As filed with the Securities and Exchange Commission on January 27, 1998
Registration Nos. 33-66712, 811-7932
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 15
and
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 17
relating solely to the
LINDNER HIGH-YIELD BOND
a series of
LINDNER INVESTMENTS
(Exact Name of Registrant as Specified in Charter)
7711 Carondelet, Suite 700
St. Louis, Missouri 63105
(Address of Principal Executive Office)
(314) 727-5305
(Registrant's Telephone Number, Including Area Code)
Eric E. Ryback, President
Ryback Management Corporation
7711 Carondelet, Suite 700
St. Louis, Missouri 63105
(Name and Address of Agent for Service)
Copy to:
Paul R. Rentenbach
Dykema Gossett PLLC
400 Renaissance Center
Detroit, Michigan 48243
FAX: 313-568-6915
It is proposed that this filing will become effective (check appropriate
box):
[ ] 60 days after filing pursuant to Rule 485(a)(1), or
[ ] On , 199 , pursuant to Rule 485(a)(1), or
[ ] 75 days after filing pursuant to Rule 485(a)(2), or
[X] On April 12, 1998, pursuant to Rule 485(a)(2).
[ ] Immediately upon filing pursuant to Rule 485(b), or
[ ] On , 199 , pursuant to Rule 485(b)
If appropriate, check this box:
[ ] This post-effective amendment designates a new effective
date for a previously-filed post-effective amendment.
<PAGE> CROSS REFERENCE SHEET
Form N-1A Part A Item Location in Prospectus
- --------------------- ----------------------
Item 1 Cover Page Cover Page
Item 2 Synopsis Fund Expenses
Item 3 Condensed Financial Information Financial Highlights; Fund
Expenses; Performance
Item 4 General Description of Registrant Lindner Investments;
Investment Objective,
Policies and Risks
Item 5 Management of the Fund Management of the Trust
Item 5a Management's Discussion of Fund
Performance Not Applicable
Item 6 Capital Stock and Other Securities Dividends, Distributions and
Taxes; Purchase of Shares and
Shareholder Inquiries;
Redemption of Shares; Other
Information
Item 7 Purchase of Securities Being Offered Purchase of Shares and
Shareholder Inquiries;
Pricing of Shares for
Redemption; Distribution and
Service Plan; Automatic
Investment Plan; Systematic
Withdrawal Plan; Individual
Retirement Accounts
Item 8 Redemption or Repurchase Redemption of Shares;
Systematic Withdrawal Plan
Item 9 Pending Legal Proceedings Not Applicable
Location in Statement of
Form N-1A Part B Item Additional Information
- --------------------- ------------------------
Item 10 Cover Page Cover Page
Item 11 Table of Contents Table of Contents
Item 12 General Information and History Not Applicable
Item 13 Investment Objectives and Policies Investment Objectives,
Policies and Restrictions
Item 14 Management of the Fund Management of the Trust
Item 15 Control Persons and Principal Holders
of Securities Control Persons and Principal
Holders of Securities
Item 16 Investment Advisory and
Other Services Investment Advisory and Other
Services
Item 17 Brokerage Allocation and Other
Practices Brokerage Allocation
Item 18 Capital Stock and Other Securities Not Applicable
Item 19 Purchase, Redemption and
Pricing of Securities Being Offered Purchase, Redemption and
Pricing of Securities
Item 20 Tax Status Not Applicable
Item 21 Underwriters Not Applicable
Item 22 Calculation of Performance Data Additional Performance
Information
Item 23 Financial Statements Not Applicable
Form N-1A Part C
- ----------------
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Post-Effective Amendment to
the Registration Statement.
<PAGE>
LINDNER INVESTMENTS:
7711 Carondelet Ave.
P.O. Box 11208
St. Louis, Missouri 63105
(800) 995-7777
Institutional and Investor Shares of
LINDNER HIGH-YIELD BOND FUND
Lindner Investments (the "Trust") is a no-load, open-end management
investment company presently consisting of eight separate investment
portfolios: four series whose primary investment objective is current
income--Lindner Dividend Fund, Lindner Utility Fund, Lindner High-Yield Bond
Fund and Lindner Government Money Market Fund, and four series whose primary
investment objective is capital appreciation--Lindner Growth Fund, Lindner
Bulwark Fund, Lindner/Ryback Small-Cap Fund and Lindner International Fund.
Each series of the Trust represents a separate investment portfolio with its
own investment policies and objectives. This Prospectus relates only to
shares of Lindner High-Yield Bond Fund (the "Fund"). The Trust may offer
additional series or classes of shares in order to meet a range of
investment needs. Any additional series of the Trust will also represent a
separate investment portfolio with its own investment policies and
objectives.
The investment objective of the Lindner High-Yield Bond Fund is to produce
maximum current income. The Fund seeks to achieve this objecive by
investing primarily in high-yielding, high risk corporate bonds and notes
that are generally unrated or carry ratings lower than those assigned to
investment grade bonds by Standard & Poor's Ratings Group ("S&P") or Moody's
Investors Service, Inc. ("Moody's"). An investment in the Fund is
appropriate for you only if you can bear the high risk inherent in investing
in such securities. Of course, there can be no assurance that the Fund will
meet its objective.
The Fund will invest up to 100% of its portfolio in lower-rated bonds,
commonly referred to as "junk bonds", which are subject to a greater risk of
loss of principal and interest than higher rated investment grade bonds.
Purchasers should carefully assess the risks associated with an investment
in the Fund. See "Investment Objective, Policies and Risks".
The Fund will offer two classes of shares: Investor Shares and
Institutional Shares. The classes are identical except as to services
offered to and expenses borne by each class. Investor Shares are offered to
the public without any sales charge, load or 12b-1 fees. Institutional
Shares bear certain costs pursuant to a Distribution and Service Plan
adopted in accordance with Rule 12b-1 under the Investment Company Act of
1940, and are offered to financial and other institutions for the benefit of
fiduciary, agency or custodial accounts.
This Prospectus sets forth concisely information about the Fund which a
prospective investor should know before investing. It is important that you
read it carefully before you to decide to invest. This Prospectus should be
retained for future reference. A Statement of Additional Information
("SAI") about the Fund, dated April 12, 1998, has been filed with the
Securities and Exchange Commission ("SEC") and is incorporated into this
Prospectus by reference. A copy of the SAI is available without charge,
upon request to the address or telephone number listed above. In addition,
the SAI, other information incorporated by reference in this Prospectus and
in the SAI and other information regarding companies that file
electronically with the SEC are available from the SEC's Internet Web site,
the address of which is http://www.sec.gov.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
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 12, 1998<PAGE>
<PAGE> 2
TABLE OF CONTENTS
FUND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
LINDNER INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
INVESTMENT OBJECTIVE, POLICIES AND RISKS . . . . . . . . . . . . . . . . . .4
MANAGEMENT OF THE TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . .7
DIVIDENDS, DISTRIBUTION AND TAXES. . . . . . . . . . . . . . . . . . . . . 10
WITHHOLDING CERTIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 11
PURCHASE OF SHARES AND SHAREHOLDER INQUIRIES . . . . . . . . . . . . . . . 11
REDEMPTION OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
EXCHANGING AN INVESTMENT FROM ONE FUND TO ANOTHER. . . . . . . . . . . . . 16
AUTOMATIC INVESTMENT PLAN. . . . . . . . . . . . . . . . . . . . . . . . . 18
PAYROLL DEDUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SYSTEMATIC WITHDRAWAL PLAN . . . . . . . . . . . . . . . . . . . . . . . . 18
INDIVIDUAL RETIREMENT ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . 19
PRICING OF SHARES FOR PURCHASE OR REDEMPTION . . . . . . . . . . . . . . . 19
DISTRIBUTION AND SERVICE PLAN. . . . . . . . . . . . . . . . . . . . . . . 20
PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
COUNSEL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
APPENDIX--DESCRIPTION OF BOND RATINGS. . . . . . . . . . . . . . . . . . . 23
FUND EXPENSES
Lindner Investments (the "Trust") will offer Investor Shares in the Fund on
a no-load basis, without any front-end or back-end sales commission, without
any 12b-1 plan charges, and without any redemption fee. The Trust will
offer Institutional Shares in the Funds to broker-dealers, banks, retirement
plan sponsors, other financial intermediaries and financial planners also on
a no-load basis, without any front-end or back-end sales commission or any
redemption fee, but the Institutional Shares will pay a distribution and
service fee, pursuant to a Distribution and Service Plan adopted pursuant to
Rule 12b-1, in an amount not to exceed 0.25% of the average daily net assets
of the Institutional Shares outstanding from time to time.
Shareholder Transaction Expenses
Maximum sales load imposed on purchases. . . . . . . . . . . . . . . . . NONE
Maximum sales load imposed on reinvested dividends . . . . . . . . . . . NONE
Deferred sales load. . . . . . . . . . . . . . . . . . . . . . . . . . . NONE
Redemption fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NONE
Exchange fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NONE
Wire transfer fee (per requested transaction, subject to
change based upon charges incurred or levied by the Fund's
Custodian for outgoing wires) (see "Purchase of Shares
and Shareholder Inquiries" and "Redemption of Shares") . . . . . . . . . .$10
<PAGE> 3
Annual Fund Operating Expenses
(as a percentage of average net assets)
Total
Management 12b-1 Other Operating
Fees Fees Expenses(1) Expenses(2)
---------- ----- ----------- -----------
Lindner High-Yield Bond Fund:
Investor Shares 0.--% None 0.--% -.--%
Institutional Shares 0.--% 0.25% 0.--% -.--%
- ------------
(1) Includes an administration fee of 0.20% of the Fund's average daily net
assets, payable to Ryback Management as the Fund's administrator.
(2) Ryback Management has agreed to waive a portion or all of its
management and/or administration fees through the end of the fiscal year
ending June 30, 1999, in order to assure that Total Operating Expenses for
the Fund do not exceed the percentages estimated above. This waiver is a
voluntary one, and may be discontinued at any time.
Example: You would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) redemption at the end of each time
period:
1 year 3 years 5 years 10 years
------ ------- ------- --------
Lindner High-Yield Bond Fund
Investor Shares $ $ $ $
Institutional Shares $ $ $ $
The purpose of the above table is to assist investors in understanding the
various costs and expenses that an investor in the Fund will bear, directly
or indirectly. The percentages shown above for annual Fund operating
expenses are estimates based on amounts incurred by other funds managed by
the Fund's Adviser. For a more complete discussion of the expenses
connected with an investment in the Fund and the services provided to the
Funds, see "Management of the Trust." The example should not be considered
a representation of the past or future performance or expenses of any fund.
Actual expenses may be greater or less than those shown.
LINDNER INVESTMENTS
Lindner Investments (the "Trust") is an open-end no-load management
investment company, an arrangement whereby a number of persons invest in a
company which itself invests in securities and other assets. This kind of
arrangement is commonly called a mutual fund. The Trust was organized under
the laws of the Commonwealth of Massachusetts on July 20, 1993, and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Trust was organized
under a Declaration of Trust which permits the Board of Trustees to issue an
unlimited number of full and fractional shares and to create an unlimited
number of series of shares. The Fund is a series of the Trust. The Trust's
principal office is located at 7711 Carondelet Avenue, St. Louis, Missouri
63105.
The Trust presently offers shares of beneficial interest in eight separate
investment portfolios (each is referred to as a "Series"). Each Series has
its own investment objective and investment policies designed to fulfill
that objective, thus enabling the Trust to meet a wide range of investment
needs. The assets and liabilities of each Series belong only to, and are
borne only by, that Series and no other.
<PAGE> 4
Investor Shares and Institutional Shares are identical, except that
Institutional Shares are subject to an annual distribution and service fee
at a rate not to exceed 0.25% of the value of the average daily net assets
of Institutional Shares. The fee is payable for advertising, marketing and
distributing the Institutional Shares and for ongoing services relating to
the maintenance of shareholder accounts for Institutional Shares pursuant to
the Distribution and Service Plan adopted in accordance with Rule 12b-1
under the 1940 Act. See "Distribution and Service Plan" and "Fund
Expenses". The distribution and service fee paid by Institutional Shares
will cause Institutional Shares to have a higher expense ratio which will
result in the payment of lower dividends than those paid on Investor Shares.
