation,
legal services rendered in connection with the Fund's corporate
existence, corporate and financial structure, relations with its
stockholders and the issuance of securities; and
(9) all other bookkeeping, administrative and operational costs,
charges and expenses of the Fund, without limitation.
3. FEES OF ADVISER
For the services to be furnished by the Adviser hereunder, the Fund
shall, commencing with the effective date of the first public offering of shares
of the Partners Value Fund, pay Adviser an
-3-
<PAGE>
annual fee equal to one percent (1%) of the average net asset value of the Fund
as ascertained on each business day and paid monthly. To the extent that
additional series of the Fund are added in the future, the Fund will pay the fee
as approved by the Board of Directors of the Fund which such fee shall be
described on an Exhibit 1 to this Agreement.
The compensation for the period from the effective date hereof to the
next succeeding last day of the month shall be prorated according to the
proportion which such period bears to the full month ending on such date, and
provided further that, upon any termination of this Agreement before the end of
any month, such compensation for the period from the end of the last month
ending prior to such termination to the date of termination, shall be prorated
according to the proportion which such period bears to a full month, and shall
be payable upon the date of termination. For the purpose of the Adviser's
compensation, the value of the Fund's net assets shall be computed in the manner
specified in its Articles of Incorporation or By-Laws in connection with the
determination of the net asset value of its shares.
4. INDEPENDENT CONTRACTOR
Adviser shall, for all purposes herein, be an independent contractor and
shall have no authority to act for or represent the Fund in its investment
commitments unless otherwise provided. No agreement, bid, offer, commitment,
contract or other engagement entered into by Adviser whether on behalf of
Adviser or whether purported to have been entered into on behalf of the Fund
shall be binding upon the Fund, and all acts authorized to be done by Adviser
under this Agreement shall be done by it as an independent contractor and not as
agent.
5. NON-EXCLUSIVE SERVICES OF ADVISER
Except to the extent necessary for performance of Adviser's obligations
hereunder, nothing
-4-
<PAGE>
shall restrict the right of Adviser or any of its directors, officers, or
employees who may be directors, officers or employees of the Fund to engage in
any other business or to devote time and attention to the management or other
aspects of any other business whether of a similar or dissimilar nature or to
render services of any kind to any other corporation, firm, individual or
association. The services of the Adviser to the Fund hereunder are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services hereunder be not impaired thereby.
6. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective on the effective date of the first
public offering of the Fund's shares, and shall continue in effect unless sooner
terminated as herein provided until December 31, 1995, and thereafter shall
continue in effect only if approved at least annually: (a) by the Board of
Directors of the Fund; or (b) by the vote of a majority of the outstanding
shares of the Fund (as defined in the Investment Company Act of 1940) and, in
addition, (c) by the vote of a majority of the directors of the Fund who are not
parties hereto nor interested persons of any party, as required by the
Investment Company Act of 1940, provided that the first such approval by
directors under (a) or (c) shall take place within thirty days prior to or after
December 31, 1995, and each subsequent annual approval shall take place within
thirty days prior to or after December 31 in each year thereafter, and if
approval made by the vote of shareholders, such approval shall be made at a
meeting held at any time in any calendar year, and each such approval whether
under (a) and (c) or under (b) and (c) shall be effective to continue such
contract for a period ending on the corresponding day of approval of the next
succeeding year.
This Agreement may be terminated at any time, without payment of any
penalty, by the Board of Directors of the Fund, or by a vote of a majority of
the outstanding voting securities of the
-5-
<PAGE>
Fund, in either case upon not less than sixty (60) days' written notice to
Adviser, and it may be terminated by Adviser upon sixty (60) days' written
notice to the Fund.
7. ASSIGNMENT OF AGREEMENT PROHIBITED
This Agreement will automatically be terminated in the event of its
assignment. It may not be transferred, assigned, sold, or in any manner
hypothecated or pledged; nor may any new agreement become effective without the
affirmative vote of a majority of those directors of the Fund who are not
parties to such Agreement or interested persons of any such party, and ratified
by a vote of the majority of the outstanding voting securities of the Fund,
provided that this limitation shall not prevent any minor amendments to the
Agreement which may be required by federal or state regulatory bodies.
8. INTERESTED PERSONS
It is understood that directors, officers, agents and stockholders of the
Fund are or may be interested in the Adviser (or any successor thereof) as
directors, officers, agents, stockholders or otherwise; that directors,
officers, agents, and stockholders of the Adviser are or may be interested in
the Fund as directors, officers, agents, stockholders or otherwise; and that the
Adviser (or any such successor) is or may be interested in the Fund as
stockholder or otherwise.
9. DEFINITIONS
For the purpose of the Agreement, the terms "vote of a majority of the
outstanding voting securities," "assignment," "affiliated person" and
"interested person" shall have the respective meanings specified in the
Investment Company Act of 1940 as now or hereafter in effect.
10. PROPRIETARY INTEREST OF ADVISER
The parties hereto acknowledge and agree that the name "Weitz" is
proprietary to and the
-6-
<PAGE>
sole and exclusive property of the Adviser. Adviser hereby licenses the use of
the name "Weitz" to the Fund for a term concurrent with the term of this
Agreement. From and after a date which is one hundred eighty (180) days after
the termination of this Agreement, Fund shall not do business under any name
containing the word "Weitz" without the prior written consent of Adviser.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their proper officers and their corporate seals to be hereunto
affixed, all as of the day and year first above written.
