<PAGE>
As filed with the Securities and Exchange Commission
on April 30, 1997
1933 Act Registration Number 33-66714
--------
1940 Act Registration Number 811-7918
--------
-------------------------------------------
-------------------------------------------
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. 4 /X/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 5 /X/
--------------------------------------------------------
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)
---------------------------------------------------------
Copies of all communications to:
PATRICK W.D. TURLEY, ESQ.
Dechert Price & Rhoads
1500 K Street, NW
Washington, DC 20005-1208
It is proposed that this filing will become effective April 30, 1997
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 filed a Rule 24f-2 Notice for the fiscal year ended
December 31, 1996, on or about February 28, 1997.
---------------------------------------------------------
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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............................. Fund Expenses
3. Condensed Financial Information...... Financial Highlights
4. General Description of
Registrant........................... Investment Management Information,
Management, Additional Information
5. Management of the Fund............... Management, Additional Information
5A. Management's Discussion of Fund
Performance.......................... Financial Highlights
6. Capital Stock and Other
Securities........................... Cover Page; Redeeming Shares;
Dividends, Distributions and Taxes;
Additional Information
7. Purchase of Securities Being
Offered.............................. Purchasing Shares; Exchanging
Shares, Pricing of Shares
8. Redemption or Repurchase............. Redeeming Shares; Pricing of Shares
9. Pending Legal Proceedings............ Not Applicable
PART B
Location in Statement of Additional
-----------------------------------
Information
-----------
10. Cover Page........................... Cover Page
11. Table of Contents.................... Cover Page
12. General Information and History...... General Information and History
13. Investment Objective and Policies.... Investment Objective, Policies and
Restrictions
<PAGE>
14. Management of the Fund............... Directors and Executive Officers
15. Control Persons and Principal
Holders of Securities................ Investment Advisory and Other
Services; Capital Stock
16. Investment Advisory and Other
Services............................. Investment Advisory and Other
Services
17. Brokerage Allocation................. Portfolio Transactions and
Brokerage Allocations
18. Capital Stock and Other Securities... Capital Stock
19. Purchase, Redemption and Pricing
of Securities Being Offered.......... Purchasing Shares; 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.
<PAGE>
PARTNERS VALUE FUND
----------------------------------------------------------------------------
SERIES OF
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 (the "Fund"), is a series of Weitz Partners, Inc., a
Nebraska corporation which is a no-load, open-end management investment company.
The Fund, which is non-diversified, seeks to achieve its investment objective of
capital appreciation primarily through its investment in equity securities and
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 issuers. The Fund's investment strategy is based on
the concept of "value investing." For further information see "Investment
Objective & Policies" on page 7.
Shares can be purchased directly without the payment of any sales charges by
contacting the Fund. There are no "12b-1" fees, distribution fees or redemption
fees.
This Prospectus, which should be kept for future reference, sets forth
concisely certain information an investor should know about the Fund before
purchasing shares. More detailed information about the Fund can be found in the
Statement of Additional Information which has been filed with the Securities and
Exchange Commission and is incorporated herein by reference. The Statement of
Additional Information, dated the date of this Prospectus, is available without
charge upon request by telephoning or writing the Fund at the address shown
above.
PURCHASE OF SHARES OF THE FUND INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PROSPECTUS DATED APRIL 30, 1997
<PAGE>
(This page left blank intentionally)
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Fund Expenses...................................................................... 4
Financial Highlights............................................................... 5
Investment Management Information.................................................. 7
Investment Objective and Policies................................................ 7
Investment Securities............................................................ 7
Investment Restrictions.......................................................... 9
Investment Risks................................................................. 9
Purchasing Shares.................................................................. 10
Opening a Regular New Account.................................................... 10
Opening a Retirement Account..................................................... 10
Purchasing Shares of the Fund.................................................... 10
Changing Your Address............................................................ 11
Confirmations and Shareholder Reports............................................ 11
Redeeming Shares................................................................... 12
Redemption Procedures............................................................ 12
Redemption Payments.............................................................. 12
Signature Guarantees............................................................. 13
Other Redemption Information..................................................... 13
Exchanging Shares.................................................................. 14
Pricing of Shares.................................................................. 15
Dividends, Distributions and Taxes................................................. 16
Management......................................................................... 17
Investment Adviser............................................................... 17
Transfer Agent and Administrative Services....................................... 17
Code of Ethics................................................................... 17
Additional Information............................................................. 18
Organization and Capital Structure............................................... 18
Performance Information.......................................................... 18
Fund Distributor................................................................. 19
Fund Custodian................................................................... 19
Fund Auditor..................................................................... 19
Fund Legal Counsel............................................................... 19
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
-3-
<PAGE>
- --------------------------------------------------------------------------------
FUND EXPENSES
The purpose of the following table is to help you understand the various
costs and expenses that you, as a shareholder, will bear directly or indirectly
in connection with an investment in the Fund.
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases None
Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fees None
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees
Investment Advisory Fee 1.00%
12b-1 Fees None
Other Expenses
Administrative Fee* .11%
All Other Expenses .12%
------
Total Fund Operating Expenses 1.23%
</TABLE>
<TABLE>
<S> <C> <C>
EXAMPLE:
Based on the "Total Fund Operating Expenses" set 1 Year $ 13
forth above, you would pay the following expenses on 3 Years $ 40
a $1,000 investment, assuming: (1) a 5% annual return; 5 Years $ 69
and (2) redemption at the end of each time period. 10 Years $ 151
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
PAST OR FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN ABOVE. THE ASSUMED 5% ANNUAL
RETURN IS NOT A PREDICTION OF, AND DOES NOT REPRESENT, THE
PROJECTED OR ACTUAL PERFORMANCE OF THE FUND.
*Under the Administration Agreement, the administrative fee is a monthly fee
representing the costs of providing administrative services to the Fund based
upon the Administrator's reasonable allocation of expenses, not to exceed .25%
of average daily net assets.
-4-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following information provides selected data for a share of the Fund
outstanding throughout the periods indicated. Information for the year ended
December 31, 1996, has been audited by McGladrey & Pullen, LLP, independent
certified public accountants, whose report thereon, which is incorporated by
reference, appears in the Fund's Annual Report. The information for periods
prior to January 1, 1996, was audited by other certified public accountants.
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994**
--------------- --------------- ---------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.384 $ 8.275 $ 10.000
--------------- --------------- ---------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.057 0.084 0.057
Net gains or losses on securities (realized
and unrealized) 1.933 3.108 (0.964 )
--------------- --------------- ---------------
Total from investment operations 1.990 3.192 (0.907 )
--------------- --------------- ---------------
LESS DISTRIBUTIONS
Dividends from net investment income (0.061 ) (0.237 ) --
Distributions from realized gains (0.789 ) (0.846 ) (0.818 )
--------------- --------------- ---------------
Total distributions (0.850 ) (1.083 ) (0.818 )
--------------- --------------- ---------------
NET ASSET VALUE, END OF PERIOD $ 11.524 $ 10.384 $ 8.275
--------------- --------------- ---------------
--------------- --------------- ---------------
TOTAL RETURN 19.2% 38.7% -9.0%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $94,846,411 $73,780,888 $51,287,492
Ratio of expenses to average net assets 1.23% 1.27% 1.29%
Ratio of net investment income to average net
assets 0.51% 0.82% 0.67%
Portfolio turnover rate 37% 51% 33%
Average commission rate paid (per share)* $ 0.0495 N/A N/A
</TABLE>
*Required by regulations issued in 1995.
**Fund commenced public offering of shares on January 1, 1994.
-5-
<PAGE>
The chart below depicts the change in the value of a $100,000 investment
for the period since inception (June 1, 1983), through December 31, 1996, for
Weitz Partners II - Limited Partnership, the predecessor to the Fund, (the
"Predecessor Partnership") and the Fund as compared with the growth of the
Standard & Poor's 500 Index during the same period. The Standard & Poor's 500
Index 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 June 1, 1983, would have been valued at $724,288
on December 31, 1996, assuming reinvestment of dividends and capital gains.
Value of $100,000 Investment
Since inception of the Predecessor Partnership
<TABLE>
<CAPTION>
Partners
Value S&P 500
--------- ---------
Value of Value of
$100,000 $100,000
<S> <C> <C>
05/31/83 $100,000 $100,000
06/30/83 100,190 103,891
07/31/83 99,719 100,824
08/31/83 101,614 102,330
09/30/83 107,426 103,742
10/31/83 108,876 102,541
11/30/83 111,718 104,703
12/31/83 109,900 104,154
01/31/84 114,703 103,572
02/29/84 109,759 99,926
03/31/84 111,680 101,655
04/30/84 112,238 102,618
05/31/84 109,690 96,942
06/30/84 111,566 99,052
07/31/84 110,238 97,822
08/31/84 120,104 108,281
09/30/84 122,650 108,553
10/31/84 123,840 109,068
11/30/84 125,054 107,845
12/31/84 125,835 110,685
01/31/85 131,649 119,307
02/28/85 138,192 120,760
03/31/85 146,290 120,838
04/30/85 145,910 120,729
05/31/85 151,980 127,703
06/30/85 155,065 129,702
07/31/85 157,267 129,511
08/31/85 157,644 128,397
09/30/85 158,527 124,379
10/31/85 169,656 130,122
11/30/85 178,580 139,046
12/31/85 177,051 145,771
01/31/86 177,582 146,584
02/28/86 189,054 157,532
03/31/86 197,788 166,326
04/30/86 195,573 164,452
05/31/86 199,465 173,193
06/30/86 199,804 176,125
07/31/86 194,769 166,280
08/31/86 198,528 178,610
09/30/86 195,729 163,836
10/31/86 199,174 173,290
11/30/86 199,313 177,501
12/31/86 196,704 172,963
<CAPTION>
Partners
Value S&P 500
--------- ---------
Value of Value of
$100,000 $100,000
<S> <C> <C>
01/31/87 206,598 196,252
02/28/87 210,813 203,998
03/31/87 216,041 209,883
04/30/87 212,390 208,018
05/31/87 212,857 209,813
06/30/87 215,113 220,407
07/31/87 220,233 231,571
08/31/87 223,735 240,203
09/30/87 224,205 234,936
10/31/87 205,372 184,374
11/30/87 202,024 169,207
12/31/87 205,162 182,107
01/31/88 211,768 189,761
02/29/88 216,639 198,563
03/31/88 217,224 192,437
04/30/88 220,243 194,565
05/31/88 221,498 196,219
06/30/88 226,482 205,216
07/31/88 228,339 204,434
08/31/88 228,248 197,499
09/30/88 232,653 205,903
10/31/88 234,165 211,632
11/30/88 232,315 208,604
12/31/88 235,730 212,239
01/31/89 244,971 227,737
02/28/89 245,951 222,072
03/31/89 251,239 227,245
04/30/89 262,796 239,031
05/31/89 264,820 248,660
06/30/89 269,084 247,259
07/31/89 278,233 269,563
08/31/89 281,711 274,811
09/30/89 284,951 273,690
10/31/89 280,620 267,342
11/30/89 281,237 272,768
12/31/89 283,585 279,307
01/31/90 268,016 260,566
02/28/90 270,401 263,942
03/31/90 270,158 270,930
04/30/90 269,239 264,180
05/31/90 282,082 289,876
06/30/90 283,267 287,921
07/31/90 278,253 287,000
08/31/90 263,033 261,085
09/30/90 254,879 248,396
10/31/90 244,174 247,344
11/30/90 257,481 263,296
12/31/90 265,719 270,624
<CAPTION>
Partners
Value S&P 500
--------- ---------
Value of Value of
$100,000 $100,000
<S> <C> <C>
01/31/91 282,698 282,379
02/28/91 297,907 302,544
03/31/91 304,580 309,862
04/30/91 308,205 310,597
05/31/91 317,050 323,944
06/30/91 306,492 309,113
07/31/91 314,338 323,508
08/31/91 320,185 330,713
09/30/91 325,372 325,175
10/31/91 326,836 329,536
11/30/91 317,064 316,290
12/31/91 340,385 352,400
01/31/92 344,368 345,840
02/29/92 349,534 350,313
03/31/92 349,884 343,506
04/30/92 351,144 353,578
05/31/92 355,077 355,301
06/30/92 356,107 350,015
07/31/92 359,882 364,302
08/31/92 352,972 356,855
09/30/92 357,914 361,047
10/31/92 354,550 362,286
11/30/92 378,730 374,583
12/31/92 391,786 379,177
01/31/93 403,383 382,344
02/28/93 411,088 387,549
03/31/93 418,652 395,719
04/30/93 407,181 386,154
05/31/93 420,089 396,448
06/30/93 430,087 397,604
07/31/93 437,054 396,002
08/31/93 465,200 410,990
09/30/93 461,525 407,836
10/31/93 477,540 416,266
11/30/93 470,854 412,311
12/31/93 481,897 417,294
01/31/94 487,776 431,467
02/28/94 468,693 419,763
03/31/94 445,899 401,486
04/30/94 447,778 406,638
05/31/94 461,030 413,288
06/30/94 450,573 403,163
07/31/94 460,018 416,391
08/31/94 471,439 433,428
09/30/94 458,042 422,844
10/31/94 462,716 432,310
11/30/94 444,211 416,581
12/31/94 438,388 422,746
01/31/95 453,910 433,700
02/28/95 473,035 450,582
03/31/95 477,273 463,855
04/30/95 487,074 477,504
05/31/95 509,272 496,545
06/30/95 530,728 508,068
07/31/95 550,806 524,906
08/31/95 574,487 526,216
09/30/95 585,718 548,410
10/31/95 575,970 546,450
11/30/95 601,664 570,411
12/31/95 607,860 581,397
01/31/96 634,319 601,161
02/29/96 647,783 606,747
03/31/96 645,207 612,589
04/30/96 649,714 621,610
05/31/96 661,948 637,611
06/30/96 668,914 640,039
07/31/96 628,581 611,775
08/31/96 654,865 624,695
09/30/96 678,456 659,822
10/31/96 680,798 678,013
11/30/96 715,453 729,214
12/31/96 724,288 714,767
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns
Since
Inception
1 year 5 years 10 years (June 1, 1983)
--------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
Partners Value Fund (and Predecessor Partnership) 19.2% 16.3% 13.9% 15.7%
Standard & Poor's 500 Index 22.9% 15.2% 15.2% 15.6%
</TABLE>
The investment strategy of Wallace R. Weitz & Company, the Fund's
Investment Adviser (the "Adviser") is to buy stocks of well-managed,
understandable, good businesses that are selling at significant discounts to the
Adviser's appraisal of their enterprise values. This conservative,
value-oriented approach often leads to under-performance (relative to the
Standard & Poor's 500 Index) 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 approximately
10-15%) during 1996. The stocks which contributed the most to the Fund's returns
in 1996 were banks and other financial service companies. These companies
generally enjoyed good operating conditions in 1996, and their stock prices also
benefited from merger activity among financial institutions. The cable TV and
cellular telephone stocks in the Fund's portfolio generally declined in price
during 1996 and contributed to the underperformance (relative to the Standard &
Poor's 500 Index) for the year.