When used in this prospectus and in the statement of additional information
with respect to institutional shares, the terms "investor" and "shareholder"
refer to the institution purchasing institutional shares and do not refer to
any individual or entity for whose account the institution may purchase or
hold institutional shares. Such institutions have agreed to transmit copies
of this Prospectus and all relevant Fund materials, including any proxy
materials and annual and semi-annual reports, to each individual or entity
for whose account the institution purchases Institutional Shares, to the
extent required by law.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The objective of the Fund is to produce maximum current income. The Fund
seeks to achieve its objective by following a policy of investing in a
diversified range of high-yield, high-risk, medium and lower quality
corporate bonds and notes, commonly referred to as "junk bonds." Generally,
bonds and notes providing the highest yield are unrated or carry lower
ratings (Baa or lower by Moody's or BBB or lower by S&P) than those assigned
by S&P or Moody's to investment-grade bonds and notes. The Fund may also
invest a portion of its assets in securities not paying current income if
the Adviser believes that dividend or interest payments on such securities
are likely to be restored in the foreseeable future. A description of the
S&P and Moody's rating categories is set forth in the Appendix to this
Prospectus. While providing higher yields, these bonds and notes are
subject to greater risks of loss of principal and income than higher-rated
bonds and notes and are considered to be predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal. They
are also generally considered to be subject to greater price volatility due
to market risks than higher-rated bonds and notes. There can be no
assurance that the Fund's investment objective will be attained.
The amount of outstanding high-yield, lower-rated corporate securities has
recently proliferated. Based on industry estimates, the market grew from
$20 billion in outstanding securities to an excess of $300 billion,
principally over the past ten years, a period of national economic
expansion. An economic downturn could adversely impact issuers' abilities
to pay interest and repay principal and could result in issuers' defaulting
on such payments. The value of the Fund's bonds and notes will be affected
like all fixed-income securities by market conditions relating to changes in
prevailing interest rates. However, the value of lower-rated or unrated
corporate bonds and notes is also affected by investors' perceptions. When
economic conditions appear to be deteriorating, lower-rated or unrated
corporate bonds and notes may decline in market value due to investors'
heightened concerns and perceptions over credit quality. If a security is
downgraded, the Fund may retain the security. The Fund will invest in "zero
coupon" (interest payments accrue until maturity) and "pay-in-kind"
(interest payments are made in cash or additional shares) bonds. Such
securities may be subject to greater fluctuations in value as they tend to
be more speculative than income bearing securities. Fluctuations in the
market prices of the securities owned by the Fund result in corresponding
fluctuations and volatility in the net asset value of the shares of the
Fund. Additionally, because they do not
<PAGE> 5
pay current income, these securities will detract from the Fund's objective
of producing maximum current income.
Lower-rated and unrated corporate bonds and notes in which the Fund invests
are traded principally by dealers in the over-the-counter market. The
market for these securities may be less active and less liquid than for
higher-rated securities. Under adverse market or economic conditions, the
secondary market for these bonds and notes could contract further, causing
the Fund difficulties in valuing and selling the securities in its
portfolio.
The ratings of fixed-income securities by Moody's and S&P are a generally
accepted barometer of credit risk. They are, however, subject to certain
limitations from an investor's standpoint. The rating on an issuer is
heavily weighted by past developments and does not necessarily reflect
probable future conditions. There is frequently a lag between the time the
rating is assigned and the time it is updated. In addition there may be
varying degrees of difference in credit risk of securities within each
rating category.
The Adviser will try to minimize the risk inherent in the Fund's investment
objective through credit analysis, diversification and attention to current
developments and trends in interest rates and economic conditions. However,
there can be no assurance that losses will not occur and an investment in
the Fund is appropriate for an investor only if the investor can bear the
high risk inherent in seeking maximum current income by investing in high-
yielding corporate bonds and notes which are unrated or carry lower ratings
than those assigned by S&P or Moody's to investment-grade bonds.
Except for temporary defensive purposes, at least 65% of the value of the
Fund's total assets will be invested in high-yielding, income-producing
corporate bonds. This investment policy is a fundamental policy and may not
be changed by the Trustees of the Fund without the vote of a majority of the
Fund's outstanding voting securities. The Fund may invest up to 35% of the
value of its total assets in a range of high-yield, medium and lower quality
corporate notes; short-term money market instruments, including certificates
of deposit of banks having total assets of more than $1 billion and which
are members of the FDIC, bankers' acceptances and interest-bearing savings
or time deposits of such banks; commercial paper of prime quality, rated A-1
or higher by S&P or Prime-1 or higher by Moody's or, if not rated, issued by
companies which have an outstanding debt issue rated AA or higher by S&P or
Aa or higher by Moody's; securities guaranteed or insured by the U.S.
Government, its agencies and instrumentalities; and other income-producing
cash items. The Fund may invest temporarily for defensive purposes without
limit in the foregoing securities.
Equity Securities. In accordance with its objective of producing maximum
current income, the Fund may invest up to 20% of its total assets in common
stocks, convertible or non-convertible preferred stocks, including non-
investment grade preferred stock, and other securities having the
characteristics of equity securities. Certain preferred stock issues may
offer higher yields than similar bond issues because their rights are
subordinated to the bonds. Consequently, such preferred stock issues will
have a greater risk potential. The Adviser will try to minimize this
greater risk potential through its investment process. However, there can
be no assurance that losses will not occur and, as stated above, an
investment in the Fund is appropriate only for an investor who can bear the
high risk in seeking maximum current income by investing in high-yielding
securities, including non-investment grade preferred stocks.
Foreign Securities. The Fund may invest up to 10% of its total assets in
securities of foreign issuers. Foreign investments may be affected
favorably or unfavorably by changes in currency rates and exchange control
regulations. There may be less information available about a foreign
company than about a U.S.
<PAGE> 6
company, and foreign companies may not be subject to reporting standards and
requirements comparable to those applicable to U.S. companies. Foreign debt
securities and their markets may not be as liquid as U.S. securities and
their markets. Securities of foreign companies may involve greater market
risk than securities of U.S. companies, and foreign brokerage commissions
and custody fees are generally higher than in the United States. Investments
in foreign debt securities may also be subject to local economic or
political risks, such as political instability of some foreign governments
and the possibility of nationalization of issuers.
Illiquid Securities. The Fund may invest up to 15% of its net assets in
illiquid securities, including restricted securities (i.e., securities not
readily marketable without registration under the Securities Act of 1933
(the "1933 Act")) and other securities that are not readily marketable,
such as repurchase agreements of more than one week's duration. The Fund
may purchase restricted securities that may be offered and sold only to
"qualified institutional buyers" under Rule 144A of the 1933 Act, and the
Adviser, acting pursuant to procedures approved by the Fund's Board of
Directors, may determine, when appropriate, that specific Rule 144A
securities are liquid and not subject to the 15% limitation on illiquid
securities. Should this determination be made, the Adviser, acting pursuant
to such procedures, will carefully monitor the security (focusing on such
factors, among others, as trading activity and availability of information)
to determine that the Rule 144A security continues to be liquid. It is not
possible to predict with assurance exactly how the market for Rule 144A
securities will further evolve. This investment practice could have the
effect of increasing the level of illiquidity in the Fund, if and to the
extent that qualified institutional buyers become for a time uninterested in
purchasing Rule 144A securities.
Borrowing; Leverage. The Fund may borrow money from banks for temporary or
emergency purposes and for the purchase of portfolio securities, in an
amount not to exceed 15% of the value of its total assets (including the
amount borrowed).
Lending of Portfolio Securities. The Fund may lend portfolio securities to
brokers or dealers, banks or other institutional borrowers of securities.
The borrower must maintain with the Fund cash or equivalent collateral such
as Treasury bills or other marketable securities acceptable to the Adviser,
equal to at least 100% of the market value of the securities loaned. During
the time portfolio securities are on loan, the borrower pays the Fund any
income accruing on the loaned securities and the Fund may invest the cash
collateral and earn additional income or may receive an agreed upon amount
of interest income from the borrower. The Fund may lend portfolio
securities to the extent that the Adviser deems appropriate in seeking to
achieve the Fund's investment objective.
Repurchase Agreements. The Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term.
A repurchase agreement is an agreement under which the Fund acquires a money
market instrument, generally a U.S. Government obligation qualified for
purchase by the Fund, subject to resale at an agreed upon price and date.
Such resale price reflects an agreed upon interest rate effective for the
period of time the instrument is held by the Fund and is unrelated to the
interest rate on the instrument. Repurchase agreements could involve
certain risks in the event of bankruptcy or other default by the seller,
including possible delays and expenses in liquidating the securities
underlying the agreement, decline in value of the underlying securities and
loss of interest. Repurchase agreements usually are for short periods, such
as one week or less, but may be for longer periods.
When-Issued Securities. The Fund may purchase securities on a when-issued
basis, in which case delivery and payment normally take place within 45 days
after the date of the commitment to purchase. The payment obligation and
the interest rate that will be received on the securities are each fixed at
the time the
<PAGE> 7
buyer enters into the commitment. Although the Fund will only purchase a
security on a when-issued basis with the intention of actually acquiring the
securities, the Fund may sell these securities before the purchase
settlement date if it is deemed advisable.
Securities held by the Fund and securities purchased on a when-issued basis
are subject to changes in market value based upon investors' perceptions of
the creditworthiness of the issuer and upon changes, real or anticipated, in
the level of interest rates. If the Fund remains substantially fully
invested at the same time that it has purchased securities on a when-issued
basis, the market value of the Fund's assets may fluctuate more than would
otherwise be the case. Purchasing a security on a when-issued basis can
involve a risk that the yields available in the market when the delivery
takes place may be higher than those obtained on the security so purchased.
An account for the Fund consisting of cash or liquid high-grade debt
securities equal to the amount of the when-issued commitments will be
established with the Fund's Custodian, and marked to market daily, with
additional cash or liquid high-grade debt securities added when necessary.
When the time comes to pay for when-issued securities, the Fund will meet
its obligations from then available cash flow, sale of securities held in
the separate account, sale of other securities or, although the Fund would
not normally expect to do so, from the sale of the when-issued securities
themselves (which may have a value greater or less than the Fund's payment
obligations). Sale of securities to meet such obligations carries with it a
greater potential for the realization of capital gain or loss.
General. Except as noted above or in the SAI, the foregoing investment
policies are not fundamental and the Trustees of the Fund may change such
policies without the vote of a majority of the outstanding voting
securities of the Fund. As a matter of policy, the Trustees will not change
the Fund's investment objective of producing maximum current income without
such a vote. Under the 1940 Act, a "vote of a majority of the outstanding
voting securities" of the Fund means the affirmative vote of the lesser of
(1) more than 50% of the outstanding shares of the Fund or (2) 67% or more
of the shares of the Fund present at a shareholders' meeting if more than
50% of the outstanding shares of the Fund are represented at the meeting in
person or by proxy.
MANAGEMENT OF THE TRUST
The Fund is a separate series of Lindner Investments (the "Trust") which is
an open-end management investment company registered under the 1940 Act.
The business and affairs of the Funds are managed under the direction of the
Trust's Board of Trustees. Information about the Trustees and executive
officers of the Trust may be found in the SAI.
Investment Adviser
Ryback Management Corporation ("Ryback Management" or the "Adviser") serves
as investment adviser to the Fund. Ryback Management is also the
Administrator, Transfer Agent, and Dividend Disbursing Agent for the Fund.
The Adviser is a Michigan corporation formed in 1992. In 1993, the Adviser
acquired the assets and business of Lindner Management Corporation, which
had served as the adviser to the Lindner Fund, Inc., and the Lindner
Dividend Fund, Inc., since their inception, predecessor funds to the Lindner
Dividend Fund series and the Lindner Growth Fund series of the Trust. The
Adviser's business address is 7711 Carondelet Avenue, Suite 700, St. Louis,
Missouri 63105. The Adviser is registered as an investment adviser and as a
stock transfer agent with the Securities and Exchange Commission. Ryback
<PAGE> 8
Management is controlled by the George F. Valassis Stock Trust u/a dated
March 11, 1997 (the "Valassis Trust") and certain other trusts established
for the benefit of Mr. Valassis's family members, which as of January 31,
1998 collectively owned 65% of the voting securities of the Adviser. The
remaining 35% of the stock of the Adviser is owned by Eric Ryback, the
President of the Adviser. As of January 15, 1998, the Adviser managed over
$3.6 billion of assets.
Ryback Management has authorized any of its directors, officers, and
employees who have been elected as officers or Trustees of the Trust to
serve in the capacities to which they have been elected. All services
furnished to the Trust by Ryback Management may be furnished through the
medium of any of its directors, officers, or employees. Ryback Management
bears the salaries and expenses of all of its personnel providing services
to the Trust and all expenses incurred by Ryback Management in connection
with administering the ordinary course of the Trust's business, other than
those assumed by the Trust.
Portfolio Manager. Eric E. Ryback is the portfolio manager of the Fund. My
Ryback has been the manager of Lindner Dividend Fund and its predecessor
since 1984, a co-manager of Lindner Bulwark Fund since its inception in
February 1994, co-manager of Lindner Growth Fund and its predecessor since
1984, co-manager of Lindner Utility Fund since its inception in 1993, co-
manager of Lindner/Ryback Small-Cap Fund since its inception in 1994, and
co-manager of Lindner International Fund since its inception in January
1995.