WEITZ PARTNERS, INC.
By /s/ Wallace R. Weitz
-----------------------------------------
President
Attest /s/ Mary K. Beerling
-------------------------------------
Secretary
WALLACE R. WEITZ & COMPANY
By /s/ Wallace R. Weitz
-----------------------------------------
President
Attest /s/ Mary K. Beerling
-------------------------------------
Assistant Secretary
-7-
<PAGE>
EXHIBIT 14
PROTOTYPE INDIVIDUAL RETIREMENT ACCOUNT
<PAGE>
INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
The Depositor whose name appears on the Application is establishing an
Individual Retirement Account under Section 408(a) to provide for his or
her retirement and for the support of his or her beneficiaries after
death.
The Custodian named on the Application has given the Depositor the
disclosure statement required under Regulations Section 1.408-6.
The Depositor has assigned the trust the sum indicated on the
Application.
The Depositor and the Custodian make the following agreement:
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3) or an employer contribution to a Simplified
Employee Pension Plan as described in Section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in Section 402(a)(5),
402(a)(6), 402(a)(7), 403 (a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a Simplified Employee Pension Plan described in Section 408(k).
ARTICLE II
The Depositor's interest in the balance in the Custodial account is
nonforfeitable.
ARTICLE III
1. No part of the Custodial funds may be invested in life insurance
contracts, nor may the assets of the Custodial account be commingled with
other property except in a common trust fund or common investment fund
(within the meaning of Section 408(a)(5)).
2. No part of the Custodial funds may be invested in collectibles (within
the meaning of Section 408(m)) except as otherwise permitted by Section
408(m)(3) which provides an exception for certain gold and silver coins
and coins issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the Custodial account shall
be made in accordance with the following requirements and shall otherwise
comply with Section 408(a)(6) and Proposed Regulations Section 1.408-8,
including the incidental death benefit provisions of Proposed Regulations
Section 1.401(a)(9)-2, the provisions of which are herein incorporated by
reference.
2. Unless otherwise elected by the time distributions are required to begin
to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be irrevocable as to
the Depositor and the surviving spouse and
1
<PAGE>
shall apply to all subsequent years. The life expectancy of a nonspouse
beneficiary may not be recalculated.
3. The Depositor's entire interest in the Custodial account must be, or
begin to be, distributed by the Depositor's required beginning date
(April 1 following the calendar year end in which the Depositor reaches
age 70 1/2). By that date, the Depositor may elect, in a manner
acceptable to the Custodian, to have the balance in the Custodial account
distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the life of the
Depositor.
(c) An annuity contract that provides equal or substantially equal
monthly, quarterly, or annual payments over the joint and last
survivor lives of the Depositor and his or her designated
beneficiary.
(d) Equal or substantially equal annual payments over a specified
period that may not be longer than the Depositor's life
expectancy.
(e) Equal or substantially equal annual payments over a specified
period that may not be longer than the joint life and last
survivor expectancy of the Depositor and his or her designated
beneficiary.
4. If the Depositor dies before his or her entire interest is distributed to
him or her, the entire remaining interest will be distributed as follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in
accordance with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election
of the beneficiary or beneficiaries, either
(i) Be distributed by the December 31 of the year containing
the fifth anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments
over the life or life expectancy of the designated
beneficiary or beneficiaries starting by December 31 of the
year following the year of the Depositor's death. If,
however, the beneficiary is the Depositor's surviving
spouse, then this distribution is not required to begin
before December 31 of the year in which the Depositor would
have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun
on the Depositor's required beginning date, even though payments
may actually have been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving
spouse, no additional cash contributions or rollover contributions
may be accepted in the account.
5. In the case of a distribution over life expectancy in equal or
substantially equal annual
2
<PAGE>
payments, to determine the minimum annual payment for each year, divide
the Depositor's entire interest in the Custodial Account as of the close
of business on December 31 of the preceding year by the life expectancy
of the Depositor (or the joint life and last survivor expectancy of the
Depositor and the Depositor's designated beneficiary, or the life
expectancy of the designated beneficiary, whichever applies). In the
case of distributions under paragraph 3, determine the initial life
expectancy (or joint life and last survivor expectancy) using the
attained ages of the Depositor and designated beneficiary as of their
birthdays in the year the Depositor reaches age 70 1/2. In the case of
a distribution in accordance with paragraph 4(b)(ii), determine life
expectancy using the attained age of the designated beneficiary as of
the beneficiary's birthday in the year distributions are required to
commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to
satisfy the minimum distribution requirements described above. This
method permits an individual to satisfy these requirements by taking
from one individual retirement account the amount required to satisfy
the requirement for another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under Section 408(i)
and Regulations Sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor as prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with Section 408(a) and related
regulations will be invalid.
ARTICLE VII
This Agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signatures appear on the Application.
ARTICLE VIII
8.01 Definitions: In this part of this Agreement (Article VIII), the words
"you" and "your" mean the Depositor, the words "we," "us" and "our" mean
the Custodian and "Code" means the Internal Revenue Code.