TOTAL RETURNS ARE BASED UPON PAST RESULTS AND ARE NOT A PREDICTION OF
FUTURE PERFORMANCE.
-6-
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT MANAGEMENT INFORMATION
INVESTMENT OBJECTIVE & POLICIES
The investment objective of the Fund is capital appreciation. The Fund seeks
to achieve its objective through investment in equity securities (stocks). The
Fund's investment strategy (which is called "value investing") is to (1)
identify attractive businesses that we can understand and which have honest,
competent management, (2) determine the price that an informed, rational buyer
would pay for 100% of that business, and then (3) buy shares in the business if
they are available at a significant discount to this "business value" or
"private market value." The valuation process may focus on asset values, earning
power, the intangible value of a company's "franchise," or a combination of
these variables, depending on the type of business and other factors. Purchasing
shares at a discount to value is intended to provide what Benjamin Graham called
a "margin of safety." The margin of safety does not eliminate risk, but it is
intended to reduce the likelihood of permanent loss of capital. Under-valued
securities are, by definition, out of favor with investors, and there is no way
to predict when the securities may return to favor. Thus, shareholders should
invest in the Fund only if they intend to be patient, long-term investors.
The Fund will be invested primarily in common stocks and securities which
are convertible into common stocks, such as convertible bonds, preferred stocks,
and warrants. The Fund may also invest in non-convertible securities which are
deemed to be under-valued and which offer potential for capital gains. The
Adviser does not intend to attempt to "time" the market, i.e. to sell a major
portion of its equity investments in anticipation of a general decline in stock
prices, but it may invest a portion (or all) of its assets in high quality
United States Government, Government Agency, or other high quality, short-term
securities and cash equivalents for temporary defensive purposes.
This investment strategy is generally characterized by relatively long
holding periods for stock positions and relatively low portfolio turnover. The
total portfolio turnover rate of the Fund is shown in the Financial Highlights
table on page 5 of this Prospectus. To the extent that a substantial portion of
the Fund's total return over time is earned in the form of long-term capital
gains, this type of investing may be more tax-efficient than a higher-turnover
strategy. However, while tax consequences for shareholders may be a factor in
investment decisions, tax-efficiency of the portfolio is not a primary
consideration.
INVESTMENT SECURITIES
As discussed above, the Fund invests primarily in common stocks and
securities convertible into common stocks. Provided below is a brief description
of certain investment practices and types of securities in which the Fund may
invest. 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 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
-7-
<PAGE>
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.
U.S. GOVERNMENT SECURITIES include direct obligations of the U.S. Treasury
(such as Treasury bills, notes and bonds) and federal agency obligations
guaranteed as to principal and interest by the U.S. Treasury. U.S. Government
Securities may also include securities issued by U.S. Government
instrumentalities and certain federal agencies which are neither direct
obligations of, nor guaranteed by, the U.S. Treasury. However, such securities
generally involve some type of federal sponsorship which may include the backing
of the security by specific types of collateral, the support of the issuer's
right to borrow from the U.S. Treasury, the discretionary authority of the U.S.
Treasury to purchase certain obligations of the issuer, or the credit of the
issuing government agency or instrumentality.
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 Adviser that the
investment will generate capital gains as a result 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. 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 does not intend 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 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
-8-
<PAGE>
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 economy of the United States 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 to the
extent allowed by the fundamental investment restrictions for the Fund.
INVESTMENT RESTRICTIONS
The Fund has adopted a number of investment restrictions set forth in the
Statement of Additional Information. The Fund's investment objective described
above and certain of the Fund's investment restrictions are fundamental policies
which cannot be changed without a vote of a majority of the outstanding shares
of the Fund. Certain nonfundamental investment restrictions have also been
adopted by the Fund and are subject to change by the Board of Directors of the
Fund without shareholder approval. The Fund's fundamental investment
restrictions, among others, include the following:
1. With respect to 50% of its total assets, the Fund may not 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
obligations issued, or guaranteed by, the United States of America, its
agencies or instrumentalities); and
2. The Fund may not invest more than 25% of its total assets, taken at
market value at the time of a particular purchase, in securities of
issuers in any one industry (other than obligations issued, or
guaranteed by, the United States of America, its agencies or
instrumentalities).
INVESTMENT RISKS
You should be aware of the fact that an investment in the Fund involves
certain risks. Prices of the securities in the Fund's portfolio will generally
fluctuate daily depending on general market conditions. Therefore, the value of
the Fund's shares will also fluctuate. Portions of the section titled
"Investment Securities" discuss certain additional risks which could be present
if the Fund acquires particular kinds of investments. Because the Fund is
nondiversified, it may, with respect to 50% of its total assets, concentrate its
investments by investing more than 5% of its total assets in the securities of
any one issuer. As a result, its shares may be more susceptible to adverse
changes in the value of the securities of a particular company. There is no
assurance that the investment objectives of the Fund can be achieved, and the
value of your investment upon redemption may be more or less than the purchase
price.
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PURCHASING SHARES
OPENING A REGULAR NEW ACCOUNT
You can open a new account by completing and signing a Purchase Application,
enclosing a check made payable to WEITZ PARTNERS, INC. and mailing the
application and check to:
Weitz Partners, Inc.
1125 South 103rd Street, Suite 600
Omaha, NE 68124-6008
PLEASE NOTE THAT THE MINIMUM INVESTMENT REQUIRED TO OPEN A REGULAR ACCOUNT IS
$100,000. SUBSEQUENT MINIMUM INVESTMENTS 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 from time to time. All purchase
orders are subject to acceptance by authorized officers of the Fund and are not
binding until so accepted.
OPENING A RETIREMENT ACCOUNT
Certain individuals may be eligible to open an
IRA or a SEP-IRA. In addition, existing IRA accounts and certain qualified
pension and profit sharing plans can be rolled over or transferred into a new
IRA account, which can be invested in shares of the Fund. You can request the
IRA Application Kit which contains an explanation of IRAs, including certain tax
considerations, by calling the Fund at 402-391-1980 or 800-232-4161. After
reading the information included in the kit, complete the IRA application and
the transfer form, if applicable, and mail it to the address shown above. IRA
accounts are currently charged an annual maintenance fee of $20.
Monies deposited into other types of pension or profit sharing plans may
also be invested in shares of the Fund. Although the Fund will endeavor to
provide assistance to investors in such plans, it does not have forms of such
plans for adoption and does not undertake to offer advice relating to the
establishment of such plans or compliance with ongoing requirements for such
plans. The investor should seek the guidance of a professional adviser before
investing retirement monies in shares of the Fund.
The minimum investment requirement for the purchase of the Fund's shares may
be waived for purchases in retirement accounts.
PURCHASING SHARES OF THE FUND
Purchases of Fund shares are not subject to any sales commissions or any
other transaction fees. The price you pay for the shares you buy in the Fund
will be the Fund's next-determined net asset value after the Fund receives your
request, provided we receive your request prior to the close of trading on the
New York Stock Exchange (ordinarily 3:00 p.m., Central time). See "Pricing of
Shares". The shares you are purchasing must be qualified for sale in your state
of residence. You can purchase shares in the following manner:
BY MAIL. To purchase additional shares in an existing account, send a check
payable to Weitz Partners, Inc. together with the remittance stub which is the
bottom portion of your most recent transaction statement to:
Weitz Partners, Inc.
1125 South 103rd Street, Suite 600
Omaha, NE 68124-6008
If the remittance stub is not available, please indicate on your check or on a
separate piece of paper the account name, your address and the account number.
If the purchase is for a new account, include your completed Purchase
Application as described above.
BY WIRE. To purchase shares with payment by bank wire:
1. Call the Fund at 402-391-1980 or 800-232-4161 and furnish your account
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name, address and account number together with the amount being wired
and the name of the wiring bank.
2. Instruct the bank to wire funds as follows:
Norwest Bank Nebraska, N.A.
1919 Douglas Street
Omaha, NE 68102
ABA #104000058
Capital Management & Trust Department
#1150-001-521
For credit to: Weitz Partners, Inc. 25308000
For the Account of: Your Account Number and Name
THE FUND WILL NOT BE RESPONSIBLE FOR THE CONSEQUENCES OF DELAYS IN THE BANK OR
FEDERAL RESERVE WIRE SYSTEM. BANKS MAY IMPOSE A CHARGE FOR THE WIRE TRANSFER OF
FUNDS.
If you are purchasing shares by wire for a new account, a completed Purchase
Application must be sent to the Fund at the address set forth above prior to
your purchase. Wired funds are considered received on the day they are deposited
in the Fund's account if they are deposited prior to the close of business on
the New York Stock Exchange, usually 3:00 p.m. Central time. If received after
the close of business of the exchange, shares will be purchased at the price
determined on the following day. See "Pricing of Shares."
BY AUTOMATIC INVESTMENT. At the time you open an account, you can choose to
make automatic investments in Fund shares at regular intervals (on the 1st or
the 15th day of the month or, if such day is not a business day, on the next
following business day) by completing the Automatic Investment Plan section of
the Purchase Application and sending a voided check from your bank account. You
can add or cancel the automatic investment service or change the amount by
sending a request in writing to the Fund.
If your automatic investment transaction or check mailed for purchase of
shares is returned by the bank, the Fund may hold you responsible for any costs
to the Fund resulting from (i) fees charged to the Fund or (ii) a decline in the
net asset value when the shares issued are canceled.
CHANGING YOUR ADDRESS
You can change the address on your account by sending a written request to
the Fund. The written request must be signed by all registered owners of the
account and should include your account name(s), account number(s) and both the
new and old addresses. To protect you and the Fund, redemptions from an account
are not allowed if the written request to change an address has been received by
the Fund within 24 hours of the redemption request.
CONFIRMATIONS AND SHAREHOLDER REPORTS
Each time you purchase, redeem or exchange shares, you will receive a
confirmation of the transaction from the Fund. At the end of each calendar
quarter you will receive a statement which will include complete information on
activity in your account during that quarter. At the end of each year your
statement will include detailed information on all transactions for that year.