Under its Advisory Agreement with the Trust, the Adviser provides the Fund
with investment advisory services, in exchange for which the Fund pays the
Adviser a monthly management fee (before reimbursement of expenses to the
Fund, if any) equal to 1/12th of 0.__% of the average daily net assets of
the Fund.
Code of Ethics. Officers, directors and employees of the Adviser are
permitted to engage in personal securities transactions, subject to the
Trust's Code of Ethics (the "Ethics Code"). The Ethics Code proscribes
certain practices with regard to personal securities transactions and
personal dealings, provides a framework for the reporting and monitoring of
personal securities transactions to the Adviser's President (or his
designee), and sets forth a procedure of identifying, for disciplinary
action, those individuals who violate the Ethics Code. The Ethics Code
prohibits each of the officers, and Trustees and all Investment Managers of
the Trust from purchasing or selling any security that the officer, director
or employee knows or believes (i) is being considered for purchase or sale
by any series of the Trust, or (ii) is being purchased or sold by any series
of the Trust, including the Fund. The Ethics Code also prohibits each
Investment Manager from (i) purchasing or selling any security within seven
calendar days of the purchase or sale of the security by any series of the
Trust, including the Fund for which the Investment Manager manages, (ii)
engaging in short-term trading (a purchase and sale or vice-versa within 60
days), (iii) purchasing securities for his own account during an initial or
secondary public offering, (iv) purchasing securities in a private placement
by a publicly-owned company with prior approval by the Adviser's President,
or (iv) purchasing or selling any security for his own account without first
obtaining the express approval of the Adviser's President. Any profit
realized pursuant to these prohibitions must be disgorged. Officers,
Trustees and Investment Managers are required to direct their broker to
forward duplicate copies of all trade confirmations and periodic account
statements to the Adviser's President. All officers, Trustees and
Investment Manager are also required to disclose all securities beneficially
owned by them on December 31 of each year.
<PAGE> 9
Administrator
Ryback Management has also entered into an Administration Agreement with the
Fund, pursuant to which Ryback Management provides the Fund with office
space and personnel, pays the salaries and fees of the Trust's officers and
directors who are interested persons of the Trust, the charges for all
clerical services relating to the Fund's investments, and all promotional
expenses of the Fund, including the printing and mailing of the prospectus
to persons other than current shareholders. For these administrative
services, the Fund pays Ryback Management a monthly administration fee equal
to 1/12th of 0.__% of the average daily net assets of the Fund.
The Fund pays all of its other costs and expenses including interest, taxes,
fees of directors who are not interested persons of the Trust,
administrative expenses related directly to the issuance and redemption of
shares (such as expenses of registering or qualifying shares for sale,
charges of custodians, transfer agents, and registrars), costs of printing
and mailing reports and notices to shareholders, charges for auditing
services and legal services, and other fees and commissions of every kind
not expressly assumed by Ryback Management, as the administrator for the
Fund.
Transfer and Dividend Paying Agent
Ryback Management acts as the Fund's transfer and dividend paying agent.
Ryback provides these services under an Agency Agreement approved by the
initial shareholder of the Fund on March __, 1998. Under the Agency
Agreement the Fund pays Ryback Management a fee of $__.00 per shareholder
account per year, plus reimbursement of all out-of-pocket costs.
Custodians
Star Bank, Cincinnati, Ohio, acts as custodian of all cash and domestic
securities of the Fund. Star Bank receives a monthly fee for the Fund based
on monthly average net assets of the Fund, which fee is allocated among the
Funds on the basis of their net asset value. Star Bank also receives
compensation for costs associated with clearing redemption drafts, and for
its standard bank charges for processing lock box deposits, processing
redemption drafts, and performing other banking services. The Chase
Manhattan Bank ("Chase") serves as the Fund's custodian of foreign
securities. Chase charges custodian fees on a sliding scale depending on
the countries in which the Fund is invested. Charges for options and
futures contracts are made on a per transaction basis. The Custodians are
also responsible for the settlement of security trades and the collection of
dividends and interest due the Fund. Their custody does not involve advice
or decisions as to the purchase or sale of portfolio securities.
Independent Auditors
Deloitte & Touche LLP, independent auditors, St. Louis, Missouri, provides
regular audit services to the Trust and the Fund. Regular audit services
include, but are not limited to, audits of the annual financial statements
of the Fund and consultations relating to accounting and financial
reporting.
<PAGE> 10
DIVIDENDS, DISTRIBUTION AND TAXES
Payment of Dividends and Distributions
The policy of Lindner High-Yield Bond Fund is to distribute substantially
all of its net investment income through the payment of quarterly dividends
generally declared in March, June, September and December, within 15 days
after the respective record dates. Net realized capital gains, if any, will
be distributed by the Fund in December, following the end of its fiscal
year.
Dividends paid by each class of the Fund will be calculated at the same time
and in the same manner, except that the expenses attributable solely to
either the Investor Shares or to the Institutional Shares will be borne
solely by that class. Institutional Shares will receive lower per share
dividends than Investor Shares because of the higher expenses borne by the
Institutional Shares. See "Fund Expenses" and "Distribution and Service
Plan".
The Fund's fiscal year ends on June 30. However, a mutual fund is required
to distribute on a calendar year basis at least 98% of its ordinary income
for each calendar year and 98% of net capital gains realized (if any) in the
12 month period beginning November 1 and ending October 31 in order to avoid
an excise tax. Therefore, the Fund may declare additional dividends from
net investment income and from net realized capital gains in each December.
If the Fund declares a dividend and/or capital gain distribution in October,
November, or December made payable to shareholders of record in such month
which is paid during January of the following year, such distribution is
considered taxable income to the shareholder on December 31 of the year in
which the distribution is declared.
The Fund will automatically reinvest dividends and capital gain
distributions in additional Fund shares at the net asset value determined as
of the closing of the New York Stock Exchange on the day following the
record date for such dividends or distributions, unless the holder by
written notice received no later than the record date indicates his
intention to receive such dividend or distribution in cash.
Taxation of Dividends and Distributions
The Fund intends to qualify as a "regulated investment company" under the
Internal Revenue Code by distributing as dividends not less than 90% of its
taxable income plus 90% of its net tax exempt income and by continuing to
comply with all other requirements of Subchapter M of the Code. The Fund
will not be liable for federal income taxes to the extent it distributes its
taxable income. If the Fund did not maintain its qualification as a
regulated investment company, it would be subject to federal income tax in
the same manner as a regular corporation. The Fund also intends to
distribute substantially all capital gains and ordinary income and thus
avoid imposition of the excise tax on regulated investment companies that
fail to distribute sufficient ordinary income and capital gain within each
calendar year.
Shareholders generally are liable for federal income taxes on the income
dividends and capital gain distributions of the Fund (whether or not
reinvested in shares of the Fund). However, shareholders not subject to tax
on their income will not be required to pay tax on amounts distributed to
them. Shareholders should also note that in certain cases the Fund will be
required to withhold 31% of dividends or sale proceeds otherwise due to a
shareholder (see "Withholding Certification").
<PAGE> 11
For federal income tax purposes, distributions will be taxable as ordinary
income to the extent derived from the Fund's investment income and net
short-term capital gains. Pursuant to the Taxpayer Relief Act of 1997, two
different tax rates apply to distributions of net capital gains. One rate
(generally, 28%) applies to net gains on capital assets held for more than
one year but less than 18 months ("mid-term gains") and a second, preferred
rate (generally 20%) applies to net gains on capital assets held for more
than 18 months ("adjusted net capital gains") . Distributions of net
capital gains will be treated in the hands of shareholders as mid-term gains
to the extent designated by the Fund as deriving from net gains from assets
held for more than one year but not more than 18 months, and the balance
will be treated as adjusted net capital gains. Distributions of mid-term
gains and adjusted net capital gains will be taxable as such, regardless of
how long shares have been held.
Effect of Dividends and Distributions on Net Asset Value
Any dividends or capital gains distributions paid shortly after a purchase
of shares by an investor will have the effect of reducing the per share net
asset value of his shares by the amount of the dividends or distributions.
All or a portion of such dividends or distributions, although in effect a
return of capital, are subject to taxes, which may be at ordinary income tax
rates.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
WITHHOLDING CERTIFICATION
Before the Fund will establish a new account or effect registration changes
in an existing account, a shareholder must certify to the Fund on Internal
Revenue Service Form W-9 the shareholder's taxpayer identification number
and certify that the shareholder is not subject to withholding of dividend
payments due to past under-reporting of such payments. The Fund is required
by statute to withhold 31% of a shareholder's reportable distributions
("backup withholding") if (i) a shareholder fails to certify as to his
taxpayer identification number, (ii) a shareholder fails to certify that he
is not subject to withholding, (iii) the Internal Revenue Service notifies
the Fund that a shareholder has furnished an incorrect taxpayer
identification number, or (iv) the Internal Revenue Service notifies the
Fund that a shareholder has under reported interest or dividends in the
past. Investors may use the certification statement on the "Share Purchase
Application" in lieu of IRS Form W-9 when establishing a new account.
Dividends to shareholders who are non-resident aliens may be subject to a
30% United States withholding tax unless a reduced rate of withholding
exemption is provided by treaty. Non-resident investors are urged to
consult their own tax advisers concerning the applicability of the United
States withholding tax.
PURCHASE OF SHARES AND SHAREHOLDER INQUIRIES
Investors may purchase Investor Shares directly from the Fund at the per
share net asset value for shares of that class of the Fund. Institutional
investors who have written distribution or service agreements with the Trust
or Ryback may purchase Institutional Shares directly from the Fund at the
per share net asset value for shares of that class of the Fund. The Fund
determines net asset value per share once daily. Purchase at net asset
value means the net asset value as next determined after the Fund receives a
purchase order. The purchase of shares of Investor Shares through
broker-dealers or other financial institutions may be subject to a service
fee by those entities. Such entities have the responsibility of submitting
the purchase order to the Fund prior to the Fund's next determination of net
asset value per share in order to obtain the purchase
<PAGE> 12
price that would be applicable if the order had been placed directly with
the Fund. Broker-dealers or other financial institutions may be liable to
an investor for any losses arising from their failure to timely communicate
purchase orders to the Fund. See "Pricing of Shares for Purchase or
Redemption".
Subject to the requirements of the 1940 Act, the Fund, at its discretion,
may issue Investor Shares in exchange for acceptable quantities of publicly
traded securities meeting the Fund's criteria for purchase or retention.
Such an exchange will result in a taxable transaction to the person
acquiring any shares of the Fund. The Fund may similarly issue Investor
Shares in connection with any merger or consolidation with or acquisition of
the assets of any other investment company or trust.
Establishing a New Account
In order to establish a new account with the Fund, a written "Share
Purchase Application" for the purchase of shares must be submitted to
Lindner Investments, P.O. Box 11208, St. Louis, Missouri 63105.
Shareholders using an overnight form of delivery (e.g., Express Mail) should
address their applications to 7711 Carondelet Ave., Ste. 700, St. Louis,
Missouri 63015, to insure prompt delivery. Shareholders should direct their
inquiries regarding any other matter to the post office box address.
All applications to purchase shares are subject to acceptance or rejection
by authorized officers of the Fund and are not binding until accepted.
Applications will not be accepted unless they are accompanied by payment in
U.S. funds. Payment should be made by check drawn on a U.S. bank, savings
and loan or credit union. The Custodian will charge a $15 fee against a
shareholder's account for any payment check returned to the Custodian for
insufficient funds, and the investor involved will be responsible for any
loss incurred by the Fund. It is the policy of the Fund not to accept
applications under circumstances or in amounts considered disadvantageous
for shareholders. For example, if an individual previously tried to
purchase shares with a bad check, or the proper social security number or
taxpayer identification number is omitted, the Fund reserves the right not
to accept future applications from that individual. Any accounts (including
custodial accounts) opened without a proper social security number or
taxpayer identification number may be liquidated and distributed to the
owner(s) of record on the first business day following the 60th day of
investment, net of the back-up withholding tax amount.
The Fund does not consider the U.S. Postal Service or other independent
delivery services to be its agents. Therefore, deposit in the mail or with
such services of purchase applications does not constitute receipt by the
Fund. Correspondence intended for overnight courier should not be sent to
the Post Office Box address.
The minimum initial purchase for Investor or Institutional Shares of the
Fund is $3,000. Subsequent purchases of shares of either class of the Fund
must be in amounts of at least $250 except in the case of dividend
reinvestment.
Shareholders who maintain the minimum investment in at least one account may
open additional accounts in any fund with a minimum of $500. Where such
additional accounts will be registered as a Uniform Gift to Minors (UGMA) or
a Uniform Transfer to Minors (UTMA), the minimum investment for any fund is
$250.