8.02 Notices and Change of Address: Any required notice regarding this IRA
will be considered effective when we mail it to the last address of the
intended recipient which we have in our records. Any notice to be given
to us will be considered effective when we actually receive it. You must
notify us of any change of address.
8.03 Representations and Responsibilities: You represent and warrant to us
that any information you have given or will give us with respect to this
Agreement is complete and accurate. Further, you agree that any
directions you give us, or action you take
3
<PAGE>
will be proper under this Agreement and that we are entitled to rely upon
any such information or directions. We shall not be responsible for
losses of any kind that may result from your directions to us or your
actions or failures to act and you agree to reimburse us for any loss we
may incur as a result of such directions, actions or failures to act. We
shall not be responsible for any penalties, taxes, judgments or expenses
you incur in connection with your IRA. We have no duty to determine
whether your contributions or distributions comply with the Code,
regulations, rulings or this Agreement.
8.04 Service Fees: We have the right to charge an annual service fee or other
designated fees (for example, a transfer, rollover or termination fee)
for maintaining your IRA. In addition, we have the right to be
reimbursed for all reasonable expenses we incur in connection with the
administration of your IRA. We may charge you separately for any fees or
expenses or we may deduct the amount of the fees or expenses from the
assets in your IRA at our discretion. We reserve the right to charge any
additional fee upon 30 days notice to you that the fee will be effective.
Any brokerage commissions attributable to the assets in your IRA will be
charged to your IRA. You cannot reimburse your IRA for those
commissions.
8.05 Investment of Amounts in the IRA:
a. Direction of Investment - You have exclusive responsibility for
and control over the investment of the assets of your IRA. You
shall direct all investment transactions, including earnings and
the proceeds from securities sales. Your selection of
investments, however, shall be limited to publicly traded
securities, mutual funds, money market instruments and other
investments that are obtainable by us and that we are capable of
holding in the ordinary course of our business.
In the absence of instructions from you or if your instructions
are not in a form acceptable to us, we shall hold any uninvested
amounts in cash and we shall have no responsibility to invest
uninvested cash unless and until directed by you.
All transactions shall be subject to any and all applicable
Federal and State laws and regulations and the rules, regulations,
customs and usages of any exchange, market or clearing house where
the transaction is executed and to our policies and practices.
After your death, your beneficiary(ies) shall have the right to
direct the investment of your IRA assets, subject to the same
conditions that applied to you during your lifetime under this
Agreement (including, without limitation, Section 8.03).
b. Our Investment Powers and Duties - We shall have no discretion to
direct any investment in your IRA. We assume no responsibility
for rendering investment advice with respect to your IRA, nor will
we offer any opinion or judgment to you on matters concerning the
value or suitability of any investment or proposed investment for
your IRA. We shall exercise the voting
4
<PAGE>
rights and other shareholder rights with respect to securities in
your IRA but only in accordance with the instructions you give to
us.
c. Delegation of Investment Responsibility - We may, but are not
required to, permit you to delegate your investment responsibility
for your IRA to another party acceptable to us by giving written
notice of your delegation in a format we prescribe. We shall
follow the direction of any such party who is properly appointed
and we shall be under no duty to review or question, nor shall we
be responsible for, any of that party's directions, actions or
failures to act.
8.06 Beneficiaries: If you die before you receive all of the amounts in your
IRA, payments from your IRA will be made to your beneficiaries.
You may designate one or more person or entity as beneficiary of your
IRA. This designation can only be made on a form prescribed by us and it
will only be effective when it is filed with us during your lifetime.
Each beneficiary designation you file with us will cancel all previous
ones. The consent of a beneficiary shall not be required for you to
revoke a beneficiary designation. If you do not designate a beneficiary,
your estate will be the beneficiary.
If the beneficiary payment election described in Article IV, Section 4(b)
of this Agreement is not made by December 31 of the year following the
year of your death, the following rules apply. If the beneficiary is
your spouse, the payment described in Article IV, Section 4(b)(ii) will
be deemed elected (that is, payments over the life or life expectancy of
your spouse). If the beneficiary or beneficiaries are or include anyone
other than your surviving spouse, the payment method described in Article
IV, Section 4(b)(i) will be deemed elected (that is the 5 year rule).
8.07 Termination: Either party may terminate this Agreement at any time by
giving written notice to the other. We can resign as Custodian at any
time effective 30 days after we mail written notice of our resignation to
you. Upon receipt of that notice, you must make arrangements to transfer
your IRA to another financial organization. If you do not complete a
transfer of your IRA within 30 days from the date we mail the notice to
you, we have the right to transfer your IRA assets to a successor IRA
custodian or trustee that we choose in our sole discretion or we may pay
your IRA to you in a single sum. We shall not be liable for any actions
or failures to act on the part of any successor custodian or trustee nor
for any tax consequences you may incur that result from the transfer or
distribution of your assets pursuant to this section.
If this Agreement is terminated, we may hold back from your IRA a
reasonable amount of money that we believe is necessary to cover any one
or more of the following:
* any fees, expenses or taxes chargeable against your IRA;
* any penalties associated with the early withdrawal of any savings
instrument or other investment in your IRA.
If our organization is merged with another organization (or comes under
the control of any Federal or State agency) or if our entire organization
(or any portion which
5
<PAGE>
includes your IRA) is bought by another organization, that organization
(or agency) shall automatically become the custodian or trustee of your
IRA, but only if it is the type of organization authorized to serve as an
IRA custodian or trustee.