You should save the year-end statement for tax purposes. In addition, the Fund
provides quarterly shareholder reports which include a listing of the securities
in the portfolio at the end of that quarter, together with a letter from the
portfolio manager discussing, among other things, investment results for the
quarter. The report for the period ending June 30 will also include unaudited
financial statements. The annual report for the period ending December 31 will
include the Fund's audited financial statements for the previous fiscal year.
It is the Fund's practice to send a single copy of each quarterly 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.
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REDEEMING SHARES
REDEMPTION PROCEDURES
The Fund will redeem your shares or any portion of your shares at any time
if you request such a redemption in writing. Shares will be redeemed at the net
asset value next determined after receipt of a redemption request in good order.
See "Pricing of Shares". There are no fees for redeeming shares. You must,
however, have a completed application on file with the Fund before a redemption
request will be accepted. In addition, the Fund must have received payment for
the shares being redeemed and may delay the redemption payment (normally not
more than 15 days) until the purchase funds have cleared. Such delays can be
avoided by purchasing shares with a certified or cashier's check or by wire
transfer.
A redemption request in good order can be sent by mail or facsimile
transmission to:
Weitz Partners, Inc.
1125 South 103rd Street, Suite 600
Omaha, NE 68124-6008
Fax Number 402-391-2125
A redemption request in good order should include the following information:
1. Your account name, account number and Fund name;
2. The amount of the transaction (specified in dollars or shares);
3. The signatures of all owners exactly as they are registered on the
account; if you are a corporate or trust shareholder, the signature must
be by an authorized person with an indication of the capacity in which
such person is signing;
4. A signature guarantee if required;
5. Other supporting legal documents that may be required in the case of
estates, trusts, guardianships, custodianships, partnerships,
corporations and certain other accounts.
You may call the Fund at 402-391-1980 or 800-232-4161 if you have questions
about the requirements for redemption requests.
REDEMPTION PAYMENTS
Payment for the shares redeemed will be made as soon as possible, but no
later than seven days after the date of the Fund's receipt of your redemption
request in good order. Payment will normally be made by check. Payment may also
be made by wire transfer in accordance with wire transfer instructions provided
in writing to the Fund accompanied by a signature guarantee. See "Signature
Guarantees" below. The Fund reserves the right to require you to pay for the
cost of transmitting the wire transfer. Your bank may also impose a charge to
receive the wire transfer.
A redemption of shares is treated as a sale for tax purposes which will
generally result in a short-term or long-term capital gain or loss, depending on
how long you have owned the shares.
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<PAGE>
SIGNATURE GUARANTEES
The Fund reserves the right to require a signature guarantee on all
redemptions. Signature guarantees WILL BE REQUIRED in the following
circumstances:
1. A redemption request which is payable to anyone other than the
shareholder(s) of record;
2. A redemption request which is to be mailed to an address other than the
address of record;
3. A redemption request which is 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, AND MEMBER
FIRMS OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC IS NOT AN ELIGIBLE
GUARANTOR.
OTHER REDEMPTION INFORMATION
The Fund reserves the right to automatically redeem any account balance in
cases where (i) the account balance falls below $500; or (ii) the shareholder
has failed to provide the Fund a tax identification number. Shareholders will be
notified in writing at least 60 days prior to the automatic redemption of their
account. Such automatic redemptions will reduce unnecessary administrative
expenses and, therefore, benefit the majority of shareholders.
Redemption payments normally will be made wholly in cash. The Fund may,
however, redeem its shares through the 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) one 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.
The Fund may suspend redemption privileges or postpone payment at times when
the New York Stock Exchange is closed for other than weekends or holidays, or
under emergency circumstances as permitted by the U.S. Securities and Exchange
Commission.
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EXCHANGING SHARES
You can exchange shares of the Fund for shares of a portfolio of Weitz
Series Fund, Inc. (a "Series Fund Portfolio"). EXCHANGES WILL ONLY BE MADE
BETWEEN ACCOUNTS WITH IDENTICAL REGISTRATIONS. The ability to initiate such
exchanges by telephone is automatically established on your account unless you
request otherwise. You should be aware that although there are no sales
commissions or other transaction fees related to exchanging shares, such an
exchange involves the redemption of shares from the Fund and the purchase of
shares of a Series Fund Portfolio and any gain or loss on the redemption will be
reportable on your tax return. The price for the shares being exchanged will be
the net asset value of the respective shares next determined after the Fund
receives your exchange request. See "Pricing of Shares".
You can request the exchange of shares by telephone or in writing in the
following manner:
1. If you do not currently have an account in Weitz Series Fund, Inc.,
request an application and prospectus for Weitz Series Fund, Inc. by
calling 402-391-1980 or 800-232-4161. Read the prospectus, complete the
application and return it to the Fund at the address set forth under the
caption "Purchasing Shares". The shares being acquired must be qualified
for sale in your state of residence.
2. Provide the name of the Series Fund Portfolio, the account name, your
address and account number and the dollar amount of shares to be
exchanged.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine, which will include use of specific
identifying information. When such procedures are followed, the Fund will not be
liable for losses caused by following telephone instructions which are
reasonably believed to be genuine. The Fund reserves the right to revise or
terminate the telephone exchange privilege at any time.
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. The Fund reserves the right at any time upon sixty days' prior notice to
suspend, limit, modify or terminate exchange privileges in order to prevent
transactions considered to be harmful to existing shareholders.
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PRICING OF SHARES
The Fund's net asset value per share is determined once each day as of the
close of trading on the New York Stock Exchange (ordinarily 3:00 p.m., Central
time) on days on which the New York Stock Exchange is open for business.
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.
The net asset value per share is determined by calculating the market value
of all the Fund's assets, deducting total liabilities and dividing the result by
the number of shares outstanding.
In calculating net asset value of the Fund's shares:
1. Securities traded on a national or regional securities exchange and
over-the-counter securities traded on the NASDAQ national market are
valued at the last sales price; if there were no sales on that day,
securities are valued at the mean between the latest available and
representative bid and asked prices;
2. Securities not listed on an exchange are valued at the mean between the
latest available and representative bid and asked prices;
3. The value of certain debt securities for which market quotations are not
readily available may be based upon current market prices of securities
which are comparable in coupon, rating and maturity or an appropriate
matrix utilizing similar factors; and
4. The value of securities for which market quotations are not readily
available, including restricted and not readily marketable securities,
is determined in good faith under the supervision of the Fund's Board of
Directors.
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DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund has qualified and intends to continue to qualify under Subchapter M
of the Internal Revenue Code of 1986 as a "regulated investment company" in part
by distributing substantially all of its net income and capital gains to its
shareholders. As a result, the Fund should not incur any significant federal
income tax liability. Should the Fund fail to distribute the required amounts,
it would be subject to a non-deductible 4% excise tax on certain undistributed
taxable income and realized capital gains.
Dividends and distributions will be paid at such times as may be required to
maintain the status of the Fund as a "regulated investment company." Certain
dividends declared in December of a calendar year and payable to shareholders of
record in such month but actually paid during January of the following year will
be taxable to shareholders as though received on December 31st of the year in
which such dividend was declared.
Unless you have elected otherwise by checking the appropriate box on the
Purchase Application either when you became a shareholder or by subsequently
amending your Purchase Application, all income dividends and capital gains
distributions will automatically be reinvested when paid in additional shares of
the Fund. Cash payment of dividends and distributions, if requested, will
generally be mailed within five days of the date such dividends and
distributions are paid. Shareholders subject to federal income taxation must
report dividends and distributions as income. Ordinary income distributions,
such as distributions from net investment income and distribution of short-term
capital gains, are taxable to shareholders as ordinary income whether received
in cash or in additional shares. In addition, capital gains distributions,
whether received in cash or in additional shares, are taxable as long-term
capital gains regardless of how long you have owned shares of the Fund. A
portion of the distributions paid by the Fund may qualify for the corporate
dividends-received deduction.
The information you will need in order to report the amount and type of
dividends and distributions you receive on your tax return will be sent to you
by the Fund early each calendar year.
You should consider the tax implications of buying shares immediately prior
to a distribution. If you purchase shares shortly before the record date for a
distribution, you will pay a price for such shares that includes the value of
the anticipated distribution and you will be taxed on the distribution when it
is received even though the distribution represents a return of a portion of the
purchase price.
The Fund is required by the Internal Revenue Code of 1986 to withhold 31% of
distributions, redemptions, exchanges and other payments made from your account
if you have not complied with certain regulations of the Internal Revenue
Service. In order to avoid this withholding requirement, you must certify on
your Purchase Application that the Social Security Number or Taxpayer
Identification Number you have provided to the Fund is correct and that either
you are not currently subject to backup withholding or are exempt from backup
withholding.
For additional information relating to taxes, see "Taxation" in the
Statement of Additional Information. You are advised to consult your own tax
advisor for more detailed information concerning federal, state and local income
taxation of Fund distributions as applied to your particular circumstances.
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MANAGEMENT
INVESTMENT ADVISER
The Fund's Investment Adviser is Wallace R. Weitz & Company, a Nebraska
corporation formed in March, 1983 and wholly owned by Wallace R. Weitz. The
Adviser provides investment advice to the Fund and is responsible for the
overall management of the Fund's business affairs, subject to the supervision of
the Fund's Board of Directors. Under the terms of an investment advisory
contract, the Adviser receives a monthly fee equal to 1% per annum of the Fund's
average daily net assets.
The Fund pays all expenses directly attributable to it. The Adviser has
agreed to reimburse the Fund or pay directly for a portion of the Fund's
operating expenses to the extent of the advisory fee paid if the total of such
expenses exceeds 1.50% of the Fund's annual average net assets.
Wallace R. Weitz is primarily responsible for the day-to-day management of
the Fund's portfolio. Mr. Weitz has been in the securities business since 1970,
serving as an account executive and securities analyst with G.A. Saxton & Co.,
Inc. from 1970 to 1973 and with Chiles, Heider & Co., from 1973 to 1983. Mr.
Weitz also provides investment advice to Weitz Series Fund, Inc., a registered
investment company consisting of four separate portfolios. In addition, he
manages an equity-oriented private investment partnership, an income private
investment partnership and certain individual accounts.
TRANSFER AGENT AND ADMINISTRATIVE SERVICES
Wallace R. Weitz & Company also serves as the Fund's Transfer Agent,
Dividend Disbursing Agent and Administrator pursuant to the terms of an
administration agreement. In this capacity it provides various administrative
and compliance services to the Fund, including, among others, daily pricing of
Fund shares, disbursing income dividends and capital gains distributions,
maintaining shareholder accounts, shareholder servicing and monitoring
compliance with recordkeeping and other regulatory requirements.
CODE OF ETHICS
The Fund and Wallace R. Weitz & Company have each adopted a written Code of
Ethics which, among other things, requires all employees to obtain preclearance
before executing any personal securities transactions. In addition, employees
are required to report their personal securities transactions at the end of each
quarter. The Code of Ethics also restricts employees from executing personal
trades in a security if there are any pending orders in that security by the
Fund or other clients of Wallace R. Weitz & Company, restricts portfolio
managers from executing personal trades in a security for a period seven days
before and seven days after a transaction in that security by any fund managed
by that portfolio manager, and prohibits employees from profiting from the
purchase and sale of the same security within a period of 60 days. The Board of
Directors of the Fund, which reviews the administration of the Code of Ethics on
an annual basis, may impose penalties for violations of the Code of Ethics.
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ADDITIONAL INFORMATION
ORGANIZATION AND CAPITAL STRUCTURE
Weitz Partners, Inc., a Nebraska corporation formed in July of 1993, is
authorized to issue a total of one billion shares of common stock in series with
a par value of $.00001 per share. The Board of Directors has authorized fifty
million of these shares to be issued by the Fund. The Board of Directors may
authorize additional shares in the Fund and, in addition, may authorize
additional series of Weitz Partners, Inc. each with its own investment
objectives, policies and restrictions. Upon receipt of payment for the shares,
all issued and outstanding shares are fully paid, nonassessable, redeemable and
fully transferable. All shares, which have no preemptive or conversion rights,
have equal voting rights and 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.
On certain issues, such as the election of directors, all shares of Weitz
Partners, Inc. vote together. If additional series were to be authorized by the
Board of Directors, the shareholders of a particular series would vote
separately on issues affecting only that particular series, such as the approval
of a change in a fundamental investment restriction for that series.
Annual shareholder meetings must be held only in certain specific situations
required by the Investment Company Act of 1940 or if called by the shareholders
pursuant to the Nebraska Business Corporation Act. Whether annual meetings will
be held in the future when not specifically required will be at the discretion
of the Board of Directors of the Fund.