Additional Purchases
Additional purchases may also be made by one of the following methods:
<PAGE> 13
By Mail. Investors may make additional purchases by mailing the remittance
slip, which is attached to an account confirmation statement, or by sending
a letter indicating that the investor would like to purchase shares of
either class of the Fund and indicating the name(s) in which the account is
registered, and the account number, together with a check payable to Lindner
Investments to the following address: Lindner Funds, P.O. Box 640672,
Cincinnati, Ohio 45264-0672.
By Automated Clearing House. See also "Automatic Investment Plan" and
"Payroll Deduction". Shareholders may request purchase of shares by
Automated Clearing House (ACH), a free electronic transfer service. It
takes 15 days from the date we receive your request to establish ACH. Once
ACH is in place, investors may call or write to purchase shares via ACH.
ACH purchases in a given account may not exceed the current value of that
account. ACH purchases will be debited the day of the order. Please make
sure that the funds are available. A fee will be applied to all returned
ACH purchases. Call Customer Service at (800) 995-7777 or (314) 727-5305
for a form to establish ACH.
By Wire. Shareholders may purchase additional shares of either class by
wiring the amount of a purchase to the Fund's domestic custodian, Star Bank,
N.A. Prior to sending a wire, call the Customer Service Department at (800)
995-7777 or (314) 727-5305. The wire must be received by 4:00 p.m., Eastern
Time to receive that business day's closing price. Your bank may charge a
fee to wire funds. For purchases under $1,000, we will deduct a wire fee
from the monies wired.
By Telephone. Provided a shareholder has elected to establish telephone
privileges with the Fund (see "Share Purchase Application"), a shareholder
may purchase additional shares of either Class, in an amount not to exceed
the current balance in his account, by prepaid telephone call to the Fund at
(800) 995-7777. Payment must be received no later than five days after the
date on which the purchase was effected. If payment is not received within
the time required, the order will be subject to cancellation and the
shareholder will be responsible for any loss incurred.
The Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures may include, among
others, requiring some form of personal identification prior to acting upon
telephonic instructions, providing written confirmations of all such
transactions, and/or tape recording all telephonic instructions. If
procedures such as the above are not followed, Ryback Management and the
Fund may be liable for losses, costs, or expenses for acting upon an
investor's telephone instructions. Ryback Management will have authority,
as agent, to redeem shares in the account to cover any such loss. As a
result of this policy, the investor will bear risk of any loss unless the
Fund has failed to follow procedures such as the above.
Additional Information About Investments in the Fund
The Transfer Agent will send a confirmation after each transaction affecting
a shareholder's account. Dividend payments and reinvestments will be
reflected on a shareholder's quarterly consolidated statement. Any
discrepancies should be brought to the attention of the Transfer Agent
within 30 days of receipt. In addition, upon receipt of a written request
signed by all account owners and a $25.00 fee for each account researched,
the Transfer Agent will provide a listing of the shareholder's account
history. Checks should be payable to "Ryback Management". Due to extreme
volume during certain times of the year, requests for account histories may
take two to three weeks for delivery. All requests are completed on a first-
come, first-served basis.
<PAGE> 14
Once a shareholder has mailed, telephoned or otherwise transmitted
investment instructions to the funds, it may not be modified or canceled.
The Fund cannot accept investments specifying a certain price or date and
will not honor such requests.
Issuing Certificates
Certificates will not be issued for shares unless requested in writing with
all owners' signatures. Certificates will be issued for full shares only
and cannot be issued to a third party. Certificates are not available for
IRA accounts. A shareholder cannot redeem certificated shares unless he
surrenders the certificates to the Fund. A certificate will not be issued
until 15 days after a purchase, or if the Fund has proof of payment. There
is no charge for issuing certificates.
Processing Intermediaries
Shares of the Fund may be purchased through certain broker-dealers,
financial institutions or other service providers ("Processing
Intermediaries"). When shares of the Fund are purchased in this way, the
Processing Intermediary, rather than its customer, may be the shareholder of
record. Processing Intermediaries may use procedures and impose
restrictions in addition to or different from those applicable to
shareholders who invest in the Fund directly. An investor intending to
invest in the Fund through a Processing Intermediary should read the program
materials provided by the Processing Intermediary in conjunction with this
Prospectus. Processing Intermediaries may charge fees or other charges for
the services they provide to their customers. Investors who do not wish to
receive the services of a Processing Intermediary, or pay the fees that may
be charged for such services, may want to consider investing directly with
the Fund. Direct purchase or sale of shares of the Fund may be made without
a sales or redemption charge.
REDEMPTION OF SHARES
A shareholder may sell all or any part of his shares to the Fund for
redemption. The price at which the Fund redeems shares is the net asset
value per share as next computed after either (a) a written request is
received "in good order" at the office of the Fund or (b) a telephone
request is placed with the Fund by a shareholder who has established
Telephone Privileges. The value of shares on redemption may be more or less
than the investor's cost, depending on the market value of the portfolio
securities at the time of redemption.
A shareholder may redeem shares in the following manners:
By Mail. By written request addressed to:
Lindner Investments
P.O. Box 11208
St. Louis, MO 63105
A written redemption request is "in good order" if the request is properly
endorsed by all registered shareholders in the exact names in which the
shares are registered, accompanied by properly endorsed share certificates,
if any have been issued, and states the name of the Fund, the account
number, the exact name(s) of the shareholder(s) in which the account is
registered as shown on the latest confirmation, and the number of shares or
dollar amount to be redeemed.
<PAGE> 15
The following redemption requests must be in writing and must have
signatures guaranteed (including the signatures on any share certificate) by
a bank, trust company, savings and loan association, or a member of a
national stock exchange (a notary public is not an acceptable guarantor):
(1) redemptions on accounts that have requested an address change within the
preceding three months; (2) redemptions for which the proceeds are to be
sent to someone other than the registered shareholder(s) and/or to an
address other than the address of record; or (3) redemptions for which the
proceeds are to be wired and the wire instructions are different than those
previously submitted.
The following redemptions must be in writing, but do not require signature
guarantee (unless one of the above circumstances applies): (1) all IRA
accounts, and (2) redemptions of shares for which certificates have been
issued. IRA account redemptions must also be accompanied by Internal
Revenue Service Form W-4P. IRA redemption requests not accompanied by Form
W-4P will be subject to withholding. Additional documentation may be
required from corporations, executors, administrators, trustees, or
guardians.
If there is doubt as to what documents or instructions are necessary in
order to redeem shares, please write, or call the Fund at (800) 995-7777,
prior to submitting the redemption request. A redemption request will not
become effective until all documents have been received in good order by the
Fund. Redemptions cannot be accomplished by telegraphing the Fund. The
redemption price is the net asset value next computed after the time of
receipt by the Fund of the written request in good order set forth above.
The Fund reserves the right to hold payment up to 15 days or until satisfied
that investments made by check have been collected. During the period prior
to the time the shares are redeemed, dividends on such shares will accrue
and be payable, and an investor will be entitled to exercise all other
rights of beneficial ownership. Once a shareholder has requested a
redemption, it may not be modified or canceled.
By Telephone. By prepaid telephone call to the Fund at (800) 995-7777
requesting that the proceeds be mailed to the shareholder, provided that he
or she has previously established Telephone Privileges with the Fund (see
"Share Purchase Application") and has not requested an address change in the
preceding three months. The Funds reserve the right to refuse telephone
redemptions and may limit the amount involved or the number of telephone
redemptions. IRA accounts may not be redeemed by telephone. Once a
shareholder has placed a telephone redemption, it may not be modified or
canceled.
In addition to the requirements described in the preceding paragraph, the
Fund will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. Such procedures may include, among
others, requiring some form of personal identification prior to acting upon
telephonic instructions, providing written confirmations of all such
transactions, and/or tape recording all telephonic instructions. If
procedures such as the above are not followed, Ryback Managemnent and the
Fund may be liable for losses, costs, or expenses for acting upon an
investor's telephone instructions or for any unauthorized telephone
redemption. As a result of this policy, the investor will bear the risk of
any loss unless the Fund has failed to follow procedures such as the above.
Redemption Through Third Parties. The redemption of shares through
Processing Intermediaries broker-dealers or other financial institutions may
be subject to a service fee by those entities. Processing Intermediaries
may use procedures and impose restrictions in addition to or different from
those applicable to shareholders who invest in the Fund directly. An
investor should read the program materials provided by the Processing
Intermediary. A Processing Intermediary has the responsibility of
submitting a redemption request to the Fund prior to the Fund's next
determination of net asset value in order to obtain the redemption
<PAGE> 16
price that would be applicable if the request had been placed directly with
the Fund. A Processing Intermediary may be liable to an investor for any
losses arising from their failure to timely deliver redemption requests to
the Fund. See "Pricing of Shares for Purchase or Redemption".
Disbursement by Mail. The Fund will normally disburse payment by check
within five days after their receipt of a shareholder request for
redemption. A charge of $15 will be deducted from a shareholder's account
if a shareholder requests the redemption proceeds to be sent by overnight
delivery (e.g., express mail). Under the 1940 Act, the Fund may postpone
the date of payment for redeemed shares, or the Fund's obligation to redeem
its shares may be suspended, (1) for any period during which the New York
Stock Exchange is closed (other than customary week-end and holiday closing)
or during which trading on the Exchange is restricted (as determined by the
Securities and Exchange Commission), (2) for any period during which an
emergency exists (as determined by the Securities and Exchange Commission)
which makes it impracticable for the Fund to dispose of their securities or
to fairly determine the value of their net assets, or (3) for such other
periods as the Securities and Exchange Commission may by order permit for
the protection of shareholders.
By Wire. A shareholder may obtain the proceeds of a redemption by a bank
wire of Federal Funds if he has previously established Wire Privileges with
the Fund and provided the necessary information (see "Share Purchase
Application"). Under normal circumstances, the shareholder's Federal Funds
wire will be posted to his or her bank account the business day following
the date of the shareholder's redemption transaction. However, the Fund has
up to five days to disburse the proceeds. If the proceeds are wired to an
account at a bank that is not a member of the Federal Reserve System, there
could be a delay in crediting the funds to the bank account. A shareholder
will be required to pay a charge for wiring cost (currently, $10 per wire),
which will be deducted from the amount being wired.
By Automated Clearing House ("ACH"). A shareholder may obtain the proceeds
of a redemption by Automated Clearing House (ACH) funds if he or she has
previously established ACH Privileges with the Funds and provided the
necessary information (see "Share Purchase Application"). ACH is a
convenient electronic means of cash movement that is used by thousands of
individuals and corporations. Under normal circumstances, proceeds will be
posted to the shareholder's bank account the evening of the second business
day following the date of the shareholder's redemption transaction.
However, the Fund has up to five days to disburse the proceeds. Currently,
there are no fees for this service. In the case of recently purchased
shares, proceeds will not be mailed, sent by ACH or Federal Funds wire until
the Fund is satisfied that checks given in payment of shares being redeemed
have cleared, which may take up to 15 days.
Involuntary Redemption. In an attempt to reduce expenses, partly
attributable to maintaining small accounts, the Fund reserves the right to
redeem, upon 30 days' written notice, all of the shares of a shareholder
whose account has a net asset value of less than $3,000 due to the
shareholder's redemptions. During the 30-day notice period, the shareholder
may make an additional investment in an amount that will increase the value
of the account to at least $3,000.
EXCHANGING AN INVESTMENT FROM ONE FUND TO ANOTHER
General. Subject to any applicable minimum initial investment requirements,
a shareholder may exchange Investor Shares or Institutional Shares of any
Series of the Trust (including the Fund) for Investor Shares or
Institutional Shares of any identically registered other Series in the
Lindner family of funds. Before exchanging shares, investors should read
the current prospectus describing the shares to be acquired. The
<PAGE> 17
exchange privilege is not designed to afford shareholders a way to play
short-term swings in the market. Lindner Investments is not suitable for
that purpose. The Trust reserves the right to limit the amount and
frequency of exchanges between the Series in circumstances it deems
disadvantageous to the Trust. In addition, the shares being exchanged and
the shares of the Series being acquired must meet the minimum investment
requirement, if any, of the Series being acquired.
By Telephone. A shareholder may exchange shares by phone if he or she has
established telephone privileges with the Trust and the account
registrations and options (for example, automatic reinvestment of dividends)
are identical. Before calling, a shareholder should read "Additional
Information About Share Exchanges", below.
By Mail. A shareholder may direct the Trust in writing to exchange shares.
If the shares are owned by two or more persons, the request should be signed
by each person. All signatures should be exactly as the name appears in the
registration; for example, if an owner's name is registered as David Lee
Smith, he should sign that way and not as David L. Smith.
Additional Information About Share Exchanges
(1) The shares of the Series being acquired must be qualified for
sale in the shareholder's state of residence.
(2) If the shares being surrendered for exchange are represented by
a negotiable stock certificate, the certificate must be returned to Ryback
Management before the exchange can be effected.
(3) Once a shareholder has made an exchange request by telephone or
mail, it is irrevocable and may not be modified or canceled.