If we are required to comply with Section 1.401-12(n) of the Treasury
Regulations and we fail to do so, or we are not keeping the records,
making the returns or sending the statements as are required by forms or
regulations, the IRS may, after notifying you, require you to substitute
another custodian or trustee.
8.08 Amendments: We have the right to amend this Agreement at any time. Any
amendment we make to comply with the Code and related regulations does
not require your consent. You will be deemed to have consented to any
other amendment unless, within 30 days from the date we mail the
amendment, you notify us in writing that you do not consent.
8.09 Withdrawals: All requests for withdrawal shall be in writing on a form
provided by or acceptable to us. The method of distribution must be
specified in writing. The tax identification number of the recipient
must be provided to us before we are obligated to make a distribution.
Any withdrawals shall be subject to all applicable tax and other laws and
regulations including possible early withdrawal penalties and withholding
requirements.
8.10 Required Minimum Distributions: We reserve the right to elect whether or
not life expectancies will be recalculated in connection with required
minimum distributions from your IRA, provided, however, that we give you
notice of our election. Alternatively, we may allow you to make such an
election.
As described in Article IV, Section 3, of this Agreement, you may make an
election to begin receiving payments from your IRA in a manner that
satisfies the required minimum distribution rules no later than April 1st
of the year following the year you reach age 70 1/2 . (This is called
the "required beginning date.") If you fail to make such an election by
your required beginning date, we can, at our complete and sole
discretion, do any one of the following:
* make no payment until you give us a proper payment request;
* pay your entire IRA to you in a single sum payment; or
* calculate your required minimum distribution from your IRA each
year based on your single life expectancy (not recalculated) and
pay those distributions to you until you direct otherwise.
We will not be liable for any penalties or taxes related to your failure
to take a distribution.
8.11 Transfers From Other Plans: We can receive amounts transferred to this
IRA from the custodian or trustee of another IRA. In addition, we can
accept direct rollovers of eligible rollover distributions from employer
plans as permitted by the Code. We reserve the right not to accept any
transfer or direct rollover.
6
<PAGE>
8.12 Liquidation of Assets: We have the right to liquidate assets in your IRA
if necessary to make distributions or to pay fees, expenses or taxes
properly chargeable against your IRA. If you fail to direct us as to
which assets to liquidate, we will decide in our complete and sole
discretion and you agree not to hold us liable for any adverse
consequences that result from our decision.
8.13 Restrictions On The Fund: Neither you nor any beneficiary may sell,
transfer or pledge any interest in your IRA in any manner whatsoever,
except as provided by law or this Agreement.
The assets in your IRA shall not be responsible for the debts, contracts
or torts of any person entitled to distributions under this Agreement.
8.14 What Law Applies: This Agreement is subject to all applicable Federal
and State laws and regulations. If it is necessary to apply any State
law to interpret and administer this Agreement, the law of our domicile
shall govern.
If any part of this Agreement is held to be illegal or invalid, the
remaining parts shall not be affected. Neither your nor our failure to
enforce at any time or for any period of time any of the provisions of
this Agreement shall be construed as a waiver of such provisions, or your
right or our right thereafter to enforce each and every such provision.
INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
Form 5305-A is a model Custodial account agreement that meets the requirements
of Section 408(a) and has been automatically approved by the IRS. An individual
retirement account (IRA) is established after the form is fully executed by both
the individual (Depositor) and the Custodian and must be completed no later than
the due date of the individual's income tax return for the tax year (without
regard to extensions). This account must be created in the United States for
the exclusive benefit of the Depositor or his or her Beneficiaries.
Individuals may rely on regulations for Tax Reform Act of 1986 to the extent
specified in those regulations.
Do not file Form 5305-A with the IRS. Instead, keep it for your records.
For more information on IRAs, including the required disclosure you can get from
your Custodian, get Pub. 590, Individual Retirement Arrangements (IRAs).
DEFINITIONS
Custodian: The Custodian must be a bank or savings and loan association, as
defined in Section 408(n), or other person who has the approval of the IRS to
act as Custodian.
Depositor: The Depositor is the person who establishes the Custodial account.
7
<PAGE>
IDENTIFYING NUMBER
The Depositor's social security number will serve as the identification number
of his or her IRA. An employer identification number is required only for an
IRA for which a return is filed to report unrelated business taxable income. An
employer identification number is required for a common fund created for IRAs.
IRA FOR NON-WORKING SPOUSE
Form 5305-A may be used to establish the IRA Custodial account for a nonworking
spouse.
Contributions to an IRA Custodial account for a nonworking spouse must be made
to a separate IRA Custodial account established by the nonworking spouse.
SPECIFIC INSTRUCTIONS
Article IV: Distributions made under this Article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 70 1/2 to ensure that the
requirements of Section 408(a)(6) have been met.
Article VIII: Article VIII and any that follow it may incorporate additional
provisions that are agreed upon by the Depositor and Custodian to complete the
Agreement. They may include, for example, definitions, investment powers, voting
rights, exculpatory provisions, amendment and termination, removal of Custodian,
Custodian's fees, State law requirements, beginning date of distributions,
accepting only cash, treatment of excess contributions, prohibited transactions
with the Depositor, etc. Use additional pages if necessary and attach them to
this form.