PERFORMANCE INFORMATION
The Fund may include its total return in advertisements or reports to
shareholders or prospective investors. Total return is the percentage change in
the net asset value of a Fund share over a given period of time, with dividends
and distributions treated as reinvested. Performance of the Fund may be shown by
presenting one or more performance measurements. including cumulative total
return or average annual total return. Cumulative total return is the actual
total return of an investment in the Fund over a specific period of time and
does not reflect how much the value of the investment may have fluctuated during
the period of time indicated. Average annual total return is the annual compound
total return of the Fund over a specific period of time that would have produced
the cumulative total return over the same period if the Fund's performance had
remained constant throughout the period.
YOU SHOULD UNDERSTAND THAT ANY PERFORMANCE DATA PRESENTED REPRESENTS PAST
PERFORMANCE OF THE FUND AND IS NOT INTENDED TO BE REPRESENTATIVE OF FUTURE
PERFORMANCE. INVESTMENT RESULTS WILL FLUCTUATE OVER A PERIOD OF TIME SO THAT
YOUR SHARES IN THE FUND WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
The Fund may compare its performance to that of certain widely managed stock
indices including the Dow Jones Industrial Average, the Standard & Poor's 500
Stock Index, the Lipper Growth and Income Fund Index and the NASDAQ and Value
Line Composites. The Fund may also use comparative performance information
compiled by entities that monitor the performance of mutual funds generally such
as Lipper Analytical Services, Inc., Morningstar, Inc. and The Value Line Mutual
Fund Survey.
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FUND DISTRIBUTOR
The Fund is distributed by Weitz Securities, Inc., a Nebraska corporation
which is affiliated with Wallace R. Weitz & Company, the Fund's investment
adviser. Weitz Securities, Inc. is wholly owned by Wallace R. Weitz. Shares of
the Fund are sold without any sales commissions or other transaction fees. Weitz
Securities, Inc. pays any sales or promotional costs incurred in connection with
the sale of the Fund's shares.
FUND CUSTODIAN
Norwest Bank Nebraska, N.A., 1919 Douglas Street, Omaha, Nebraska 68102, is
the Custodian for the Fund.
FUND AUDITOR
McGladrey & Pullen LLP, 555 Fifth Avenue, New York, New York 10017, is the
independent certified public accountant and auditor for the Fund.
FUND LEGAL COUNSEL
Dechert Price & Rhoads, 1500 K Street NW, Washington, D.C. 20005 is the
Fund's legal counsel.
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WEITZ PARTNERS, INC.
- --------------------------------------------------------------------------------
PARTNERS VALUE FUND
-----------------------------------------------------------
-----------------------------------------------------------
PROSPECTUS
APRIL 30, 1997
-------------------------
-------------------------
No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus. If given or
made, such other information or representations must not be relied upon as
having been authorized by the Fund, the Investment Adviser or the Distributor.
This Prospectus does not constitute an offering by the Distributor in any state
in which such offering may not lawfully be made.
------------------------------------------
------------------------------------------
------------------------------------------
INVESTMENT ADVISER
WALLACE R. WEITZ & COMPANY
One Pacific Place, Suite 600
1125 South 103 Street
Omaha, Nebraska 68124-6008
------------------------------------------
<PAGE>
Weitz Partners, Inc.
STATEMENT OF ADDITIONAL INFORMATION
April 30, 1997
Table of Contents
Page
----
General Information and History. . . . . . . . . . . . . . . . . . . . . . 2
Investment Objective, Policies and Restrictions . . . . . . . . . . . . . 2
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . 9
Investment Advisory and Other Services . . . . . . . . . . . . . . . . . . 11
Portfolio Transactions and Brokerage Allocations . . . . . . . . . . . . . 13
Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Determination of Net Asset Value . . . . . . . . . . . . . . . . . . . . . 16
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Calculation of Performance Data. . . . . . . . . . . . . . . . . . . . . . 18
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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 30, 1997, 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.
The Fund is a non-diversified investment management company as defined
under the Investment Company Act of 1940 (the "1940 Act"). However, the Fund 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".
Certain of the investment restrictions 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,
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 U.S. Government Securities 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. 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 obligations of its agencies and instrumentalities. Obligations
issued or guaranteed by U.S. Government agencies and instrumentalities include,
for example, obligations of Federal Intermediate Credit Banks, Federal Home Loan
Banks, the Federal National Mortgage Association (FNMA), the Federal Home Loan
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<PAGE>
Mortgage Corporation (FHLMC), the Government National Mortgage Association
(GNMA) and the Farmers Home Administration. Certain U.S. Government agency
securities, such as those issued by GNMA, FNMA and FHLMC, are mortgage-related
securities which represent an undivided ownership interest in a pool of mortgage
loans. Ginnie Maes, securities issued by GNMA, are interests in pools of
mortgage loans insured by the Federal Housing Administration. Ginnie Maes are
backed by the full faith and credit of the United States Government. Fannie
Maes and Freddie Macs are securities issued by FNMA and FHLMC, respectively.
FNMA and FHLMC, which guarantee payment of principal and interest on Fannie Maes
and Freddie Macs, are federally chartered corporations 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.
Most mortgage-related securities are pass-through securities, which means
that they provide investors with payments consisting of both principal and
interest as the mortgages in the underlying mortgage pool are paid off. The
actual yield of such securities is influenced by the prepayment experience of
the mortgage pool underlying the securities. In periods of declining interest
rates, prepayments of the underlying mortgages tend to increase. 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. Although, depending on the
length of the mortgages in the pool, mortgage-related securities may have a
stated maturity of up to forty years, prepayments on the underlying mortgages
will make the effective maturity of the securities shorter. A security based on
a pool of forty-year mortgages may have an average life as short as two years.
The maturity of mortgage-related securities will be deemed to be the expected
effective maturity of the securities.
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
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<PAGE>
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 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. Such legislation may depress the prices of outstanding
lower rated, high yielding fixed income 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
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<PAGE>
the fiscal year ended December 31, 1996. 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.
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 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
economy of the United States in such respects as growth of gross national
product, rate of inflation, capital reinvestment, resource self-sufficiency and
balance of payments position.
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<PAGE>
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 "Pricing of Shares" 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 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.
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.
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<PAGE>
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 for a description of ratings.
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.
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% of the total
outstanding stock of such issuer is owned by the Fund
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<PAGE>
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% 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.
PORTFOLIO TURNOVER
The portfolio 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,
1996, and December 31, 1995, was 37% and 51%, 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 "Purchasing Shares" in the Prospectus for basic information on how to
purchase shares of the Fund.
To purchase shares, a shareholder should complete a Purchase Application
and transfer funds for such purchase either by sending a check or a wire
transfer to the Fund. The price paid for such shares will be the next
determined net asset value after the Fund receives the application and payment
for the shares. Net asset value of the Fund's shares is determined once each
day at the close of the New York Stock Exchange (ordinarily 3:00 p.m. Central
time). If the completed order is received before such 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 such time, the investor will become a
shareholder of record at the net asset value determined the following business
day.
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<PAGE>
When an investor purchases shares of the Fund, a shareholder's investment
account is opened in his/her name on the books of the Fund. No certificates for
shares are issued. A continuing permanent record of each shareholder's
investment account is maintained by the Fund. 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 the shareholder has elected on the Purchase Application to receive
such distributions in cash.
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
President, registered investment adviser, since July
Treasurer 1983; President, Weitz Securities, Inc., a
and Director registered broker-dealer, since its inception
Age: 48 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
Director accountants) since its inception in 1985;
Age: 49 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.
*Thomas R. Partner, Gaines, Mullen, Pansing, Hogan,
Pansing, Jr. attorneys, since 1973; Director, Weitz Series
Director Fund, Inc., since 1990; Director, Weitz Value
Age: 52 Fund, Inc., January 1986 until March 1990.
Richard D. Prior to his retirement in 1984, Mr. Holland
Holland was Vice Chairman, Rollheiser, Holland &
Director Kahler (1979-1984) (advertising) and
Age: 76 President of Holland, Dreves & Reilly (1954-
1979) (advertising); Director, Weitz Series
Fund, Inc. since June, 1995.
Delmer L. Toebben President, Curzon Advertising & Display, Inc.
Director since 1977; Director, Weitz Series Fund, Inc.
Age: 66 since July of 1996.
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Mary K. Beerling Vice President, Wallace R. Weitz & Company
Vice President since July 1994; Vice President, Weitz
and Secretary Securities, Inc., since July 1994; Vice
Age: 56 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
Vice President since June, 1992; Vice President of Weitz
Age: 43 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
Vice President since December 1992 and a financial analyst
and Assistant since January 1991; Portfolio Manager,
Secretary Hickory Portfolio of Weitz Series Fund, Inc.
Age: 39 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.
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<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, 1996. Under the Advisory Agreement remuneration of officers
is paid by the Investment Adviser.
COMPENSATION TABLE
<TABLE>
<CAPTION>
Total Compensation
Aggregate from Company and
Name of Compensation from Weitz Series Fund, Inc.
Person, Position the Company paid to directors
---------------- ----------- -----------------
<S> <C> <C>
Carroll E. Fredrickson, Director (1) $ 996 $3,400
John W. Hancock, Director 1,394 5,600
Richard D. Holland, Director 1,294 4,800
Thomas R. Pansing, Jr., Director 1,296 5,200
Delmer L. Toebben, Director (2) 600 3,000
Wallace R. Weitz, Director (3) 0 0
</TABLE>
(1) Mr. Fredrickson resigned his position as a member of the Board of Directors
effective July 29, 1996.
(2) Mr. Toebben became a member of the Board of Directors July 24, 1996.
(3) As a director who is also an officer of the Investment Adviser, Mr. Weitz
received no compensation for his service as a director.
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 February 10, 1997.
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<PAGE>
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 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 Fund's average daily
net assets. The total amount of advisory fees paid to the Investment Adviser
for the fiscal years ended December 31, 1996, 1995 and 1994 was $862,700,
$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.
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<PAGE>
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 based upon the costs to the Administrator of providing services to the Fund
based upon the Administrator's reasonable allocation of expenses, but not to
exceed .25% of the average daily net assets of the Fund. Services provided
under the Administration Agreement include, without limitation, customary
services related to fund accounting, record keeping, compliance, registration,
transfer agent and dividend disbursing. The cap of .25% may be decreased 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, 1996 was .11%. The total amount of fees paid under the
Administration Agreement for the fiscal years ended December 31, 1996, 1995 and
1994 was $99,953, $79,655 and $59,437, respectively.
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 McGladrey & Pullen, LLP, New York, New York. The Fund's legal
counsel is Dechert Price & Rhoads, Washington, DC.
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
13
<PAGE>
of Fund securities with brokers or dealers who have provided research,
statistical or other financial information.
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 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, 1996, 1995 and 1994, the Fund
paid $242,786, $162,891 and $118,757, respectively in brokerage commissions for
securities transactions in the Fund. $218,707 or approximately 90% of the total
commissions paid during the fiscal year ended December 31, 1996, 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, 1997, the Fund had 8,345,932 shares of its common stock
outstanding. As of that date the directors and officers of the Fund
collectively owned 236,885 shares which represented
14
<PAGE>
approximately 3% of the outstanding shares of Fund. Also as of that date the
following persons owned 5% or more of the Fund:
Name and Address No. of Shares Percentage Ownership
---------------- ------------- --------------------
Marquerite Scribante 563,923 6.8%
10030 Fieldcrest Drive
Omaha, Nebraska 68114
ORGANIZATION AND CAPITAL STRUCTURE
The Company is authorized to issue a total of one billion 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.
15
<PAGE>
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 or otherwise at the direction of
the Board of Directors of the Fund. 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 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 "Pricing of Shares."
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, 1996, the net asset
value per share for the Fund was calculated as follows:
Net Assets (94,846,411) Net Asset Value per
----------------------------
=
Shares Outstanding (8,230,622) Share ($11.524)
--------- ------
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
16
<PAGE>
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 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
or is exempt from back-up withholding. These certifications are contained in
the purchase application enclosed with the Prospectus.
17
<PAGE>
CALCULATION OF PERFORMANCE DATA
The Fund may include its total return in advertisements or reports to
shareholders or prospective investors. Total return is the percentage change in
the net asset value of a Fund share over a given period of time, with dividends
and distributions treated as reinvested. Performance of the Fund may be shown
by presenting one or more performance measurements, including cumulative total
return or average annual total return. Cumulative total return is the actual
total return of an investment in the Fund over a specific period of time and
does not reflect how much the value of the investment may have fluctuated during
the period of time indicated. Average annual total return is the annual
compound total return of the Fund over a specific period of time that would have
produced the cumulative total return over the same period if the Fund's
performance had remained constant throughout the period.