(4) For the purposes of processing exchanges, the value of shares
surrendered and the value of shares acquired are the net asset values of
such shares next computed after receipt of an exchange order.
(5) Shares may not be exchanged unless the shareholder has
furnished the Trust with the correct tax identification number, certified as
prescribed by the Internal Revenue Code and Regulations. See "Withholding
Certification".
(6) An exchange of shares is, for federal income tax purposes, a
sale of the shares, on which a shareholder may realize a taxable gain or
loss.
(7) If the request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, Ryback Management will
require evidence satisfactory to it of the authority of the individual
signing the request.
(8) Under most circumstances, a bank, broker or benefit plan
administrator that is a shareholder of Institutional Shares of the Fund for
the benefit of participants in a tax qualified retirement plan (such as a
401(k) Plan) may not permit participants in such plan to exchange
Institutional Shares of the Fund for Investor Shares of the Fund or any
other Series.
<PAGE> 18
AUTOMATIC INVESTMENT PLAN
(Investor Shares Only)
An Automatic Investment Plan is available to a shareholder of Investor
Shares of the Fund who wishes to invest a specific amount of money on an
automatic basis. A shareholder may authorize the Fund to automatically
debit his or her bank account on a monthly or semi-monthly basis. Debits
must be made in amounts of $50 or more and may be made once per month on the
15th or last business day of the month, or semi-monthly on both such days.
If the 15th falls on a weekend or holiday, the account will be debited on
the following business day. Shareholders may participate in the Automatic
Investment Plan by signing a form provided on request. Requests to
participate in the Automatic Investment plan and inquiries regarding the
same should be made to Lindner Investments, P.O. Box 11208, St. Louis,
Missouri 63105. All requests to change or discontinue the Automatic
Investment Plan must be received in writing fifteen (15) days prior to the
next scheduled debit date.
PAYROLL DEDUCTION
(Investor Shares Only)
Many employers today provide for payroll deduction. This allows employees
to direct a portion of their pay to the investment option of their choice
via Automated Clearing House (ACH). ACH is a convenient electronic funds
transfer service that is used by thousands of corporations and individuals.
Lindner Investments will accept a shareholder's direct deposit in amounts of
at least $50 for the purchase of Investor Shares in the Fund. Shareholders
who wish to use Payroll Deduction to invest need to obtain the proper
instructions from the Trust. Requests to participate in Payroll Deduction
and inquiries regarding the same should be made to Lindner Investments, P.O.
Box 11208, St. Louis, Missouri 63105.
SYSTEMATIC WITHDRAWAL PLAN
(Investor Shares Only)
A systematic withdrawal plan is available to any holder of Investor Shares
of the Fund whose total account value is at least $15,000 and who wishes to
withdraw fixed amounts of money from his investment in the Fund's Investor
Shares on a systematic basis. Withdrawals must be in amounts of $100 or
more and may be made monthly or quarterly, at an annual rate not exceeding
40% of the value of the holder's Investor Shares at the inception of the
shareholder's systematic withdrawal plan. However, shareholders
participating in a systematic withdrawal plan retain the same rights to
redemption as any other shareholder. Under a systematic withdrawal plan,
the shareholder receives cash withdrawals out of the proceeds of the
redemption at net asset value of full and fractional deposited shares. The
Fund redeems Investor Shares for this purpose as of the close of the first
business day following the twentieth day of each month in which a withdrawal
is made. The redemption of Investor Shares to make payments under this plan
involves the use of principal and will reduce and may eventually exhaust the
account. Each redemption of Investor Shares will result in a gain or loss
that must be reported on the participating shareholder's income tax return.
Establishment of a systematic withdrawal account constitutes an election by
the shareholder to reinvest all income dividends and capital gains
distributions payable on his account in additional Investor Shares of the
Fund at net asset value.
Shareholders may participate in the systematic withdrawal plan by signing a
form provided on request and depositing any stock certificates subjected to
the plan. Requests to participate in the systematic withdrawal plan and
inquiries regarding the same should be made to Lindner Investments, P.O. Box
11208, St. Louis,
<PAGE> 19
Missouri 63105. An investor may terminate the systematic withdrawal plan at
any time by written notice to the Funds.
INDIVIDUAL RETIREMENT ACCOUNTS
(Investor Shares Only)
An Individual Retirement Account Plan (an "IRA Plan") is available to
employed (including self-employed) persons and their non-employed spouses.
All contributions to such an IRA Plan are invested in Investor Shares of the
Fund. The initial minimum investment for an IRA Plan account for which Star
Bank, N.A., serves as Custodian is $250. Subsequent purchases must be in an
amount of at least $100. An annual administrative fee (currently $10) per
IRA account will apply and may be paid separately by check.
Contributions to an IRA Plan must be post-marked no later than the due date
of the tax return (without extensions) for the contribution year for which
the contribution is being made. A "Prior Year Contribution" is an IRA
contribution made between January 1 and April 15 for the prior calendar tax
year. A "Current Year Contribution" is an IRA contribution made between
January 1 and December 31 for the current calendar tax year. If no tax year
is indicated, the IRA contribution will be considered a "Current Year
Contribution". Withdrawals from an IRA Plan must be in writing and
accompanied by Internal Revenue Service Form W-4P. IRA redemption requests
not accompanied by Form W-4P will be subject to income tax withholding.
Star Bank, N.A., serves as Custodian under IRA Plans. The Custodian's fee
and other information about an IRA Plan are disclosed in Plan documents
including a Disclosure Statement that must be obtained from the Funds before
investing in an IRA Plan. Investors should also consult with their
individual tax advisors regarding the appropriateness of their investment in
an IRA Plan. Requests for applications to establish an IRA Plan should be
addressed to Lindner Investments, P.O. Box 11208, St. Louis, Missouri 63105.
PRICING OF SHARES FOR PURCHASE OR REDEMPTION
The Fund determines the current net asset value of each class at the close
of trading on each business day on which at least one of the following
markets is open: New York Stock Exchange, American Stock Exchange, or the
Nasdaq Stock Market. The net asset value of each class is calculated by
dividing the value of the Fund's securities, plus any cash and other assets
(including dividends and interest accrued but not collected) less all
liabilities, including accrued expenses, allocable to that class (including
accrued distribution and service fees payable by the Institutional Shares)
by the total number of shares of the particular class outstanding.
Portfolio securities, including open short positions and options written,
are valued at the last sale price on the securities exchange or securities
market on which such securities primarily are traded. Securities not
listed on an exchange or securities market, or securities in which there
were no transactions, are valued at the mean between the last reported bid
and asked prices, except in the case of open short positions where the asked
price is available. Any securities for which recent market quotations are
not readily available, including restricted securities, are valued at fair
value as determined in accordance with procedures approved by the Fund's
Trustees. This value generally is determined as the amount which a Series
could reasonably expect to receive from an orderly disposition of these
securities over a reasonable period of time. Short-term obligations with
less than sixty days remaining to maturity are generally valued at amortized
cost. Short-term obligations with more than sixty days remaining to
maturity will be valued at current market
<PAGE> 20
value until the sixtieth day prior to maturity, and will then be valued on
an amortized cost basis, based on the value on such date unless the Board
determines that this amortized cost value does not represent fair market
value. Premiums received on the sale of call options will be included in
the net asset value, and current market value of the options sold by the
Fund will be subtracted from net asset value.
The value of foreign securities is converted into U.S. dollars at the rate
of exchange prevailing on the valuation date. Purchases and sales of
foreign securities as well as income and expenses related to such securities
are converted at the prevailing rate of exchange on the respective dates of
such transactions.
The Fund may, to the extent permitted by its investment restrictions, have
positions in portfolio securities for which market quotations are not
readily available. It may be difficult to determine precisely the fair
market value for such investments and there may be a range of values which
are reasonable at any particular time. Determination of fair value in such
instances will be based upon such factors as are deemed relevant under the
circumstances, including the financial condition and operating results of
the issuer, recent third party transactions (actual or proposed) relating to
such securities and, in extreme cases, the liquidation value of the issuer.
Net asset value represents the price for purchase orders received and shares
tendered for redemption during the period following the previous price
determination and prior to the close of the New York Stock Exchange (usually
4:00 p.m., Eastern Time). For purchase orders received and shares tendered
for redemption after the closing of the New York Stock Exchange, the Fund
will determine net asset value as of the closing on the following trading
day.
DISTRIBUTION AND SERVICE PLAN
(Institutional Shares Only)
The Trust has adopted for the Fund a Distribution and Service Plan (the
"Distribution Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan
provides that Institutional Shares of the Fund may pay distribution and
related expenses of up to 0.25% each year of the average net assets
allocated to Institutional Shares. Expenses permitted to be paid by the
Institutional Shares of the Fund include preparation, printing and mailing
of prospectuses; reports to shareholders such as semi-annual and annual
reports, performance reports and newsletters; sales literature and other
promotional materials; direct mail solicitation; advertising; public
relations; compensation of sales personnel, brokers, financial planners or
others for their assistance with respect to distribution of Institutional
Shares, including compensation for such services to personnel of Ryback
Management; providing payments to any financial intermediary for shareholder
support, administrative and accounting services with respect to beneficial
holders of Institutional Shares and such other expenses as may be approved
from time to time by the Trust's Board of Trustees for which payment or
reimbursement is permitted by applicable law. Payments pursuant to the
Distribution Plan may be made only to reimburse expenses incurred during a
rolling 12-month period, subject to the annual limitation of 0.25% of
average daily net assets allocated to Institutional Shares. The Board of
Trustees will review a quarterly written report of amounts expended under
the Distribution Plan with respect to the Fund.
The Distribution Plan may be terminated with respect to the Fund at any time
by vote of the Trustees who are not "interested persons" or by vote of a
majority of the outstanding Institutional Shares of a particular Fund. Any
changes in the Distribution Plan that would materially increase the
distribution expenses of the Institutional Shares of the Fund requires
shareholder approval by the holders of such Institutional Shares. The
Distribution Plan will continue in effect for Institutional Shares so long
as its continuance is specifically
<PAGE> 21
approved at least annually by a majority of the Trustees of the Trust,
including a majority of those Trustees who are not "interested persons", by
vote cast in person at a meeting called for the purpose of voting on
continuation of the Distribution Plan.
PERFORMANCE
The Fund may from time to time include its "average annual total return" in
communications to present or prospective investors. "Average annual total
return" is the annual percentage change in an investment, assuming the
reinvestment of dividends and capital gains distributions, over a stated
period of time. Because Institutional Shares pay a fee pursuant to the
Trust's Distribution Plan, the performance of Institutional Shares will be
lower than that of Investor Shares. See "Fund Expenses" and "Distribution
and Service Plan".
"Average annual total return" is a historical measure of performance and is
not necessarily indicative of the Fund's future performance. This measure
will vary from time to time depending on numerous factors, including market
conditions, the composition of the Fund's portfolio and the operating
expenses incurred by the Fund. On occasion, the Fund may compare their
performance to that of other recognized financial indices; however, as with
other performance data, performance comparisons should not be considered
representative of the Fund's relative performance for any future period.
OTHER INFORMATION
When issued, the shares of the Fund will be fully paid, nonassessable and
redeemable. Each shareholder is entitled to one vote for each share owned,
with each fractional share receiving the same proportion of a vote. The
Fund does not intend to hold annual meetings; they may, however, hold
special shareholder meetings for purposes such as changing fundamental
policies or electing trustees. The Board of Trustees shall promptly call a
meeting for the purpose of electing or removing trustees when requested in
writing to do so by the shareholders of any Fund holding at least 10% of the
outstanding shares of a Fund entitled to be cast at such meeting. The term
of office of each trustee is of unlimited duration. The holders of at least
two-thirds of the outstanding shares of all Series of the Trust may remove a
trustee from that position either by declaration in writing or by votes cast
in person or by proxy at a meeting called for that purpose. As of December
15, 1997, no person controlled the Trust, as defined under the 1940 Act.
The shares of the Fund are divided into two classes. Each share has one
vote and shareholders will vote in the aggregate and not by class, except as
to any matter that affects only one class of shares or as otherwise required
by law. Only holders of Institutional Shares will be entitled to vote on
matters relating to the Trust's Distribution Plan. Shareholders will vote
by series except as otherwise required by the 1940 Act. Matters affecting
an individual Series include, but are not limited to, the investment
objective, policies and restrictions of that Series. Shares have no
subscription, preemptive or conversion rights. Certificates will not be
issued unless requested by an investor. Shares do not have cumulative
voting rights when voting on the election of Trustees. Therefore, the
holders of more than 50% of the aggregate number of shares of all Series of
the Trust may elect all the Trustees.