NOTE: Form 5305-A may be reproduced and reduced in size for adoption to
passbook purposes.
DISCLOSURE STATEMENT
RIGHT TO REVOKE YOUR IRA
If you receive this Disclosure Statement at the time you establish your IRA, you
have the right to revoke your IRA within seven (7) days of its establishment.
If revoked, you are entitled to a full return of the contribution you made to
your IRA. The amount returned to you would not include an adjustment for such
items as sales commissions, administrative expenses, or fluctuation in market
value. You may make this revocation only by mailing or delivering a written
notice to the Custodian at the address listed on the Application.
If you send your notice by first class mail, your revocation will be deemed
mailed as of the date of the postmark.
If you have any questions about the procedure for revoking your IRA, please call
the Custodian at the telephone number listed on the Application.
REQUIREMENTS OF AN IRA
8
<PAGE>
A. CASH CONTRIBUTIONS - Your contribution must be in cash, unless it is a
rollover contribution.
B. MAXIMUM CONTRIBUTION - The total amount you may contribute to an IRA for
any taxable year cannot exceed the lesser of $2,000 or 100 percent of
your compensation.
C. NONFORFEITABILITY - Your interest in your IRA is nonforfeitable.
D. ELIGIBLE CUSTODIANS - The Custodian of your IRA must be a bank, savings
and loan association, credit union, or a person approved by the Secretary
of the Treasury.
E. COMMINGLING ASSETS - The assets of your IRA cannot be commingled with
other property except in a common trust fund or common investment fund.
F. LIFE INSURANCE - No portion of your IRA may be invested in life insurance
contracts.
G. COLLECTIBLES - You may not invest the assets of your IRA in collectibles
(within the meaning of Internal Revenue Code (IRC) Section 408(m)). A
collectible is defined as any work of art, rug or antique, metal or gem,
stamp or coin, alcoholic beverage, or any other tangible personal
property specified by the Internal Revenue Service. Specially minted
United States gold and silver bullion coins and certain state-issued
coins are permissible IRA investments.
H. REQUIRED MINIMUM DISTRIBUTIONS - You are required to take minimum
distributions from your IRA at certain times in accordance with Proposed
Treasury Regulations Section 1.408-8. Below is a summary of the IRA
distribution rules.
1. You are required to take a minimum distribution from your IRA for the
year in which you reach age 70 1/2 and for each year thereafter. You
must take your first payout by your required beginning date, April 1 of
the year following the year you attain age 70 1/2 . The minimum
distribution for any taxable year is equal to the amount obtained by
dividing the account balance at the end of the prior year (less any
required distribution taken between January 1 and April 1 of the year
following the year you attain age 70 1/2) by the joint life expectancy of
you and your designated beneficiary. If you have not designated a
beneficiary for your IRA by your required beginning date, your single
life expectancy will be used.
2. Your single or joint life expectancy is determined by using the IRS
unisex life expectancy tables. You can find these tables in Treasury
Regulations Section 1.72-9.
We may establish a policy dictating whether or not life expectancies may
be recalculated in determining required minimum distributions from your
IRA. Alternatively, we may allow you to elect whether or not to
recalculate your life expectancies.
You may choose (within the limits set forth in the distribution rules and
our life expectancy recalculation policy) how you want your required
minimum distributions
9
<PAGE>
structured. You must make your payment elections no later than April 1
following your 70 1/2 year. If you do not make an election by that date,
we may do any one of the following:
(a) make no payment until you give us a proper payout request,
(b) pay your entire IRA to you in a single sum payment, or
(c) determine your required minimum distribution each year based on
your single life expectancy (not recalculated) and pay those
distributions to you until you direct otherwise.
3. If you name someone other than your spouse as your beneficiary, and your
beneficiary is more than 10 years younger than you, your required minimum
distributions must satisfy the Minimum Distribution Incidental Benefit
(MDIB) rule. The MDIB rule generally requires that your required minimum
distributions be calculated as if your beneficiary were exactly 10 years
younger than you.
4. If you die,
(a) on or after your required beginning date, distributions must be
made to your beneficiary or beneficiaries at least as rapidly as
under the method being used to determine minimum distributions as
of the date of your death.
(b) before your required beginning date, the entire amount remaining
in your account will, at the election of your beneficiary or
beneficiaries, either
(i) be distributed by December 31 of the year containing the
fifth anniversary of your death, or
(ii) be distributed in equal or substantially equal payments
over the life or life expectancy of your designated
beneficiary or beneficiaries.
Your beneficiary or beneficiaries must elect either option (i) or (ii) by
December 31 of the year following the year of your death. If no election
is made, distribution will be made in accordance with (ii) if the
beneficiary is your surviving spouse, and in accordance with (i) if your
beneficiary is not your surviving spouse. In the case of distributions
under (ii), distributions must commence by December 31 of the year
following the year of your death. If your spouse is the beneficiary,
distributions need not commence until December 31 of the year you would
have attained age 70 1/2, if later.