YOU SHOULD UNDERSTAND THAT ANY PERFORMANCE DATA PRESENTED REPRESENTS PAST
PERFORMANCE OF THE FUND AND IS NOT INTENDED TO BE REPRESENTATIVE OF FUTURE
PERFORMANCE. INVESTMENT RESULTS WILL FLUCTUATE OVER A PERIOD OF TIME SO THAT
YOUR SHARES IN THE FUND WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST.
The Fund may compare its performance to that of certain widely managed
stock indices including the Dow Jones Industrial Average, the Standard & Poor's
500 Stock Index, the Lipper Growth and Income Fund Index and the NASDAQ and
Value Line Composites. The Fund may also use comparative performance
information compiled by entities that monitor the performance of mutual funds
generally such as Lipper Analytical Services, Inc., Morningstar, Inc. and The
Value Line Mutual Fund Survey.
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
average annual total return for the Fund and the Predecessor Partnership for the
one, five and ten year periods ended December 31, 1996, and for the period from
inception (June 1, 1983) to December 31, 1996, was 19.2%, 16.3%, 13.9% and
15.7%, respectively. Cumulative total return for the Fund and the Predecessor
Partnership from inception (June 1, 1983) to December 31, 1996, was 624.3%. 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.
FINANCIAL STATEMENTS
The audited statements and notes included in the Fund's Annual Report for
the period ended December 31, 1996, and filed with the Securities and Exchange
Commission February 10, 1997, are
18
<PAGE>
incorporated herein by reference. An additional copy of such Annual Report may
be obtained without charge by request to the Fund at its address or phone number
shown on the cover page of this Statement of Additional Information.
19
<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
A-2
<PAGE>
of safety regarding timely payment is very strong. Those issues 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 17, 1997.
Statement of Assets and Liabilities.
Statement of Operations.
Statement of Changes in Net Assets.
Financial Highlights.
Notes to Financial Statements.
(b) Exhibits
Exhibit No. Description
----------- -----------
*1. Articles of Incorporation
2. Amended and Restated Bylaws
5. Management and Investment Advisory Agreement-Partners
Value Fund
*6. Distribution Agreement
*8. Custodian Agreement
9. Amended and Restated Administration Agreement
**10. Opinion and Consent of Messrs. Cline, Williams,
Wright, Johnson & Oldfather (with respect to the
Partners Value Fund)
11. Consents of KPMG Peat Marwick, LLP and McGladrey &
Pullen, LLP
<PAGE>
*13. Subscription Agreement of Wallace R. Weitz
***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.
*** Incorporated by reference to Fund's Post-Effective Amendment No. 3 on Form
N-1A filed April 19, 1996.
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 333 as of January 31, 1997
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
C-2
<PAGE>
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.
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 dividend 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.
C-3
<PAGE>
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Principal Occupations
Positions with (Present and For
Name Advisor Past Two Years
- -------------------- ------------------------- -----------------------------
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 Director Faculty Member, University of
Nebraska at Omaha since 1986.
Mary K. Beerling Vice President and See caption "Management" in
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
Item 29. PRINCIPAL UNDERWRITERS
(a) The Distributor is also the principal underwiter and distributor
of Weitz Series Fund, Inc., a registered investment management company
also advised by Wallace R. Weitz & Company.
C-4
<PAGE>
(b)
Positions and Positions and
Name and Principal Offices With Offices with
Business Address Underwriter Registrant
- ----------------------- ----------------------- ----------------------------
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 and 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
(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
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.
C-5
<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 30th day of April, 1997.
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 30, 1997:
Signature Title
----------- ----------------------------------------------
/s/ Wallace R. Weitz President, Principal Executive Officer,
- -------------------------- Principal Financial and Accounting Officer
Wallace R. Weitz and Director
/s/ Delmer L. Toebben Director
- --------------------------
Delmer L. Toebben
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
C-6
<PAGE>
EXHIBITS
TO
WEITZ PARTNERS, INC.
POST-EFFECTIVE AMENDMENT NUMBER 4
TO
FORM N-1A
as filed on April 30, 1997
C-7
<PAGE>
EXHIBITS
Exhibit No. Description
- -------------- -------------------------------------------------------------
2. Amended and Restated Bylaws
5. Amended and Restated Management and Investment Advisory
Agreement
9. Amended and Restated Administration Agreement
11. Consents of KPMG Peat Marwick, LLP and McGladrey and Pullen,
LLP
16. Schedule of Computation for Performance Quotations
27. Financial Data Schedule
C-8
<PAGE>
EXHIBIT 2
AMENDED AND RESTATED BYLAWS
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
WEITZ PARTNERS, INC.
ARTICLE I
OFFICERS, CORPORATE SEAL
Section 1.01. NAME. The name of the corporation is WEITZ PARTNERS, INC.
Section 1.02. REGISTERED OFFICE. The registered office of the corporation
in Nebraska shall be that set forth in the Articles of Incorporation or in the
most recent amendment of the Articles of Incorporation or resolution of the
directors filed with the Secretary of State of Nebraska changing the registered
office.
Section 1.03. OTHER OFFICES. The corporation's office in Nebraska shall
be 1125 South 103rd Street, Suite 600, Omaha, Nebraska, and the corporation may
have such other offices and places of business, within or without the State of
Minnesota, as the directors shall, from time to time, determine.
Section 1.04. CORPORATE SEAL. The corporation shall have no seal.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. PLACE AND TIME OF MEETINGS. Meetings of the shareholders
may be held at any place, within or without the State of Nebraska, designated by
the directors and, in the absence of such designation, shall be held at the
registered office of the corporation in the State of Nebraska. The directors
shall designate the time of day for each meeting and, in the absence of such
designation, every meeting of shareholders shall be held at 10:00 o'clock a.m.
Section 2.02. REGULAR MEETINGS. Annual meetings of shareholders will not
be held unless called by the shareholders pursuant to the Nebraska Business
Corporation Act unless required by the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder.
Section 2.03. SPECIAL MEETINGS. Special meetings of the shareholders may
be held at any time and for any purpose and may be called by the Chairperson of
the Board, the President, and two or more directors, or by one or more
shareholders holding ten percent (10%) or more of the shares entitled to vote on
the matters presented to the meeting.
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Section 2.04. QUORUM; ADJOURNED MEETINGS. The holders of a majority of
the shares outstanding and entitled to vote at a meeting shall constitute a
quorum for the transaction of business at any shareholders' meeting unless
otherwise required by the Nebraska Business Corporation Act or by the Investment
Company Act of 1940. In case a quorum shall not be present at a meeting, those
present in person or by proxy shall adjourn to such day as they shall, by
majority vote, agree upon without further notice other than by announcement at
the meeting at which such adjournment is taken. If a quorum is present, a
meeting may be adjourned from time to time without notice other than
announcement at the meeting. At adjourned meetings at which a quorum is
present, any business may be transacted which might have been transacted at the
meeting as originally noticed. If a quorum is present, the shareholders may
continue to transact business until adjournment notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 2.05. VOTING. At each meeting of the shareholders, every
shareholder shall have the right to vote in person or by proxy. Each
shareholder, unless the Articles of Incorporation or applicable laws provide
otherwise, shall have one vote for each share having voting power registered in
his/her name on the books of the corporation. Upon the demand of any
shareholder, the vote upon any question before the meeting shall be by written
ballot. Except as otherwise specifically provided by these Bylaws or as
required by provisions of the Investment Company Act of 1940 or other applicable
laws, all questions shall be decided by a majority vote of the number of shares
entitled to vote and represented at the meeting at the time of the vote. If the
matter(s) to be presented at a regular or special meeting relates only to a
particular portfolio or portfolios of the corporation, then only the
shareholders of the series of stock issued by such portfolio or portfolios are
entitled to vote on such matter(s).
Section 2.06. VOTING - PROXIES. The right to vote by proxy shall exist
only if the instrument authorizing such proxy to act shall have been executed in
writing by the shareholder himself or by his/her attorney thereunto duly
authorized in writing. No proxy shall be voted after three years from its date
unless it provides for a longer period.
Section 2.07. CLOSING OF BOOKS. The Board of Directors may fix a time,
not exceeding fifty (50) days preceding the date of any meeting of shareholders,
as a record date for the determination of the shareholders entitled to notice
of, and to vote at, such meeting, notwithstanding any transfer of shares on the
books of the corporation after any record date so fixed. If the Board of
Directors fails to fix a record date for determination of the shareholders
entitled to notice of, and to vote at, any meeting of shareholders, the record
date shall be the thirtieth (30th) day preceding the date of such meeting.
Section 2.08. NOTICE OF MEETINGS. The Secretary or an Assistant Secretary
shall mail to each shareholder, shown by the books of the corporation to be a
holder of record of voting shares, at his/her address as shown by the books of
the corporation, a notice setting out the time and date and place of any
shareholders' meeting, which notice shall be mailed at least ten (10) days and
not more than fifty (50) days prior thereto. Every notice of any shareholders'
meeting shall state the purpose
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or purposes for which the meeting has been called, pursuant to Section 2.03,
and the business transacted at all meetings shall be confined to the purpose
stated in the call.
Section 2.09. WAIVER OF NOTICE. Notice of any meeting may be waived
either before, at or after such meeting in writing signed by each shareholder
or representative thereof entitled to vote the shares so represented.
Section 2.10. WRITTEN ACTION. Any action which might be taken at a
meeting of the shareholders may be taken without a meeting if done in writing
and signed by a majority of the shareholders entitled to vote on that action.
If the action to be taken relates to a particular portfolio or portfolios of
the corporation, then only shareholders of the series of stock issued by such
portfolio or portfolios are entitled to vote on such action.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01. NUMBER AND TENURE OF OFFICE. The business of the
corporation shall be conducted by and its property managed by a Board of
Directors consisting of no less than three (3) nor more than seven (7)
directors, which number may be increased or decreased as provided in
Section 3.03 of this Article. Each director shall hold office until the next
meeting of stockholders of the corporation next succeeding his/her election or
until his/her successor is duly elected and qualified. Directors need not be
stockholders.
The Board of Directors may elect a Chairperson, who shall preside at
meetings and shall have such other responsibilities and duties as may be
requested of or assigned to him by the Board.
Section 3.02. VACANCIES. In case of any vacancy in the Board of
Directors through death, resignation or other cause, a majority of the
remaining directors, although such majority is less than a quorum, by an
affirmative vote, may, subject to any limitations contained in the Articles
of Incorporation, or the Investment Company Act of 1940, elect a successor to
hold office until the next annual meeting of the stockholders of the
corporation or until his/her successor is duly elected and qualified.
Section 3.03. INCREASE OR DECREASE IN NUMBER OF DIRECTORS. Subject to
any limitations contained in the Articles of Incorporation, the Board of
Directors, by the vote of a majority of the entire Board, may increase the
number of directors, and any vacancies so created shall be filled by the
stockholders at the next meeting of stockholders called for that purpose.
Subject to the said limitations, the Board of Directors, by the vote of a
majority of the entire Board, may likewise decrease the number of directors
to a number not less than three.
Section 3.04. ELECTION OF ENTIRE NEW BOARD. If at any time after the
first meeting of stockholders of the corporation more than one-third of the
directors in office shall consist of directors elected by the Board of
Directors, a meeting of the stockholders shall be called forthwith for the
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purpose of electing the entire Board of Directors, and the terms of office of
the directors then in office shall terminate upon the election and
qualification of such Board of Directors. This Section 3.04 may be altered,
amended or repealed only upon the affirmative vote of the holders of a
majority of all the shares of the common stock of the corporation at the time
outstanding and entitled to vote.
Section 3.05. PLACE OF MEETINGS, OFFICE AND RECORDS. The directors may
hold their meetings, have one or more offices and keep the books of the
corporation outside the State of Nebraska at any office or offices of the
corporation or at any other place as they may from time to time by resolution
determine, or, in the case of meetings, as shall be specified or fixed in the
respective notices or waivers of notice thereof.
Section 3.06. REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held quarterly at such time and on such notice as the
directors may from time to time determine.
A meeting of the Board of Directors shall be held immediately after a
meeting of the stockholders called for the election of directors. Said
meeting shall be held at the same place as the stockholders' meeting. No
notice of such meeting of the Board of Directors is required.
Section 3.07. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held from time to time upon call of the President or of a
majority of the directors by oral or telegraphic or written notice duly
served on or sent or mailed to each director not less than two (2) days
before such meeting. No notice need be given to any director who attends in
person or to any director who, in writing executed and filed with the records
of the meeting either before or after the holding thereof, waives such
notice. Such notice or waiver of notice need not state the purpose or
purposes of such meeting.