Under the laws of certain jurisdictions, the shareholders of a business
trust may, under certain circumstances, be held personally liable for its
obligations. Therefore, the Declaration of Trust for the Trust contains an
express disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each
agreement, obligation, or instrument entered into or executed by the Trust
or the Trustees. In addition, upon payment of any such liability, a
shareholder will be entitled to reimbursement
<PAGE> 22
from the general assets of the Fund in which that shareholder has an
interest. In the event that the Fund was unable to meet this obligation,
the remaining Series of the Trust would assume the unsatisfied obligation of
the Fund. The Trustees intend to conduct the operations of the Trust, with
the advice of counsel, in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Trust or any
of its Series.
The Trust will send annual and semi-annual reports to its shareholders. The
financial statements appearing in the annual reports will be audited by
independent auditors. In addition, Ryback Management, as transfer agent,
will send to each shareholder having an account directly with the Trust a
confirmation statement with respect to each transaction effected in the
account, showing transactions in the account, the total number of shares
owned and any dividends or distributions paid. All securities and cash of
the Fund will be held by the Custodians. Ryback Management will act as
dividend disbursing and transfer agent for the Fund. Inquiries regarding
the Trust or the Fund may be directed in writing to Lindner Investments,
7711 Carondelet, Suite 700, St. Louis, Missouri 63105, or by calling (800)
995-7777.
COUNSEL
Legal matters for the Trust and the validity of the shares of the Fund will
be passed upon by Dykema Gossett PLLC, Detroit, Michigan, counsel to the
Trust.
<PAGE> 23
APPENDIX--DESCRIPTION OF BOND RATINGS
Standard and Poor's Ratings Group
BBB - Bonds rated BBB are regarded as having a satisfactory degree of safety
and capacity to pay principal and interest and repay principal. Whereas
they normally exhibity 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.
BB, B, CCC and CC - Bonds rated BB, B, CCC and CC are regarded, on balance,
as predominantly speculative with respect to capacity to pay interest and
repay principal in accordance with the terms of the bond. BB indicates the
lowest degree of speculation and CC the highest degree of speculation.
While such bonds may have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
C - The rating C is reserved for bonds on which no interest is being paid.
D - Bonds rated D is in default, and payment of interest and/or repayment of
principal is in arrears. The D rating category is used when interest
payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The D rating will also be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
NR - Indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a
particular type of bond as a matter of policy.
Note: The S&P ratings may be modified by the addition of a plus or minus
sign to show the relative standing within the major categories.
Moody's Investors Service, Inc.
Baa - Bonds and notes 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 which are 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 which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the security over any long period for time may be small.
<PAGE> 24
Caa - Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca - Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C - Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Baa through B in its corporate bond rating system. The
modifier 1 indicates that the bond being rated ranks in the higher end of
its generic rating; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the bond ranks in the lower end of its generic
rating category.
<PAGE> 25
(BACK COVER)
LINDNER INVESTMENTS
7711 Carondelet Avenue, Suite 700
St. Louis, Missouri 63105
(800) 995-7777
Fax: (314) 727-9306
INVESTMENT ADVISER
Ryback Management Corporation
CUSTODIANS
Star Bank, N.A.
Chase Manhattan Bank
COUNSEL
Dykema Gossett PLLC
INDEPENDENT AUDITORS
Deloitte & Touche LLP
TRANSFER AGENT
Ryback Management Corporation
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and the
Statement of Additional Information dated April 12, 1998, and, if given or
made, such information or representations may not be relied upon as having
been authorized by Lindner Investments. This Prospectus does not constitute
an offer to sell or the solicitation of an offer to buy, nor shall there by
any sale of, these securities in any state or jurisdiction in which such
offer, solicitation or sale would be unlawful. The delivery of this
Prospectus at any time shall not imply that there has been no change in the
affairs of Lindner Investments or the Fund since the date hereof.
PROSPECTUS
__________
LINDNER FUNDS
[LOGO]
LINDNER HIGH-YIELD BOND FUND
http://www.lindnerfunds.com
Advised by Ryback Management Corporation
April 12, 1998
<PAGE> B-1
PART B
LINDNER INVESTMENTS
STATEMENT OF ADDITIONAL INFORMATION
for
INVESTOR SHARES
and
INSTITUTIONAL SHARES
of
LINDNER HIGH-YIELD BOND FUND
This Statement of Additional Information ("Statement of Additional
Information" or "SAI") is meant to be read in conjunction with the Lindner
Investments (the "Trust") Prospectus, dated April 12, 1998, for the Lindner
High-Yield Bond Fund (the "Fund") and is incorporated by reference in its
entirety into the Prospectus. The Fund is a separate series of the Trust
and represents a separate portfolio of securities and other assets with its
own objective and policies. Because this Statement of Additional
Information is not itself a prospectus, no investment in shares of the Fund
should be made solely upon the information contained herein. Copies of the
Prospectus may be obtained by writing or calling Lindner Investments.
Capitalized terms used but not defined herein have the same meanings as in
the Prospectus. Any such request should be made by mail to the Trust at
7711 Carondelet, P.O. Box 11208, St. Louis, Missouri 63105, or by phone to
(800) 995-7777.
April 12, 1998
<PAGE> B-2
TABLE OF CONTENTS
and
CROSS-REFERENCE SHEET TO PROSPECTUS
SAI
Discussion Page Prospectus Title and Page
- ---------- ---- -------------------------
Definitions 3 Not discussed in Prospectus
Investment Objective, Policies
and Risks 3 Investment Objectives,
Policies and Risks, p. 4
Management of the Trust 7 Management of the Trust, p. 7
Control Persons and Principal
Holders of Securities 9 Not discussed in Prospectus
Investment Advisory and Other
Services 10
Controlling Persons 10 Management of the Trust-
Investment Adviser, p. 7
Adviser Compensation 10 Management of the Trust-
Investment Adviser, p. 7
Transfer Agent 10 Management of the Trust-
Transfer and Dividend Paying
Agent, p. 9
Administrator 11 Management of the Trust-
Administrator, p. 9
Distribution and Service Plan 11 Distribution and Service Plan,
p. 20
Custodians and Independent Auditors 12 Management of the Trust-
Custodians and Independent
Auditors - p. 9
Brokerage Allocation 12 Not discussed in Prospectus
Purchase, Redemption and Pricing
of Securities 13 Pricing of Shares for Purchase
or Redemption, p. 19
Additional Performance Information 14 Not discussed in Prospectus
Certain Other Matters 15
Liability of Trustees and Others 15 Not discussed in Prospectus
Description of Series and Shares 15 Other Information, p. 21
Registration Statement 16 Not discussed in Prospectus
<PAGE> B-3
DEFINITIONS
For purposes of this Statement of Additional Information, the reader should
assume that the terms defined below have the meanings indicated, unless the
context requires otherwise.
"Administration Agreement" means the Administration Agreement between the
Trust and Ryback Management relating to the Fund, dated as of April 1, 1998.
"Adviser" or "Ryback Management" means Ryback Management Corporation, a
corporation organized and existing under the laws of the State of Michigan,
having its principal offices at 7711 Carondelet Avenue, P.O. Box 11208, St.
Louis, Missouri 63105.
"Advisory Agreement" means the Advisory Agreement between the Trust and the
Adviser relating to the Fund, dated as of April 1, 1998.
"Agency Agreement" means the Transfer Agency Agreement between the Trust and
Ryback Management relating to the Fund, dated as of April 1, 1998.
"Class" means either the class of Investor Shares or the class of
Institutional Shares of the Fund.
"Fund" means Lindner High Yield Bond Fund which has been established by the
Trust a separate series.
"Prospectus" means the Prospectus of the Trust dated April 12, 1998.
"Trust" means Lindner Investments, a business trust organized and existing
under the laws of the Commonwealth of Massachusetts, having its principal
offices at 7711 Carondelet Avenue, P.O. Box 11208, St. Louis, Missouri
63105.
"1940 Act" means the federal Investment Company Act of 1940, as amended.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
The investment objective of the Fund is a fundamental policy and may
not be changed by the Trustees of the Fund without the vote of a majority of
the Fund's outstanding voting securities. The objective of the Fund is to
produce maximum current income. To achieve its objective, the Fund invests
primarily in high-yielding, high-risk corporate bonds and notes, which
generally are unrated or carry lower ratings (Baa or lower by Moody's
Investors Service, Inc. ("Moody's") or BBB or lower by Standard & Poor's
Rating Service ("S&P")) than those assigned by S&P or Moody's to
investment grade bonds and notes. The Fund may also invest a portion of its
assets in debt securities not paying current income if the Adviser believes
that interest, payments or dividends on such securities are likely to be
restored in the future. Except for temporary defensive purposes, the Fund
will invest at least 65% of the value of its assets in these kinds of high-
yielding, income-producing corporate bonds and notes. Consistent with its
objective of producing maximum current income, the Fund may invest up to 20%
of its total assets in common stocks, convertible or non-convertible
preferred stocks, including non-investment grade preferred stock, and other
securities having the characteristics of equity securities. Certain
preferred stock issues may offer higher yields than similar bond issues
because their rights are subordinated to the bonds. Consequently, such
preferred stock issues will have a greater risk potential. Investments
other than in such corporate bonds and notes or
<PAGE> B-4
such equity securities will be in short-term money market instruments,
including certificates of deposit, commercial paper, securities issued,
guaranteed or insured by the U.S. Government, its agencies and
instrumentalities, and other income producing cash items. The Fund may
invest up to 10% of its total assets in securities of foreign issuers.
Foreign investments may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. There may be less
information available about a foreign company than about a U.S. company, and
foreign companies may not be subject to reporting standards and requirements
comparable to those applicable to U.S. companies. Foreign debt securities
and their markets may not be as liquid as U.S. securities and their markets.
Securities of some foreign companies may involve greater market risk than
securities of U.S. companies, and foreign brokerage commissions and custody
fees are generally higher than in the United States. Investments in foreign
debt securities may also be subject to local economic or political risks,
such as political instability of some foreign governments and the
possibility of nationalization of issuers.
The following information regarding the investment policies of the Fund
supplements the information contained in the Fund's Prospectus.
Lending of Portfolio Securities. The Fund may lend portfolio securities to
certain institutional borrowers of securities and may invest the cash
collateral and obtain additional income or receive an agreed upon amount of
interest from the borrower. Loans will generally be short-term. Loans are
subject to termination at the option of the Fund or the borrower. The Fund
may pay reasonable administrative and custodial fees in connection with a
loan and may pay a negotiated portion of the interest earned on the cash or
equivalent collateral to the borrower or placing broker. Loaned securities
may not be returned by a borrower; however, a borrower must maintain with
the Fund, cash, or equivalent collateral, equal to at least 100% of the
market value of the securities borrowed.
Repurchase Agreements. The Fund may enter into repurchase agreements with
commercial banks and with broker/dealers to invest cash for the short-term.
A repurchase agreement is an agreement under which the Fund acquires a money
market instrument, generally a U.S. Government obligation, qualified for
purchase by the Fund, subject to resale at an agreed upon price and date.
Such resale price reflects an agreed upon interest rate effective for the
period of time the instrument is held by the Fund and is unrelated to the
interest rate on the instrument. Repurchase agreements usually are for
short periods, such as one week or less, but may be for longer periods. As
a matter of fundamental policy, the Fund will not enter into repurchase
agreements of more than one week's duration if more than 15% of its total
assets would be invested in such agreements and in "restricted" and other
illiquid securities.
Leverage. Leveraging creates an opportunity for increased net income and
capital appreciation but, at the same time, creates special risk
considerations. For example, leveraging may exaggerate changes in the net
asset value of the Fund's shares and in the yield on the Fund's portfolio.
Although the principal of such borrowings will be fixed, the Fund's assets
may change in value during the time the borrowing is outstanding.
Leveraging will create interest expense for the Fund which can exceed the
income from the assets retained. To the extent the income derived from
securities purchased with borrowed funds exceeds the interest the Fund will
have to pay, the Fund's net income will be greater than if leveraging were
not used. Conversely, if the income from the assets retained with borrowed
monies is not sufficient to cover the cost of leveraging, the net income of
the Fund will be less than if leveraging were not used, and therefore the
amount available for distribution to stockholders as dividends will be
reduced.
<PAGE> B-5
When-issued Securities. The Fund may purchase securities on a when-issued
basis, in which case delivery and payment normally take place within 45
days after the date of the commitment to purchase. The payment obligation
and the interest rate that will be received on the securities are each fixed
at the time the buyer enters into the commitment. Although the Fund will
only purchase securities on a when-issued basis with the intention of
actually acquiring the securities, the Fund may sell these securities
before the settlement date if it is deemed advisable.
Securities purchased on a when-issued basis and the securities held by the
Fund are subject to changes in market value based upon the public's
perception of the credit-worthiness of the issuer and changes, real or
anticipated, in the level of interest rates (which will generally result in
similar changes in value, i.e., both experiencing appreciation when interest
rates decline and depreciation when interest rates rise). Therefore, to the
extent the Fund remains substantially fully invested at the same time that
it has purchased securities on a when-issued basis, there will be a greater
possibility that the market value of the Fund's assets will vary more than
otherwise. Purchasing a security on a when-issued basis can involve a risk
that the yields available in the market when the delivery takes place may be
higher than those obtained on the security so purchased.