INCOME TAX CONSEQUENCES OF ESTABLISHING AN IRA
A. IRA Deductibility - If you are under age 70 1/2 and have earned income
from services rendered, you may make an IRA contribution of the lesser of
100 percent of compensation or $2,000. However, the amount of the
contribution for which you may take a tax deduction will depend upon
whether you (or your spouse) are an active participant in an
employer-maintained retirement plan. If you (and your spouse) are not an
active participant, your IRA contribution will be totally deductible. If
you (or your spouse) are an active participant, the deductibility of your
contribution will depend on your adjusted gross income (AGI) for the tax
year for which the contribution was made. AGI is determined on your tax
return (disregarding any deductible IRA contribution).
10
<PAGE>
Definition of Active Participant - Generally, you will be an active
participant if you are covered by one or more of the following
employer-maintained retirement plans:
1. a qualified pension, profit sharing, or stock bonus plan;
2. a qualified annuity plan of an employer;
3. a simplified employee pension (SEP) plan;
4. a retirement plan established by the Federal government, a State,
or a political subdivision (except certain unfunded deferred
compensation plans under IRC Section 457);
5. a tax sheltered annuity for employees of certain tax-exempt
organizations or public schools; and
6. a qualified plan for self-employed individuals (H.R. 10 or Keogh
Plan).
If you do not know whether your employer maintains one of these plans or
whether you are an active participant in it, check with your employer and
your tax advisor. Also, the Form W-2 (Wage and Tax Statement) that you
receive at the end of the year from your employer will indicate whether
you are an active participant.
If you are single, your threshold AGI level is $25,000. The threshold
level if you are married and file a joint tax return is $40,000, and if
you are married but file a separate tax return, the threshold level is
$0. If your AGI is less than $10,000 above your threshold level, you
will still be able to make a deductible contribution but it may be
limited in amount (but never less than $200).
The deductible amount of your contribution is determined by taking your
threshold AGI level plus $10,000 (e.g., $50,000 if you are married and
filing jointly, $35,000 if you are single) and subtracting from it your
AGI (determined prior to taking your itemized deductions). Multiply the
resulting number by .2 (or .225 if you are making spousal contributions)
to give you your personal deduction limit. You must round up the
resulting number to the next highest $10 if the number is not a multiple
of 10.
B. TAX-DEFERRED EARNINGS - The investment earnings of your IRA are not
subject to federal income tax until distributions are made (or, in
certain instances, when distributions are deemed to be made).
C. NONDEDUCTIBLE CONTRIBUTIONS - You may make nondeductible contributions to
your IRA to the extent that deductible contributions are not allowed. The
sum of your deductible and nondeductible IRA contributions cannot exceed
your contribution limit (the lesser of $2,000 or 100 percent of
compensation). You may elect to treat deductible IRA contributions as
nondeductible contributions.
If you make nondeductible contributions for a particular tax year, you
must report the amount of the nondeductible contribution on your federal
income tax return (using IRS Form 8606).
If you overstate the amount of designated nondeductible contributions for
any taxable year, you are subject to a $100 penalty unless reasonable
cause for the overstatement can be shown. Failure to file any form
required by the IRS to report nondeductible contributions (e.g., IRS Form
8606) will result in a $50 per failure penalty.
11
<PAGE>
D. TAXATION OF DISTRIBUTIONS - The taxation of IRA distributions depends on
whether or not you have ever made nondeductible IRA contributions. If you
have only made deductible contributions, any IRA distribution will be
fully included in income.
If you have ever made nondeductible contributions to any IRA, the
following formula must be used to determine the amount of any IRA
distribution excluded from income:
(Aggregate Nondeductible Contributions)
x (Amount Withdrawn) = Amount Excluded From Income
---------------------------
Aggregate IRA Balance
NOTE: Aggregate nondeductible contributions include all nondeductible
contributions made by you through the end of the year of the distribution
(which have not previously been withdrawn and excluded from income). Also
note that aggregate IRA balance includes the total balance of all of your
IRAs as of the end of the year of distribution and any distributions
occurring during the year.
E. ROLLOVERS - Your IRA may be rolled over to an IRA of yours, or may
receive rollover contributions, provided that all of the applicable
rollover rules are followed. Rollover is a term used to describe a
tax-free movement of cash or other property to your IRA from any of your
IRAs, or from your employer's Qualified Retirement Plan or Tax Sheltered
Annuity. The rollover rules are generally summarized below. These
transactions are often complex. If you have any questions regarding a
rollover, please see a competent tax advisor.
1. IRA to IRA Rollovers - Funds distributed from your IRA may be
rolled over to an IRA of yours if the requirements of IRC Section
408(d)(3) are met. A proper IRA to IRA rollover is completed if
all or part of the distribution is rolled over not later than 60
days after the distribution is received. You may not have
completed another IRA to IRA rollover from the distributing IRA
during the 12 months preceding the date you receive the
distribution. Further, you may roll the same dollars or assets
only once every 12 months.
2. Qualified Plan (or Tax-Sheltered Annuity) to IRA Rollovers -
Effective for qualified plan distributions received after January
1, 1993, you may roll over, directly or indirectly, any eligible
rollover distribution. An eligible rollover distribution is
defined generally as any distribution from a qualified plan (other
than distributions to nonspouse beneficiaries) unless it is part
of certain series of substantially equal periodic payments,
after-tax dollars or a required minimum distribution.
To qualify as a rollover, your eligible rollover distribution must
be rolled over to your IRA not later than 60 days after you
receive it.