Section 3.08. QUORUM. A majority of the directors shall constitute a
quorum for the transaction of business, provided that a quorum shall in no
case be less than two directors. If at any meeting of the Board there shall
be less than a quorum present, a majority of those present may adjourn the
meeting from time to time until a quorum shall have been obtained. The act
of the majority of the directors present at any meeting at which there is a
quorum shall be the act of the directors, except as otherwise provided in the
Articles of Incorporation or in these Bylaws, or by specific statutory
provisions superseding the restrictions and limitations in the Articles of
Incorporation or in these Bylaws, or any contract or agreement to which the
corporation is a party.
Section 3.09. EXECUTIVE COMMITTEE. The Board of Directors may, in each
year, by the affirmative vote of a majority of the entire Board, elect from
the directors an Executive Committee to consist of such number of directors
(not less than two) as the Board may from time to time determine. The
Chairperson of the Committee shall be elected by the Board of Directors. The
Board of Directors by affirmative vote shall have power at any time to change
the members of such Committee and may fill vacancies in the Committee by
election from the directors. When the Board of Directors is not in session,
the Executive Committee shall have and may exercise any or all of the powers
of the Board of Directors in the management of the business and affairs of
the corporation
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except as provided by law or by any contract or agreement to which the
corporation is a party and except the power to increase or decrease the size
of, or fill vacancies on, the Board, to remove or appoint executive officers
or to dissolve, or change the membership of, the Executive Committee, and the
power to make or amend the Bylaws of the corporation. The Executive
Committee may fix its own rules for the conduct of its business or such rules
may be established by resolution of the Board of Directors, but in every case
the presence of a majority shall be necessary to constitute a quorum. In the
absence of any member of the Executive Committee, the members thereof present
at any meeting, whether or not they constitute a quorum, may appoint a member
of the Board of Directors to act in the place of such absent member.
Section 3.10. INVESTMENT COMMITTEE. The Board of Directors may appoint
an Investment Committee, consisting of three or more members, all of whom
shall be members of the Board of Directors. The Board of Directors may
remove any member and may appoint new alternate or additional members of the
Investment Committee, and may request persons who are not directors to serve
as ex officio members. It shall be the function of the Investment Committee
to advise the Board of Directors as to the investment of the assets of the
corporation. The Investment Committee shall have no power or authority to
make any contract or incur any liability whatever or to take any action
binding upon the corporation, the officers, the Board of Directors or the
stockholders.
Section 3.11. OTHER COMMITTEES. The Board of Directors, by the
affirmative vote of a majority of the entire Board, may appoint other
committees which shall in each case consist of such number of members (not
less than two) who are members of the Board of Directors and shall have and
may exercise such powers as the Board may determine in the resolution
appointing them. A majority of all members of any such committee may
determine its action and fix the time and place of its meeting, unless the
Board of Directors shall otherwise provide. The Board shall have power at any
time to change the members and powers of any such committee, to fill
vacancies, and to discharge any such committee, or to request persons who are
not directors to serve as ex officio members thereof.
Section 3.12. ACTION BY CONSENT. Unless otherwise provided by the
Articles of Incorporation or Bylaws, or by the Investment Company Act of 1940
or rules or regulations promulgated thereunder, any action required by
statute to be taken at a meeting of the directors, or of any committee, may
be taken without a meeting, if a consent in writing setting forth the action
so taken shall be signed by all of the directors or all of the members of the
committee, as the case may be. Such consent shall have the same effect as a
unanimous vote. The consent may be executed by the directors in counterparts.
Members of the Board of Directors, or any committee designated by the
Board, may participate in a meeting of the Board or such committee by
conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to this provision shall constitute
presence in person at such meeting.
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Section 3.13. COMPENSATION OF DIRECTORS. Directors who are also
officers or employees of the corporation's investment adviser or principal
underwriter, shall take no compensation and expenses for the attendance at a
meeting. Other directors shall receive such compensation and reimbursement
for expenses as shall be fixed by the Board of Directors.
Section 3.14 REMOVAL OF DIRECTORS. Any or all of the Directors of the
corporation may be removed without cause if the removal is approved by a vote
of the holders of a majority of the shares then entitled to vote at an
election of Directors provided, however, that no Director may be removed
(unless the entire Board is removed) when the votes cast against such
removal, or not consenting in writing to the removal, would be sufficient to
elect the Director if voted cumulatively at an election at which the same
total number of votes were cast (or, if the action is taken by written
consent, all shares entitled to vote were voted) and the entire number of
Directors authorized at the time of the Directors' most recent election were
then being elected. Whenever the Articles of Incorporation of the
Corporation provide that the holders of the shares of any class or series,
voting as a class or series, are entitled to elect one or more Directors, any
director so elected may be removed only by the applicable vote of the holders
of the shares of that class or series.
ARTICLE IV
OFFICERS
Section 4.01. NUMBER. The officers of the corporation shall consist of
a Chairperson of the Board (if one is elected by the Board), the President,
one or more Vice Presidents (if desired by the Board), a Secretary and one or
more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers,
and such other officers and agents as may, from time to time, be elected by
the Board of Directors. Any two offices except those of Chairperson of the
Board, President and Vice President may be held by one person.
Section 4.02. ELECTION, TERM OF OFFICE AND QUALIFICATIONS. At each
annual meeting of the Board of Directors, the Board shall elect, from within
or without their number, the President, the Secretary, the Treasurer and such
other officers as may be deemed advisable. Such officers shall hold office
until the next annual meeting of the directors or until their successors are
elected and qualify. The President and all other officers who may be
directors shall continue to hold office until the election and qualification
of their successors, notwithstanding an earlier termination of their
directorship.
Section 4.03. RESIGNATION. Any officer may resign his/her office at
any time by delivering a written resignation to the Board of Directors, the
President, the Secretary, or any Assistant Secretary. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 4.04. REMOVAL AND VACANCIES. Any officer may be removed from
his/her office by a majority of the whole Board of Directors, with or without
cause. Such removal, however, shall be without prejudice to the contract
rights of the person so removed. If there be a vacancy among the
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officers of the corporation by reason of death, resignation or otherwise,
such vacancy shall be filled for the unexpired term by the Board of Directors.
Section 4.05. CHAIRPERSON OF THE BOARD. The Chairperson of the Board,
if one is elected, shall preside at all meetings of the shareholders and
directors and shall have such other duties as may be prescribed, from time to
time, by the Board of Directors.
Section 4.06. PRESIDENT. The President shall have general active
management of the business of the corporation. In the absence of the
Chairperson of the Board, he/she shall preside at all meetings of the
shareholders and directors. He/she shall be the chief executive officer of
the corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He/she shall be ex officio a member of
all standing committees. He/she may execute and deliver, in the name of the
corporation, any deeds, mortgages, bonds, contracts or other instruments
pertaining to the business of the corporation and, in general, shall perform
all duties usually incident to the office of President. He/she shall have
such other duties as may, from time to time, be prescribed by the Board of
Directors.
Section 4.07. VICE PRESIDENT. Each Vice President shall have such
powers and shall perform such duties as may be specified in the Bylaws or
prescribed by the Board of Directors or by the President. In the event of
absence or disability of the President, Vice Presidents shall succeed to
his/her power and duties in the order designated by the Board of Directors.
Section 4.08. SECRETARY. The Secretary shall be secretary of, and
shall attend all, meetings of the shareholders and Board of Directors and
shall record all proceedings of such meetings in the minute book of the
corporation. He/she shall give proper notice of meetings of shareholders and
directors. He/she shall perform such other duties as may, from time to time,
be prescribed by the Board of Directors or by the President.
Section 4.09. TREASURER. The Treasurer shall keep accurate accounts of
all moneys of the corporation received or disbursed. He/she shall deposit
all moneys, drafts and checks in the name of, and to the credit of, the
corporation in such banks and depositories as a majority of the whole Board
of Directors shall, from time to time designate. He/she shall have power to
endorse, for deposit, all notes, checks and drafts received by the
corporation. He/she shall disburse the funds of the corporation, as ordered
by the Board of Directors, making proper vouchers therefor. He/she shall
render to the President and the directors, whenever required, an account of
all his/her transactions as Treasurer and of the financial condition of the
corporation, and shall perform such other duties as may, from time to time,
be prescribed by the Board of Directors or by the President.
Section 4.10. ASSISTANT SECRETARIES. At the request of the Secretary,
or in his/her absence or disability, any Assistant Secretary shall have power
to perform all the duties of the Secretary and, when so acting, shall have
all the powers of, and be subject to all restrictions upon, the Secretary.
The Assistant Secretaries shall perform such other duties as from time to
time may be assigned to them by the Board of Directors or the President.
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Section 4.11. ASSISTANT TREASURERS. At the request of the Treasurer,
or in his/her absence or disability, any Assistant Treasurer shall have power
to perform all the duties of the Treasurer, and when so acting, shall have
all the powers of, and be subject to all the restrictions upon, the
Treasurer. The Assistant Treasurers shall perform such other duties as from
time to time may be assigned to them by the Board of Directors or the
President.
Section 4.12. COMPENSATION. The officers of this corporation shall
receive such compensation for their services as may be determined, from time
to time, by resolution of the Board of Directors.
Section 4.13. SURETY BONDS. The Board of Directors may require any
officer or agent of the corporation to execute a bond (including, without
limitation, any bond required by the Investment Company Act of 1940 and the
rules and regulations of the Securities and Exchange Commission) to the
corporation in such sum and with such surety or sureties as the Board of
Directors may determine, conditioned upon the faithful performance of his/her
duties to the corporation, including responsibility for negligence and for
the accounting of any of the corporation's property, funds or securities that
may come into his/her hands. In any such case, a new bond of like character
shall be given at least every six years, so that the date of the new bond
shall not be more than six years subsequent to the date of the bond
immediately preceding.
ARTICLE V
SHARES AND THEIR TRANSFER AND REDEMPTION
Section 5.01. CERTIFICATES FOR SHARES.
(a) Shares issued by the corporation shall be uncertificated.
Section 5.02. ISSUANCE OF SHARES. The Board of Directors is authorized
to cause to be issued shares of the corporation up to the full amount
authorized by the Articles of Incorporation in such series and in such
amounts as may be determined by the Board of Directors and as may be
permitted by law. No shares shall be allotted except in consideration of
cash or property, including securities valued in accordance with procedures
adopted by the Board of Directors. At the time of such allotment of shares,
the Board of Directors making such allotments shall state, by resolution,
their determination of the fair value to the corporation in monetary terms of
any consideration other than cash for which shares are allotted. No shares
of stock issued by the corporation shall be issued, sold, or exchanged by or
on behalf of the corporation for any amount less than the net asset value per
share of the shares outstanding as determined pursuant to Article X hereunder.
Section 5.03. REDEMPTION OF SHARES. Upon the demand of any shareholder
this corporation shall redeem any share of stock issued by it held and owned
by such shareholder at the net asset value thereof as determined pursuant to
Article X hereunder. The Board of Directors may suspend the right of
redemption or postpone the date of payment during any period when: (a)
trading on the New York Stock Exchange is restricted or such Exchange is
closed for other than weekends or
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holidays; (b) the Securities and Exchange Commission has by order permitted
such suspension; or (c) an emergency as defined by rules of the Securities
and Exchange Commission exists, making disposal of portfolio securities or
valuation of net assets of the corporation not reasonably practicable.
Section 5.04. TRANSFER OF SHARES. Transfer of shares on the books of
the corporation may be authorized only by the shareholder named on the books
of the corporation in the case of uncertificated shares or in the certificate
in the case of certificated shares, or the shareholder's legal
representative, or the shareholder's duly authorized attorney-in-fact, and,
in the case of certificated shares, upon surrender of the certificate or the
certificates for such shares or a duly executed assignment covering shares
held in uncertificated form. The corporation may treat, as the absolute
owner of shares of the corporation, the person or persons in whose name
shares are registered on the books of the corporation.
Section 5.05. REGISTERED SHAREHOLDERS. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any
other person, whether or not it shall have express or other notice thereof,
except as otherwise expressly provided by the laws of Nebraska.
Section 5.06. TRANSFER AGENTS AND REGISTRARS. The Board of Directors
may from time to time appoint or remove transfer agents and/or registrars of
transfers of shares of stock of the corporation, and it may appoint the same
person as both transfer agent and registrar. Upon any such appointment being
made all certificates representing shares of capital stock thereafter issued
shall be countersigned by one of such transfer agents or by one of such
registrars of transfers or by both and shall not be valid unless so
countersigned. If the same person shall be both transfer agent and
registrar, only one countersignature by such person shall be required.
Section 5.07. TRANSFER REGULATIONS. The shares of stock of the
corporation may be freely transferred, and the Board of Directors may from
time to time adopt rules and regulations with reference to the method of
transfer of the shares of stock of the corporation.