A separate account consisting of cash or liquid high-grade debt securities
equal to the amount of the when-issued commitments will be established with
the Fund's portfolio securities custodian, and marked to market daily, with
additional cash or liquid high grade debt securities added when necessary.
When the time comes to pay for when-issued securities, the Fund will meet
its obligations from then available cash flow, sale of securities held in
the separate account, sale of other securities or, although they would not
normally expect to do so, from the sale of the when-issued securities
themselves (which may have a value greater or less than the Fund's payment
obligations). Sale of securities to meet such obligations carries with it a
greater potential for the realization of capital gain or loss.
Unless expressly stated to be a fundamental policy, none of the investment
policies described above are fundamental, which means that the Trustees of
the Fund may change such policies without the vote of shareholders of the
Fund.
General; Portfolio Turnover. There is no assurance that the Fund's
objectives will be met or that there will not be substantial losses in any
given investment. Also, at anytime, the value of the Fund's shares may be
more or less than the investor's cost. Under normal circumstances, the
Fund's portfolio turnover rate is anticipated to be less than 75% per year.
The Fund's portfolio turnover rate will be calculated by dividing the lesser
of purchases or sales of portfolio securities for the fiscal year by the
monthly average value of the portfolio securities owned during the fiscal
year.
INVESTMENT LIMITATIONS
The following investment limitations are fundamental policies of the Fund,
which means that they cannot be changed except by a vote of shareholders
owning a majority of the Fund's outstanding voting securities.
Under the 1940 Act, a "vote of shareholders owning a majority of the Fund's
outstanding voting securities" means the affirmative vote of the lesser of
(l) more than 50% of the outstanding shares of the Fund or (2) 67% or more
of the shares of the Fund present at a shareholder's meeting if more than
50% of the outstanding shares of the Fund are represented at the meeting in
person or by proxy.
<PAGE> B-6
- The Fund may borrow money from banks or other sources for
temporary or emergency purposes and for the purchase of portfolio
securities but not in an amount in excess of 15% of the Fund's total
assets;
- The Fund may not mortgage or pledge any of its assets, except to
the extent necessary to effect borrowings permitted by the preceding
paragraph and provided that this limitation does not prohibit
escrow, collateral or margin arrangements in connection with (a) the
writing of covered call options, (b) the purchase of put options or
(c) the sale of interest rate futures contracts and the purchase or
sale of options on such contracts;
- The Fund may not make "short sales" of securities, or purchase
securities on "margin", except that for purposes of this limitation,
initial and variation payments or deposits in connection with
interest rate futures contracts and related options will not be
deemed to be the purchase of securities on margin;
- The Fund may not write or purchase put or call options, except
that the Fund may write covered call options and the Fund may
purchase put options and may purchase and sell options on interest
rate futures and may engage in closing transactions with respect to
such options. The Fund has no present intention of investing in
these types of securities, and will not do so without the prior
approval of the Fund's Board of Trustees;
- The Fund may not purchase securities of any issuer if immediately
thereafter more than 5% of total assets at market would be invested
in the securities of any one issuer, other than the U.S. Government,
its agencies or instrumentalities;
- The Fund may not buy more than 10% of the voting securities of
any one issuer, or invest to control or manage any company;
- The Fund may not invest more than 25% of the market value of its
total assets in securities of issuers in any one industry; provided
that, for the purpose of this limitation, mortgage-related
securities do not constitute an industry;
- The Fund may not invest in securities issued by other investment
companies, except in connection with a merger, consolidation,
acquisition or reorganization;
- The Fund may not purchase or hold any real estate, including
limited partnership interests in real property;
- The Fund may not invest more than 5% of its total assets in
securities of any company which, with its predecessors, has been in
operation less than three continuous years, provided, however, that
securities guaranteed by a company that (including predecessors) has
been in operation at least three continuous years shall be excluded
from this calculation;
- The Fund may not purchase or hold the securities of any issuer,
if to its knowledge, Trustees or officers of the Fund individually
owning beneficially more than 1/2 of 1% of the securities of that
other company own, in the aggregate, more than 5% of such
securities;
<PAGE> B-7
- The Fund may not engage in transactions with its Trustees and
officers, or firms they are associated with, in connection with the
purchase or sale of securities, except as broker;
- The Fund may not underwrite the securities of other issuers,
except when the Fund may be deemed to be an underwriter as defined
in the Securities Act of 1933 in connection with the disposition of
a restricted security; or
- The Fund may not make loans, except loans of portfolio securities
and except to the extent the purchase of notes, bonds or other
evidences of indebtedness, or the entry into repurchase agreements
may be considered loans.
MANAGEMENT OF THE TRUST
The Officers and Trustees of the Trust are listed below, together with
information regarding their principal business occupations during at least
the past five years and their ages. Each of the Trustees of the Trust was
elected as a trustee at the inception of the Trust in 1993 and has served
continuously since that date. Trustees who are "interested persons" of the
Trust, as defined in Section 2(a)(19) of the 1940 Act, are indicated with an
asterisk.
Position(s)
Held With Principal Occupation(s)
Name, Address and Age The Trust During Past Five Years
- --------------------- ---------- ----------------------
*Doug T. Valassis, 45 Chairman Chairman and Trustee of the Trust.
520 Lake Cook Road of the Chairman, a Director and Treasurer
Suite 380 Board and of the Adviser since 1992.
Deerfield, IL 60015 Trustee President and Chief Executive
Officer of Franklin Enterprises,
Inc., a private investment firm,
for more than last five years.
*Eric E. Ryback, 45 President President and Trustee of the Trust.
7711 Cardondelet Ave. and Trustee President and a Director of the
Suite 700 Adviser since 1992. Prior to 1993,
St. Louis, MO 63105 Mr. Ryback was Vice President of
Lindner Fund, Inc. ("LFI") and
Lindner Dividend Fund, Inc.
("LDFI") and Vice President of
Lindner Management Corporation
("LMC"), the investment adviser to
LFI and LDFI.
Robert A. Lange, 53 Senior Vice Senior Vice President of the
7711 Carondelet Ave. President Adviser since 1993. Prior to 1993,
Suite 700 Mr. Lange was a Senior Vice
St. Louis, MO 63105 President of LFI, LDFI and LMC.
Brian L. Blomquist, 39 Admin. Vice Executive Vice President of the
7711 Carondelet Ave. President, Adviser since 1995 and Assistant
Suite 700 Secretary Secretary of the Adviser since
St. Louis, MO 63105 and 1993. Prior to 1993, Mr. Blomquist
Treasurer served as Vice President--
Operations, Treasurer and Secretary
of LFI and LDFI.
Robert L. Byman, 52 Trustee Partner in the law firm of Jenner &
Jenner & Block Block, Chicago, Illinois, for more
One IBM Place than five years.
Chicago, IL 60611
<PAGE> B-8
Terrence P. Fitzgerald, 42 Trustee Vice President, Development
2407 Stryker Avenue Director, The Mills Corporation,
Vienna, VA 22181 since 1996. Senior Counsel, The
May Department Stores, from 1993
until 1995.
Marc P. Hartstein, 45 Trustee Director--Industry Development of
3 Middlebrook Lane Anheuser-Busch Inc. Also owns Hart
St. Louis, MO 63141 Communications, Inc., a research,
strategic planning and image
development firm.
Peter S. Horos, 49 Trustee Investment Manager, Allstate Life
All State Insurance Company, Northbrook,
3075 Sander Road Illinois.
Northbrook, IL 60062
Donald J. Murphy, 54 Trustee President and Chief Executive
141 Jackson Blvd. Officer of Murcom Financial
Chicago, IL 60604 a private investment firm.
Dennis P. Nash, 46 Trustee Vice President, Nellis Feed
Nellis Feed Company Company, a feed ingredient
899 Skokie Blvd. broker.
Northbrook, IL 60062
Compensation
During the most recently completed fiscal year, Trustees of Lindner
Investments received the following compensation from the Trust, which is the
only group of mutual funds managed by the Adviser:
Aggregate Remuneration
Name and Capacity in which Received from the Trust
Remuneration was Received With Respect to All Funds
- -------------------------- -------------------------
Robert L. Byman, Trustee $10,900
Terrence P. Fitzgerald, Trustee 10,900
Marc P. Hartstein, Trustee 10,900
Peter S. Horos, Trustee 9,675
Donald J. Murphy, Trustee 10,900
Dennis P. Nash, Trustee 10,900
Eric E. Ryback, Trustee and President 0
Doug T. Valassis, Trustee and Chairman 0
There are no pension or retirement benefit plans or programs in effect for
Trustees of the Trust. No officers of the Trust receive any remuneration
from the Trust.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Shareholders of each Fund will vote by series except as otherwise required
by the 1940 Act. Matters affecting an individual series include, but are
not limited to, the investment objectives, policies and restrictions of that
series. Shares have no subscription, preemptive or conversion rights.
Shares do not have cumulative voting rights when voting on the election of
Trustees. Therefore, the holders of more than 50% of the aggregate number
of shares of all series of the Trust may elect all the Trustees. The shares
of each
<PAGE> B-9
series of the Trust other than the Government Money Market Fund are divided
into two classes. Each share has one vote and shareholders will vote in the
aggregate and not by class, except as to any matter that affects only one
class of shares or as otherwise required by law. Only holders of
Institutional Shares will be entitled to vote on matters relating to the
Trust's Distribution Plan.
At January 22, 1998, no person beneficially owned, either directly or
indirectly, more than 25% of the voting securities of the Trust or any Fund,
nor had the Trust or any Fund or any other person acknowledged or asserted
the existence of control over the Trust or any Fund, nor had there been any
adjudication under the 1940 Act that control over the Trust or any Fund
exists. In addition, at January 22, 1998, no person owned of record or was
known by the Trust to own of record or beneficially 5% or more of any series
of the Trust.
At January 22, 1998, the officers and Trustees of the Trust, as a group,
owned the following amounts of shares in each Fund:
No. of
Name of Fund Shares % of Total
- ------------ ------ ----------
Lindner Dividend Fund--
Investor Shares 107,289.500 0.16%
Institutional Shares 0 n/a
Lindner Growth Fund--
Investor Shares 151,025.442 0.26%
Institutional Shares 0 n/a
Lindner Utility Fund
Investor Shares 18,789.001 0.65%
Institutional Shares 0 n/a
Lindner Bulwark Fund
Investor Shares 31,935.532 0.46%
Institutional Shares 0 n/a
Lindner/Ryback Small-Cap Fund
Investor Shares 125,819.702 2.9%
Institutional Shares 0 n/a
Lindner International Fund
Investor Shares 34,755.953 9.8%
Institutional Shares 0 n/a
Lindner Government Money Market Fund
Investor Shares 381,517.81 0.86%
INVESTMENT ADVISORY AND OTHER SERVICES
Controlling Persons
The Fund's Adviser, Ryback Management Corporation, is controlled by The
George F. Valassis Stock Trust and certain other trusts established for the
benefit of Mr. Valassis's family members (collectively, the "Valassis
Trusts"), which as of January 31, 1998, held 65% of the voting securities of
the Adviser. Mr. Doug T. Valassis is a co-Trustee of the Valassis Trusts
and serves as the Chairman of the Board of Directors of the Adviser. The
other co-Trustees of the Valassis Trusts are Edward W. Elliott, Jr., and D.
Craig Valassis. Certain officers of the Trusts also serve as officers of
the Adviser. See "Management of the Trust".
<PAGE> B-10
Adviser Compensation
Under the Advisory Agreement between the Trust and the Adviser relating to
the Fund, the Adviser provides the Fund with investment advisory services,
in exchange for which the Fund pays the Adviser a monthly fee (before
reimbursement of expenses to the Fund or fee waivers, if any) equal to 1/12
of 0.__% of the average net assets of the Fund. For purposes of computing
the fee, the Fund's average net assets are calculated by dividing the sum of
the Fund's net assets at the beginning and end of each month by two. Under
the Advisory Agreement, the Adviser is required to reimburse each fund for
any excess of annual operating and management expenses relating to the Fund,
exclusive of taxes and interest but including the Adviser's compensation,
over the most stringent expense limitation imposed by state law or
regulation for any fiscal year. Any excess over the expense limitation is
paid by the Adviser monthly.