If you elect to receive your rollover distribution prior to
placing it in an IRA, thereby conducting an indirect rollover,
your plan administrator will generally be required to withhold 20
percent of your distribution as a prepayment of income taxes.
When completing the rollover, you may make up the amount withheld,
out of pocket, and roll over the full amount distributed from your
12
<PAGE>
qualified plan balance, if you so choose. Alternatively, you may
claim the withheld amount as income and pay the applicable income
tax and, if you are under age 59 1/2, the 10 percent early
distribution penalty (unless an exception to the penalty applies).
As an alternative to the indirect rollover, your employer
generally must give you the option of directly rolling your
qualified plan balance over to an IRA. If you elect the direct
rollover option, your eligible rollover distribution will be paid
directly to the IRA (or other qualified plan) that you designate.
The 20 percent withholding requirements do not apply to direct
rollovers.
If you place your rollover contribution in a separate (i.e.,
conduit) IRA plan which holds just those dollars, you preserve the
right to later roll the money originating from the qualified plan
into another qualified plan.
3. Written Election - At the time you make a proper rollover to an
IRA, you must designate to the Custodian, in writing, your
election to treat that contribution as a rollover. Once made, the
rollover election is irrevocable.
F. CARRYBACK CONTRIBUTIONS - A contribution is deemed to have been made on
the last day of the preceding taxable year if you make a contribution by
the deadline for filing your income tax return (not including
extensions), and you designate that contribution as a contribution for
the preceding taxable year. For example, if you are a calendar year
taxpayer and you make your IRA contribution on or before April 15, your
contribution is considered to have been made for the previous tax year if
you designated it as such.
LIMITATIONS AND RESTRICTIONS
A. SEP PLANS - Under a Simplified Employee Pension (SEP) Plan that meets the
requirements of IRC Section 408(k), your employer may make contributions
to your IRA. Your employer is required to provide you with information
which describes the terms of your employer's SEP Plan.
B. SPOUSAL IRA - If you are married, have compensation for a particular year
and your spouse has no compensation (or elects to be treated as having no
compensation) for the year, you may make payments to an IRA established
for the benefit of your spouse. Your spouse must not have attained age
70 1/2 in that year, or any prior year, even if you are age 70 1/2 or
older. You must file a joint tax return for the year for which the
contribution is made.
The amount you may contribute to your IRA and your spouse's IRA is the
lesser of $2,250 or 100 percent of your compensation. However, you may
not contribute more than $2,000 to any one IRA.
C. DEDUCTION OF ROLLOVERS AND TRANSFERS - A deduction is not allowed for
rollover or transfer contributions.
D. ESTATE TAX EXCLUSION - The $100,000 federal estate tax exclusion
previously available has been repealed for individuals dying after
12/31/84. No exclusion will be
13
<PAGE>
allowed for individuals dying after that date. Transfers of your IRA
assets to a named beneficiary made during your life and at your request
or because of your failure to instruct otherwise, may be subject to
federal gift tax under IRC Section 2501 if made after October 22, 1986.
E. SPECIAL TAX TREATMENT - Capital gains treatment and the favorable five or
ten year forward averaging tax authorized by IRC Section 402 do not apply
to IRA distributions.
F. INCOME TAX TREATMENT - Any withdrawal from your IRA, except a direct
transfer, is subject to federal income tax withholding. You may, however,
elect not to have withholding apply to your IRA withdrawal. If
withholding is applied to your withdrawal, not less than 10 percent of
the amount withdrawn must be withheld.
G. PROHIBITED TRANSACTIONS - If you or your beneficiary engage in a
prohibited transaction with your IRA, as described in IRC Section 4975,
your IRA will lose its tax-exempt status and you must include the value
of your account in your gross income for that taxable year.
H. PLEDGING - If you pledge any portion of your IRA as collateral for a
loan, the amount so pledged will be treated as a distribution and will be
included in your gross income for that year.
FEDERAL TAX PENALTIES
A. EARLY DISTRIBUTION PENALTY - If you are under age 59 1/2 and receive an
IRA distribution, an additional tax of 10 percent will apply, unless made
on account of death, disability, a qualifying rollover, a direct
transfer, the timely withdrawal of an excess contribution; or if the
distribution is part of a series of substantially equal periodic payments
(at least annual payments) made over your life expectancy or the joint
life expectancy of you and your beneficiary. This additional tax will
apply only to the portion of a distribution which is includible in your
income.
B. EXCESS CONTRIBUTION PENALTY - An excise tax of 6 percent is imposed upon
any excess contribution you make to your IRA. This tax will apply each
year in which an excess remains in your IRA. An excess contribution is
any contribution amount which exceeds your contribution limit, excluding
rollover and direct transfer amounts. Your contribution limit is the
lesser of $2,000 or 100 percent of your compensation for the taxable
year.
C. EXCESS ACCUMULATION PENALTY - One of the requirements listed above is
that you must take a minimum distribution for the year you attain age
70 1/2 and for each year thereafter and that your designated
beneficiary(ies) is required to take certain minimum distributions after
your death. An additional tax of 50 percent is imposed on the amount of
the required minimum distribution which should have been taken but was
not. This tax is referred to as an excess accumulation penalty tax.