ARTICLE VI
DIVIDENDS
It shall be the policy of the corporation to distribute to its
shareholders, at least annually, sufficient net investment income and
realized capital gains in order to comply with the provisions of the United
States Internal Revenue Code which relieve investment companies from Federal
Income Tax. The Board of Directors may provide to the shareholders a plan
for reinvesting such net investment income and capital gains under such terms
and conditions as they, in their discretion, shall deem desirable.
ARTICLE VII
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BOOKS AND RECORDS, AUDIT, FISCAL YEAR
Section 7.01. BOOKS AND RECORDS. The Board of Directors of the
corporation shall cause to be kept:
(1) a share register, giving the names and addresses of the
shareholders, the number and classes held by each, and the dates
on which the shares were issued;
(2) records of all proceedings of shareholders and directors; and
(3) such other records and books of account as shall be necessary and
appropriate to the conduct of the corporate business.
Section 7.02. DOCUMENTS KEPT AT REGISTERED OFFICE. The Board of Directors
shall cause to be kept at the registered office of the corporation originals or
copies of:
(1) records of all proceedings of the shareholders and directors;
(2) Bylaws of the corporation and all amendments thereto; and
(3) reports made to any or all of the shareholders within the last
preceding three (3) years.
Section 7.03. AUDIT, ACCOUNTANT.
(a) The Board of Directors shall cause the records and books of account of
the corporation to be audited at least once in each fiscal year and at such
other times as it may deem necessary or appropriate.
(b) The corporation shall employ an independent certified public accountant
or firm of independent certified public accountants as its Accountant to examine
the accounts of the corporation and to sign and certify financial statements
filed by the corporation. The Accountant's certificates and reports shall be
addressed both to the Board of Directors and to the shareholders.
(c) A majority of the members of the Board of Directors shall select the
Accountant at any meeting held before the first regular meeting of shareholders,
and thereafter shall select the Accountant annually in accordance with the
requirements of the Investment Company Act of 1940 and the regulations
promulgated thereunder. Such selection shall be submitted for ratification or
rejection at the next succeeding shareholders' meeting. If such meeting shall
reject such selection, the Accountant shall be selected by majority vote, either
at the meeting at which the rejection occurred or at a subsequent meeting of
shareholders called for the purpose.
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(d) Any vacancy occurring between regular meetings, due to the death,
resignation or otherwise of the Accountant, may be filled by the Board of
Directors.
Section 7.04. CALENDAR YEAR. The corporation shall operate and its
financial statements shall be prepared on a fiscal year ending December 31.
ARTICLE VIII
INSPECTION OF BOOKS
Section 8.01. Every shareholder of the corporation and every holder of a
voting trust certificate shall have a right to examine, in person or by agent or
attorney, at any reasonable time or times, for any proper purpose, and at the
place or places where usually kept, the share register, books of account and
records of the proceedings of the shareholders and directors and to make
extracts therefrom.
ARTICLE IX
VOTING OF STOCK HELD
Section 9.01. Unless otherwise provided by resolution of the Board of
Directors, the President, any Vice President, the Secretary or the Treasurer,
may from time to time appoint an attorney or attorneys or agent or agents of the
corporation, in the name and on behalf of the corporation, to cast the votes
which the corporation may be entitled to cast as a stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the corporation, at meetings of the holders of the stock or other
securities of any such other corporation or association, or to consent in
writing to any action by any such other corporation or association, and may
instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may execute or cause to be executed on behalf
of the corporation and under its corporate seal, or otherwise, such written
proxies, consents, waivers, or other instruments as it may deem necessary or
proper in the circumstances; or any of such officers may themselves attend any
meeting of the holders of stock or other securities of any such corporation or
association and thereat vote or exercise any or all other powers of the
corporation as the holder of such stock or other securities of such other
corporation or association, or consent in writing to any action by any such
other corporation or association.
ARTICLE X
DETERMINATION OF NET ASSET VALUE
Section 10.01. The net asset value per share of each series of stock
issued by the portfolios of the corporation shall be determined in good faith by
or under supervision of the officers of the corporation as authorized by the
Board of Directors as often and on such days and at such time(s) as the Board of
Directors shall determine. Provisions in the currently effective Prospectus of
the corporation regarding determination of net asset value shall be controlling.
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Section 10.02. For purposes of the computation of net asset value of the
corporation's shares, the following shall apply:
(a) The Board of Directors, or its authorized officer or other
representative, shall compute the net asset value of shares of common stock at
such times and by such methods as may be required by the Investment Company Act
of 1940 or rules or regulations thereunder. In the absence of any such
requirements, such computation shall be made at least once each day on which the
New York Stock Exchange is open for unrestricted trading. Such computation
shall be as of the close of the New York Stock Exchange.
The Board of Directors may cause the net asset value to be computed at
other times and may vary or terminate the effective periods, to the extent
permitted by applicable law.
(b) The net asset value in effect for the purpose of the issue of common
stock to the public shall be the net asset value next determined after receipt
of a purchase order at the principal office of the corporation or its agent or
in accordance with any provision of the Investment Company Act of 1940 and any
rule or regulation thereunder, or any rule or regulation made or adopted by any
Securities Association registered under the Securities Exchange Act of 1934.
(c) The net asset value applicable to each share of common stock of the
corporation surrendered to the corporation for redemption, pursuant to the
provisions of Article VII, Section 7.06 hereof, shall be that value next
determined after the request for redemption is properly received by the
corporation or its agent at either of their principal offices, or in accordance
with such other requirements as may be determined by the directors for
expediting redemptions.
(d) The net asset value of each share of common stock of the corporation
shall be the quotient obtained by dividing the value of the net assets of the
respective series of shares of the corporation (the value of the assets of the
corporation less its liabilities exclusive of common stock and surplus) by the
total number of shares of common stock outstanding at such close, all determined
and computed as follows:
(1) The assets shall be deemed to include:
(i) All cash on hand, on deposit or on call;
(ii) All bills and notes and accounts receivable;
(iii) All shares of stock and subscription rights and other securities
owned or contracted for by the corporation, other than its own
stock;
(iv) All stock and cash dividends and cash distributions to be
received by the corporation and not yet received by it, but
declared to stockholders of record on a date on or before the
date as of which the net asset value is being determined;
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<PAGE>
(v) All interest accrued on any interest bearing securities owned by
the corporation; and
(vi) All other property of any kind and nature including prepaid
expenses, the value of such assets to be determined as the Board
of Directors according to a method as they shall in good faith
determine to reflect fair market value.
In determining the value of the assets of the corporation for the purpose of
obtaining the net asset value, securities with maturities of sixty days or less
will be valued at cost and interest will be accrued daily. All other assets of
the corporation shall be valued by such method as the Board of Directors in good
faith shall deem to reflect their fair market value.
(2) The liabilities of the corporation shall be deemed to include:
(i) All bills and notes and accounts payable:
(ii) All administrative expenses payable and/or accrued (including
management fees);
(iii) All contractual obligations for the payment of money or property,
including the amount of any unpaid dividend declared upon the
corporation's stock and payable to stockholders of record on or
before the day as of which the value of the corporation's stock
is being determined;
(iv) All reserves, if any, authorized or approved by the Board of
Directors for taxes; and
(v) All other liabilities of the corporation of whatsoever kind and
nature, except liabilities represented by outstanding common
stock and surplus of the corporation.
(3) For the purpose hereof:
(i) Common stock subscribed for shall be deemed to be outstanding as
of the time of acceptance of any subscription and the entry
thereof on the books of the corporation and the net price thereof
shall be deemed to be an asset of the corporation; and
(ii) Common stock surrendered for redemption to the corporation
pursuant to the provisions of Article VII, Section 7.06 hereof
shall be deemed to be outstanding until the close of business on
the date surrendered and, thereupon, and until paid, the
redemption price thereof shall be deemed to be a liability of the
corporation.
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<PAGE>
ARTICLE XI
CUSTODY OF ASSETS
Section 11.01. All securities and cash owned by this corporation shall, as
hereinafter provided, be held by or deposited with a bank or trust company
having (according to its last published report) not less than two million
dollars ($2,000,000) aggregate capital, surplus and undivided profits (the
"Custodian").
This corporation shall enter into a written contract with the Custodian
regarding the powers, duties and compensation of the Custodian with respect to
the cash and securities of this corporation held by the Custodian. Said
contract and all amendments thereto shall be approved by the Board of Directors
of this corporation. In the event of the Custodian's resignation or
termination, the corporation shall use its best efforts promptly to obtain a
successor Custodian and shall require that the cash and securities owned by this
corporation held by the Custodian be delivered directly to such successor
Custodian.
ARTICLE XII
AMENDMENTS
Section 12.01. These Bylaws may be amended or altered by a vote of the
majority of the whole Board of Directors at any meeting provided that notice of
such proposed amendment shall have been given in the notice given to the
directors of such meeting. Such authority in the Board of Directors is subject
to the power of the shareholders to change or repeal such Bylaws by a majority
vote of the shareholders present or represented at any meeting of shareholders
called for such purpose. The Board of Directors shall not make or alter any
Bylaws fixing their qualifications, classifications, term of office, or number,
except that the Board of Directors may make or alter any Bylaw to increase their
number.
ARTICLE XIII
INDEMNIFICATION
No indemnification shall be made by this corporation that is inconsistent
with the guidelines set forth in Investment Company Act Releases No. 7221 (June
9, 1972) and No. 11330 (September 2, 1980) or, if such releases are modified,
superseded or rescinded, the guidelines set forth in any successor releases
regarding indemnification under Section 17(h) of the Investment Company Act of
1940.
This copy of the Bylaws is a true and accurate copy of the Bylaws
originally approved and adopted by the Board of Directors on July 8, 1993 and
amended and restated as of October 28, 1996.
/s/ Mary K. Beerling
-----------------------------------------
Mary K. Beerling,
Secretary
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<PAGE>
EXHIBIT 5
AMENDED AND RESTATED MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
<PAGE>
MANAGEMENT AND
INVESTMENT ADVISORY AGREEMENT
This amended and restated Agreement dated October 28, 1996 amends and
restates the Agreement dated February 2, 1996 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:
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<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.
-4-
<PAGE>
5. NON-EXCLUSIVE SERVICES OF ADVISER
Except to the extent necessary for performance of Adviser's obligations
hereunder, nothing 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 if
approved annually in accordance with the provisions of the Investment Company
Act of 1940 (the "1940 Act") and the regulations promulgated under the 1940
Act.
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 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
-5-
<PAGE>
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 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.
-6-
<PAGE>
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
--------------------------------
Secretary
-7-
<PAGE>
EXHIBIT 9
AMENDED AND RESTATED ADMINISTRATION AGREEMENT
<PAGE>
ADMINISTRATION AGREEMENT
This amended and restated Agreement dated February 10, 1997 amends and
restates the Agreement dated October 12, 1993 between WEITZ PARTNERS, INC., a
Nebraska corporation, having its principal office and place of business at
Omaha, Nebraska (the "Fund"), and WALLACE R. WEITZ & COMPANY, a Nebraska
corporation, having its principal office and place of business at Omaha,
Nebraska (the "Administrator"),
WHEREAS, the Fund desires to engage the Administrator to provide transfer
agent, dividend disbursing agent and fund accounting and related administrator
services.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Section 1. TERMS OF APPOINTMENT.
1.01 Subject to the conditions set forth in this Agreement, the Fund hereby
employs and appoints Administrator as the Fund's Administrator, Transfer Agent
and Dividend Disbursing Agent.
1.02 Administrator hereby accepts such employment and appointment and
agrees that on and after the effective date of its appointment it will act as
the Fund's Administrator, Transfer Agent and Dividend Disbursing Agent.
Administrator agrees that it will also act as agent in connection with any
periodic investment plan, periodic withdrawal program or other accumulation,
open-account or similar plans provided to the Fund's shareholders and set out in
the Fund's prospectus.
1.03 Administrator agrees to provide the necessary facilities, equipment
and personnel to perform its duties and obligations hereunder in accordance with
industry practice.
1.04 Administrator agrees that it will perform all of the usual and
ordinary services as Transfer Administrator and Dividend Disbursing
Administrator and as agent for the various shareholder accounts including but
not limited to: issuing, transferring and cancelling stock
<PAGE>
certificates, maintaining all shareholder accounts, preparing annual shareholder
meeting lists, mailing proxies, receiving and tabulating proxies, mailing
shareholder reports and prospectuses, withholding taxes on non-resident alien
accounts, disbursing income dividends and capital gains distributions, preparing
and filing U.S. Treasury Department Form 1099 for all shareholders, preparing
and mailing confirmation forms to shareholders for all purchases and
liquidations of Fund shares and other confirmable transactions in shareholders'
accounts, recording reinvestment of dividends and distributions in Fund shares,
causing liquidation of shares and causing disbursements to be made to withdrawal
plan holders.