D. EXCESS DISTRIBUTION PENALTY - You will be taxed an additional 15 percent
on any amount received and included in income during a calendar year from
qualified retirement plans, tax-sheltered annuities and IRAs which
exceeds $150,000
14
<PAGE>
($112,500, indexed each year for the cost of living, for individuals who
made the grandfather election). Certain exceptions may apply. If you
receive an excess distribution as described above, you should see your
tax advisor to determine if these exceptions apply to you. This tax is
referred to as an excess distribution penalty.
E. EXCESS RETIREMENT ACCUMULATION PENALTY - Your estate will have to pay
additional federal estate tax if you die with an excess retirement
accumulation. The increased estate tax will be equal to 15 percent of the
excess retirement accumulation. An excess retirement accumulation exists
if, at the time of your death, the value of all of your interests in
qualified plans, tax-sheltered annuities and IRAs exceeds the present
value of an annuity with annual payments of $150,000 ($112,500, indexed
each year for the cost of living, for individuals who made the
grandfather election) payable over your life expectancy immediately
before your death. This tax is referred to as an excess retirement
accumulation penalty.
F. PENALTY REPORTING - You must file Form 5329 with the Internal Revenue
Service to report and remit any penalties or excise taxes.
OTHER
A. IRS PLAN APPROVAL - The Agreement used to establish this IRA has been
approved by the Internal Revenue Service. The Internal Revenue Service
approval is a determination only as to form. It is not an endorsement of
the plan in operation or of the investments offered.
B. ADDITIONAL INFORMATION - You may obtain further information on IRAs from
your District Office of the Internal Revenue Service. In particular, you
may wish to obtain IRS Publication 590, Individual Retirement
Arrangements.
15
<PAGE>
EXHIBIT 16
SCHEDULE OF COMPUTATIONS OF PERFORMANCE QUOTATIONS
<PAGE>
Schedule 16
SCHEDULE OF COMPUTATIONS OF PERFORMANCE
PARTNERS VALUE FUND
The Total Return Information presented in the Prospectus and described in
the Statement of Additional Information for the Partners Value Fund and for the
Predecessor Fund was calculated as follows:
TOTAL RETURN:
P(1 + T) TO THE POWER OF n = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of a period, at the
end of the period
The computation of average annual return assumes dividends and
distributions are reinvested at net asset value (as stated in the prospectus) on
the reinvestment dates during the period.
The ending redeemable value assumes a complete redemption at the end of
the period.
Total return for the year ended December 31, 1995:
P = $1,000(initial value)
n = 1(1 year)
ERV = $1,387 (ending redeemable value)
Solve for T:
$1,000(1 + T) TO THE POWER OF n = 1,387
T = 38.7%
Total return for the period December 31, 1990, to period ended December
31, 1995:
P = $1,000(initial value)
n = 5(5 years)
ERV = $2,288(ending redeemable value)
Solve for T:
$1,000(1 + T) TO THE POWER OF n = 2,288
T = 18.0%
<PAGE>
Total return for the period December 31, 1985, to period ended December
31, 1995:
P = $1,000(initial value)
n = 10
ERV = $3,433(ending redeemable value)
Solve for T:
$1,000(1 + T) TO THE POWER OF n = 3,433
T = 13.1%
S-10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS INCLUDED IN THE COMPANY'S ANNUAL REPORT AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000910031
<NAME> WEITZ PARTNERS INC.
<SERIES>
<NUMBER> 1
<NAME> WEITZ PARTNERS VALUE FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 56,738,837
<INVESTMENTS-AT-VALUE> 73,956,296
<RECEIVABLES> 304,366
<ASSETS-OTHER> 10,495
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 74,271,157
<PAYABLE-FOR-SECURITIES> 406,733
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 83,536
<TOTAL-LIABILITIES> 490,269
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 54,680,448
<SHARES-COMMON-STOCK> 7,104,939
<SHARES-COMMON-PRIOR> 6,197,905
<ACCUMULATED-NII-CURRENT> 30,808
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,852,173
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,217,459
<NET-ASSETS> 73,780,888
<DIVIDEND-INCOME> 800,055
<INTEREST-INCOME> 543,641
<OTHER-INCOME> 0
<EXPENSES-NET> (813,440)
<NET-INVESTMENT-INCOME> 530,256
<REALIZED-GAINS-CURRENT> 7,145,678
<APPREC-INCREASE-CURRENT> 12,782,328
<NET-CHANGE-FROM-OPS> 20,458,262
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (885,603)
<DISTRIBUTIONS-OF-GAINS> (6,146,986)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 865,684
<NUMBER-OF-SHARES-REDEEMED> (562,886)
<SHARES-REINVESTED> 604,236
<NET-CHANGE-IN-ASSETS> 22,493,396
<ACCUMULATED-NII-PRIOR> 355,347
<ACCUMULATED-GAINS-PRIOR> 175,675
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 642,570
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 813,440
<AVERAGE-NET-ASSETS> 63,808,769
<PER-SHARE-NAV-BEGIN> 8.275
<PER-SHARE-NII> 0.084
<PER-SHARE-GAIN-APPREC> 3.108
<PER-SHARE-DIVIDEND> (0.137)
<PER-SHARE-DISTRIBUTIONS> (0.946)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.384
<EXPENSE-RATIO> 1.27
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