1.05 Administrator agrees that it will furnish the Fund with office
facilities, including such space, furniture, equipment and supplies as well as
personnel sufficient to carry out the necessary administrative, clerical and
bookkeeping functions of the Fund. In connection therewith, the Administrator
shall maintain all records required to be maintained for the Fund under the
Investment Company Act of 1940. Additionally, the Administrator shall provide
the following services to the Fund:
i. Daily pricing;
ii. Computation of daily net asset value and reporting to Fund management,
and others as requested;
iii. Prepare daily cash availability reports for Portfolio managers;
iv. Post daily all fund activity and prepare all applicable daily reports;
v. Accrue expenses daily;
vi. Calculate daily reconciliations of cash, receivables, payable accounts
and shares outstanding;
-2-
<PAGE>
vii. Compute daily dividend rate for appropriate funds;
viii. Compute yields pursuant to S.E.C. formulas;
ix. Provide monthly analysis and reconciliation of all general ledger
accounts;
x. Generate and maintain monthly broker ledgers, commission ledgers and
net trade reports;
xi. Verify accuracy and propriety of bills and invoices, maintain
expenses files and coordinate payment of bills and invoices in a timely manner;
xii. Prepare report on expense limitations as needed;
xiii. Maintain and verify portfolio trade tickets with broker confirmation;
xiv. Determine income availability for monthly, quarterly and/or annual
dividend/distributions;
xv. Maintain historical record of all Fund net asset values and
dividend/distributions;
xvi. Coordinate audit examination of outside auditors, including
preparation of audit work paper package if required; and
xvii. Produce documents and respond to inquiries during S.E.C. audits.
Section 2. FEES AND EXPENSES.
2.01 For the services to be rendered by Administrator pursuant to
paragraph 1.04 and 1.05, the Fund agrees to pay Administrator a monthly fee
based upon the costs to the Administrator of providing services to the Fund
in accordance with the Administrator's reasonable allocation of expenses, but
not to exceed .25% of the average daily net assets of the Fund. The cap of
.25% of the average daily net assets of the Fund may be decreased from time
to time with the agreement of the Administrator and the President of the Fund
and increased only upon the approval of the Board of
-3-
<PAGE>
Directors of the Fund. Fees shall be billed monthly by Administrator and shall
be paid monthly by Fund within fifteen (15) days of the end of each month.
2.02 The Fund also agrees promptly to reimburse Administrator for all
reasonable out-of-pocket expenses or advances incurred by Administrator in
connection with the performance of services under this Agreement including, but
not limited to, expenditures for counsel fees, postage, envelopes, checks,
drafts, continuous forms, reports and statements, telephone, telegraph,
stationery, supplies, costs of outside mailing firms, record storage costs and
media for storage of records (e.g. microfilm, computer tapes or disks). In
addition, any other expenses incurred by Administrator at the request or with
the consent of the Fund will be promptly reimbursed by the Fund.
Section 3. REPRESENTATIONS AND WARRANTIES OF ADMINISTRATOR. Administrator
represents and warrants to the Fund that:
3.01 It is a corporation duly organized and existing and in good standing
under the laws of the State of Nebraska;
3.02 It is empowered under applicable laws and by its Articles of
Incorporation and By-laws to enter into and perform the services contemplated in
this Agreement;
3.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement; and
3.04 It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE FUND. The Fund
represents and warrants to Administrator that:
-4-
<PAGE>
4.01 It is a corporation duly organized and existing and in good standing
under the laws of the State of Nebraska;
4.02 It is, or prior to the public offering of its shares, will become an
open-end management investment company registered under the Investment Company
Act of 1940;
4.03 A registration statement under the Securities Act of 1933 is
currently, or prior to the public offering of its shares, will become effective
and will remain effective, and appropriate state securities laws filings have
been or will be made and will continue to be made, with respect to all shares of
the Fund being offered for sale;
4.04 The Fund is empowered under applicable laws and regulations and by its
charter and By-laws to enter into and perform this Agreement; and all requisite
corporate proceedings have been taken to authorize it to enter into and perform
under this Agreement.
Section 5. INDEMNIFICATION.
5.01 Administrator shall not be responsible and the Fund shall indemnify
and hold Administrator harmless from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability which may be
asserted against Administrator or for which it may be held to be liable, arising
out of or in any way attributable to:
(a) All actions of Administrator required to be taken by
Administrator pursuant to this Agreement provided that Administrator has
acted in good faith and with due diligence.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's negligence or willful
misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
-5-
<PAGE>
(c) The reliance on, or the carrying out of, any instructions or
requests of the Fund.
(d) Defaults by dealers with respect to payment for share orders
previously entered.
(e) The reliance on, or the carrying out of, any instructions or
requests of the Fund.
(f) The offer or sale of the Fund's shares in violation of any
requirement under federal securities laws or regulations or the securities
laws or regulations of any state or in violation of any stop order or other
determination or ruling by any federal agency or state with respect to the
offer or sale of such shares in such state (unless such violation results
from Administrator's failure to comply with written instructions of the
Fund or of any officer of the Fund that no offers or sales be made in or to
residents of such state).
5.02 Administrator shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of Administrator's willful failure to comply
with the terms of this Agreement or which arise out of Administrator's gross
negligence or willful misconduct.
5.03 At any time Administrator may apply to any officer of the Fund for
instructions, and may consult with legal counsel for the Fund or its own legal
counsel, at the expense of the Fund, with respect to any matter arising in
connection with the services to be performed by Administrator under this
Agreement and Administrator shall not be liable and shall be indemnified by the
Fund for any action taken or omitted by it in good faith in reliance upon such
instructions or upon the opinion of such counsel. Administrator shall be
protected and indemnified in acting upon any paper or
-6-
<PAGE>
document believed by it to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof from the Fund.
Administrator shall also be protected and indemnified in recognizing stock
certificates which Administrator reasonably believes to bear the proper manual
or facsimile signatures of the officers of the Fund, and the proper counter-
signature of any former transfer agent or registrar, or of a co-transfer agent
or co-registrar.
5.04 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage, or other causes reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
5.05 In no event and under no circumstances shall either party to this
Agreement be liable to the other party for consequential damages under any
provision of this Agreement or for any act or failure to act hereunder.
Section 6. COVENANTS OF ADMINISTRATOR AND THE FUND.
6.01 The Fund shall promptly furnish to Administrator the following:
(a) A certified copy of the resolution of the Board of Directors of
the Fund authorizing the appointment of Administrator and the execution and
delivery of this Agreement.
(b) Certified copy of the Articles of Incorporation and By-laws of
the Fund and all amendments thereto.
(c) Specimens of stock certificates, if any, in the form approved by
the Fund's Board of Directors with a certificate of the Secretary of the
Fund as to such approval.
-7-
<PAGE>
6.02 Administrator hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms, and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of such certificates,
forms and devices.
6.03 To the extent required by Section 31 of the Investment Company Act of
1940 and Rules thereunder, Administrator agrees that all records maintained by
Administrator relating to the services to be performed by Administrator under
this Agreement are the property of the Fund and will be preserved and will be
surrendered promptly to the Fund on request.
6.04 Administrator and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation of and the carrying out of this Agreement
shall remain confidential, and shall not be voluntarily disclosed to any other
person.
Section 7. TERMINATION OF AGREEMENT.
7.01 This Agreement may be terminated by either party by 90 days written
notice.
Section 8. MISCELLANEOUS.
8.01 Neither this Agreement nor any rights or obligations hereunder may be
assigned by either party without the written consent of the other.
8.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective successors and assigns.
8.03 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written, and this Agreement may not be modified except
by written instrument executed by both parties.
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by and through their duly authorized officers, as of the day and year
first above written.
WEITZ PARTNERS, INC.
ATTEST: By /s/Wallace R. Weitz
------------------------------------------
President
/s/Mary K. Beerling
- -------------------------------
Secretary
WALLACE R. WEITZ & COMPANY
By /s/Wallace R. Weitz
------------------------------------------
ATTEST: President
/s/Mary K. Beerling
- -------------------------------
Asst. Secretary
-9-
<PAGE>
EXHIBIT 11
CONSENTS OF KPMG PEAT MARWICK, LLP AND
MCGLADREY AND PULLEN, LLP
<PAGE>
ACCOUNTANTS' CONSENT
The Board of Directors
Weitz Partners, Inc.-Partners Value Fund:
We consent to the use of our report included herein on the statement of changes
in net assets for the year ended December 31, 1995 and on the financial
highlights for the two-year period ending December 31, 1995.
KPMG Peat Marwick LLP
Omaha, Nebraska
February 21, 1997
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference of our report dated
January 17, 1997 on the financial statements of Partners Value Fund, series of
Weitz Partners, Inc., referred to therein in Post-Effective Amendment No. 4 to
the Registration Statement on Form N-1A, File No. 33-66714 as filed with the
Securities and Exchange Commission.
We also consent to the reference to our firm in the Prospectus under the
captions "Financial Highlights" and "Fund Auditors" and in the Statement of
Additional Information under the caption "Other Services."
McGLADREY & PULLEN, LLP
New York, New York
February 24, 1997
<PAGE>
EXHIBIT 16
SCHEDULE OF COMPUTATION FOR PERFORMANCE QUOTATIONS
<PAGE>
Schedule 16
SCHEDULE OF COMPUTATIONS OF PERFORMANCE
PARTNERS VALUE FUND
The Total Return and Cumulative 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:
n
P(1 + T) = 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, 1996:
P = $1,000 (initial value)
n = 1 (1 year)
ERV = $1,192 (ending redeemable value)
Solve for T:
n
$1,000(1 + T) = 1,192
T = 19.2%
Average annual total return for the period five years ended December 31,
1996:
P = $1,000 (initial value)
n = 5 (5 years)
ERV = $2,128 (ending redeemable value)
Solve for T:
$1,000(1 + T)n = 2,128
T = 16.3%
C-9
<PAGE>
Average annual total return for the ten year period ended December 31,
1996:
P = $1,000 (initial value)
n = 10
ERV = $3,682 (ending redeemable value)
Solve for T:
n
$1,000(1 + T) = 3,682
T = 13.9%
Average annual total return from inception, June 1, 1983 to December 31,
1996:
P = $1,000 (initial value)
n = 13.583
ERV = $7,243 (ending redeemable value)
Solve for T:
n
$1,000(1 + T) = 7,243
T = 15.7%
CUMULATIVE RETURN:
Total return from inception, June 1, 1983 to December 31, 1996:
P = $1,000 (initial value)
ERV = $7,243 (ending redeemable value)
Solve for T:
$1,000 (1 + T) = 7,243
T = 624.3%
C-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>
<SERIES>
<NUMBER> 1
<NAME> WEITZ PARTNERS VALUE FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 71,074,329
<INVESTMENTS-AT-VALUE> 94,328,681
<RECEIVABLES> 827,959
<ASSETS-OTHER> 10,495
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 95,167,135
<PAYABLE-FOR-SECURITIES> 214,614
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 106,110
<TOTAL-LIABILITIES> 320,724
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 67,248,816
<SHARES-COMMON-STOCK> 8,230,622
<SHARES-COMMON-PRIOR> 7,104,939
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,343,243
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 23,254,352
<NET-ASSETS> 94,846,411
<DIVIDEND-INCOME> 872,728
<INTEREST-INCOME> 632,476
<OTHER-INCOME> 0
<EXPENSES-NET> (1,065,568)
<NET-INVESTMENT-INCOME> 439,636
<REALIZED-GAINS-CURRENT> 8,613,668
<APPREC-INCREASE-CURRENT> 6,036,893
<NET-CHANGE-FROM-OPS> 15,090,197
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (476,435)
<DISTRIBUTIONS-OF-GAINS> (6,116,607)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,195,364
<NUMBER-OF-SHARES-REDEEMED> (504,774)
<SHARES-REINVESTED> 435,093
<NET-CHANGE-IN-ASSETS> 21,065,523
<ACCUMULATED-NII-PRIOR> 30,808
<ACCUMULATED-GAINS-PRIOR> 1,852,173
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<AVERAGE-NET-ASSETS> 85,944,900
<PER-SHARE-NAV-BEGIN> 10.384
<PER-SHARE-NII> 0.057
<PER-SHARE-GAIN-APPREC> 1.933
<PER-SHARE-DIVIDEND> (0.061)
<PER-SHARE-DISTRIBUTIONS> (0.789)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.524
<EXPENSE-RATIO> 1.23
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