Transfer Agent
Pursuant to the Transfer Agency Agreement between the Trust and Ryback
Management relating to the Fund, Ryback Management maintains shareholder
records and keeps such accounts, books, records, or other documents as the
Fund is required to keep under federal or state laws. Ryback Management
also acts as stock registrar and dividend disbursing agent, issues and
redeems the Fund's shares, mails the Fund's prospectuses and proxy
statements to the Fund's shareholders, and disburses dividend payments. As
compensation for these services, Ryback Management is paid a fee of $__.00
per shareholder account per year by the Fund. This agreement permits Ryback
Management to engage the services of sub-agents that may be required to
facilitate the distribution of shares and record keeping for shareholder
accounts maintained in "street name" with brokers, and Ryback Management has
entered into a sub-transfer agency agreement with State Street Bank and
Trust Company for such services. The fees and expenses of State Street Bank
and Trust Company are also paid by the Trust.
Administrator
Under the Administration Agreement between Ryback Management and the Trust,
Ryback Management provides the Fund with office space and personnel, pays
the salaries and fees of the Trust's officers and directors who are
interested persons of the Trust, the charges for all clerical services
relating to the Fund's investments, and all promotional expenses of the
Fund, including the printing and mailing of the prospectus to persons other
than current shareholders. For these administrative services, the Fund pays
Ryback Management a monthly administration fee equal to 1/12th of 0.__% of
the average daily net assets of the Fund.
The Fund pays all of its other costs and expenses including interest, taxes,
fees of directors who are not interested persons of the Trust,
administrative expenses related directly to the issuance and redemption of
shares (such as expenses of registering or qualifying shares for sale,
charges of custodians, transfer agents, and registrars), costs of printing
and mailing reports and notices to shareholders, charges for auditing
services and legal services, and other fees and commissions of every kind
not expressly assumed by Ryback Management, as the administrator for the
Fund.
Each of the Advisor Agreement, Transfer Agency Agreement and the
Administration Agreement with the Trust provides that it may be terminated
by the Trust or Ryback Management upon 60 days' notice, and that it may be
terminated immediately by the Trust for cause, as defined in each Agreement.
Each agreement also provides that after an initial two-year period, it will
automatically terminate if it (1) is not approved by
<PAGE> B-11
a majority of the Trust's trustees and a majority of the Trust's
disinterested trustees upon the annual renewal date of the Agreement, or (2)
is assigned in whole or in part by Ryback Management. If any agreement is
terminated for either of the foregoing reasons, the Trust will enter into a
similar agreement with an unrelated party upon such terms and conditions as
can be obtained at that time.
Distribution and Service Plan (Institutional Shares Only)
On behalf of the Institutional Shares of the Fund, the Trust has adopted a
Distribution and Service Plan (the "Distribution Plan") pursuant to Rule
12b-1 under the 1940 Act, which regulates circumstances under which an
investment company may bear expenses associated with the distribution of its
shares. The Distribution Plan provides that Institutional Shares of the
Fund may incur certain expenses that may not exceed a maximum amount equal
to 0.25% of the average daily net asset value of the Institutional Shares
for any fiscal year occurring after the adoption of the Distribution Plan.
The Distribution Plan further provides that the Fund may pay such amount to
Ryback Management on behalf of Institutional Shares distributed by or
through broker-dealers, financial institutions and other organizations which
have entered into written agreements with the Trust or Ryback Management in
order to enable Ryback Management to pay to such other organizations a
maintenance, service or other fee, at such intervals as Ryback Management
may determine. Such payments will be made to such other organizations for
continuing services to their clients or to the beneficial owners of
Institutional Shares based on the average daily net asset value of
Institutional Shares held in such accounts remaining outstanding on the
books of a Fund for specified periods. The disposition of monies pursuant
to the Distribution Plan will be reviewed by the Board of Trustees of the
Trust on a quarterly basis, to assure that the amounts paid and the purposes
for which they are paid, comply with the provisions of the Distribution Plan
and Rule 12b-1.
The services under the Distribution Plan may include assistance in
advertising and marketing of Institutional Shares, aggregating and
processing purchase, exchange and redemption requests for Institutional
Shares, maintaining account records, issuing confirmations of transactions
and providing sub-accounting and sub-transfer agent services with respect to
Institutional Shares.
While the Distribution Plan is in effect, the selection and nomination of
Trustees of the Trust who are not "interested persons" of the Trust, as
defined in the 1940 Act (the "Independent Trustees") is committed to the
discretion of the Independent Trustees then in office.
The Distribution Plan was approved by the Board of Trustees and by the
Independent Trustees, by vote cast in person at a meeting of the Trustees
called for such purpose, on January 25, 1996, and was approved by the
shareholder owning all of the Institutional Shares of the Fund on March __,
1998. The Distribution Plan may be continued annually if approved by
majority vote of the Trustees, and by majority vote of the Independent
Trustees, cast in person at a meeting held for such purpose. The
Distribution Plan may not be amended to increase materially the amount of
distribution fees permitted to be paid thereunder without being first
approved by a majority vote of the holders of all Institutional Shares of
the Fund. The Distribution Plan may be terminated at any time by a majority
vote of the Independent Trustees or by a majority vote of the holders of
Institutional Shares of the Fund.
Custodians and Independent Auditors
Star Bank, N.A. ("Star Bank"), 425 Walnut Street, Cincinnati, Ohio 45202,
acts as custodian of all cash and domestic securities of the Fund. Star
Bank receives a monthly fee based on monthly average net assets of
<PAGE> B-12
all of the series of the Trust, which fee is allocated among all of the
series, including the Fund, on the basis of their respective net asset
values. The Trust has an arrangement whereby custodian expenses are reduced
by maintaining compensating balances with Star Bank.
The Chase Manhattan Bank, N.A. ("Chase"), 4 Chase MetroTech, 18th Floor,
Brooklyn, NY 11245, serves as the Fund's custodian of foreign securities.
Chase charges custodian fees on a sliding scale depending on the countries
in which the Fund is invested. The fees include transaction charges ranging
from $30 to $125 plus safekeeping fees ranging from 10/100 of 1% to 42/100
of 1% per annum, based upon the portfolio market value of foreign securities
in each country as of the close of business on the last business day of each
quarter.
Deloitte & Touche LLP, independent auditors, One City Centre, St. Louis,
Missouri 63101, audits the Funds' annual financial statements.
BROKERAGE ALLOCATION
Placement of the Fund's orders to buy and sell portfolio securities are the
responsibility of the Adviser. Such decisions are made for the Adviser by
its President, Eric E. Ryback, Senior Vice President, Robert A. Lange, or
the portfolio managers for each Fund. Policies underlying the allocation of
brokerage are subject to review by the Trust's Board of Trustees. In the
allocation of such orders and the resulting commissions, the following
factors are considered:
--The Adviser's past experience, in dealing with various brokers, of
attaining the Fund's objectives of good execution at the most favorable
price;
--The services furnished by the broker in providing price
quotations;
--The allocation to the Fund of desired underwritten securities;
--The part, if any, played by the broker or dealer in bringing the
security involved to the Adviser's attention and providing information,
research and analysis with respect thereto;
--Assistance in the sale of Fund shares, provided that execution of
orders is satisfactory and that commission rates are competitive with those
available from other brokers; and
--Commission rates (see discussion below).
It is the policy of the Fund to secure, consistent with good execution, the
highest possible price on sales and the lowest possible price on purchases
of securities. Since brokers are compensated through commissions for
services described above and since commissions may be paid at varying rates,
sales even at the highest possible price may not yield the maximum possible
net proceeds and purchases even at the lowest possible price may not be made
at the lowest possible overall cost.
As permitted by section 28(e) of the Securities Exchange Act of 1934,
commissions paid to brokers for effecting securities transactions may exceed
the commission which another broker would have charged for effecting such
transactions, if the Adviser has determined in good faith that such charges
are reasonable in view of quotation or research services provided by such
broker. Research services that may be provided to
<PAGE> B-13
the Fund by a broker include calling attention to a stock and providing
information about the operations of companies over and above that published
in investment manuals. The receipt of quotation services from a broker
relieves the Adviser of certain expenses which it would otherwise incur.
Any information and analysis received from brokers supplements the Adviser's
activities and facilities, but does not reduce its expenses. The Adviser's
authority to incur such fees is subject to policy review by the Trust's
Board of Trustees. Advice provided by brokers may be used by the Adviser in
servicing clients other than the Fund.
The Fund and the Adviser do not consider their facilities to be adequate for
the conduct of over-the-counter trading and believe that better execution
can usually be obtained through utilization of brokers rather than direct
dealing with primary market makers. Thus, except for those instances in
which the Fund deals directly with a primary market maker, the Fund pays
both the dealer's mark-up or mark-down and the broker's commission. This
practice has resulted and will continue to result in greater costs to the
Fund.
PURCHASE, REDEMPTION AND PRICING OF SECURITIES
As stated in the Prospectus, the Adviser determines the current net asset
value of the Fund at the close of trading on each business day on which at
least one of the following markets is open: New York Stock Exchange,
American Stock Exchange, or the Nasdaq Stock Market. The per share net
asset value of each class of shares of each Fund is calculated by dividing
the value of the Fund's securities, plus any cash and other assets
(including dividends and interest accrued but not collected) less all
liabilities, including accrued expenses allocable to that class (including
accrued distribution and service fees payable by the Institutional Shares)
by the total number of shares of the particular class outstanding.
Investments in securities traded on a national securities exchange or quoted
on the Nasdaq National Market System are valued at the last reported sales
price as of the close of the New York Stock Exchange. Securities traded in
the over-the-counter market and listed securities for which no sale was
reported on that date are valued at the mean between the last reported bid
and asked prices. Securities which are traded both in the over-the-counter
market and on a stock exchange are valued according to the broadest and most
representative market. Securities and assets for which quotations are not
readily available are valued at fair value as determined in good faith by or
pursuant to procedures established by the Trustees. The value of foreign
securities is converted into U.S. dollars at the rate of exchange prevailing
on the valuation date. Purchases and sales of foreign securities as well as
income and expenses related to such securities are converted at the
prevailing rate of exchange on the respective dates of such transactions.
The Fund may, to the extent permitted by its investment restrictions, have
positions in portfolio securities for which market quotations are not
readily available. It may be difficult to determine precisely the fair
market value for such investments and there may be a range of values which
are reasonable at any particular time. Fair value in such instances will be
determined in good faith by the Board of Trustees of the Trust and based
upon such factors as are deemed relevant under the circumstances, including
the financial condition and operating results of the issuer, recent third
party transactions (actual or proposed) relating to such securities and, in
extreme cases, the liquidation value of the issuer.
Shares are offered to the public at the price set forth in the Prospectus,
pursuant to written application as specified in the Prospectus (see
"Purchase of Shares and Shareholder Inquiries"). In the event that the Fund
issues its shares in exchange for other securities, such other securities
will meet the applicable Fund's investment objectives and policies, will be
acquired for investment and will be liquid securities (i.e., not restricted
as to transfer by law or liquidity of market) that have a readily
ascertainable market value.
<PAGE> B-14
ADDITIONAL PERFORMANCE INFORMATION
The Fund may from time to time include its "average annual total return" in
communications to present or prospective investors. "Average annual total
return" is the annual percentage change in an investment in the Fund over a
stated period of time. The Fund will compute average annual total return
using the following formula:
P(1+T) n = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (as a power)
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10 year period
at the end of the 1, 5 or 10 year period
In making the above-described computation, the Fund will assume that all
dividends and capital gains distributions by the Fund are reinvested at the
Fund's net asset value per share on the reinvestment date. The Fund does
not have sales loads or other charges payable by all shareholders that could
affect their calculations of average annual total return.
Average annual total return is an historical measure of performance and is
not necessarily indicative of the Fund's future performance. Such
measurement will vary from time to time depending upon numerous factors,
including without limitation market conditions, the composition of the
Fund's portfolio and operating expenses. These factors should be considered
when evaluating the Fund's performance.
CERTAIN OTHER MATTERS
Liability of Trustees and Others
The Declaration of Trust provides that the Trustees, officers, employees,
and agents of the Trust will not be liable to the Trust, to the Fund or to a
shareholder, nor will any such person be liable to any third party in
connection with the affairs of the Trust, except as such liability may arise
from his or its own bad faith, willful misfeasance, gross negligence, or
reckless disregard of duties. It also provides that all third parties shall
look solely to the Trust property for satisfaction of claims arising in
connection with the affairs of the Trust. With the exceptions stated, the
Declaration of Trust provides that a Trustee, officer, employee, or agent is
entitled to be indemnified against all liability in connection with the
affairs of the Trust.
Description of Series and Shares
The Declaration of Trust provides that the Trust shall be comprised of one
or more separate series of shares. The proceeds of sale of each series will
be invested in separate portfolios of securities. The Trustees are
authorized to create an unlimited number of series and, with respect to each
series, to issue an unlimited number of full and fractional shares of a
single class and to divide or combine the shares into a greater or lesser
number of shares without changing the proportion of beneficial interests in
the series.
All shares have equal voting rights, except that only shares of a particular
series are entitled to vote on matters concerning only that series. Each
issued and outstanding share is entitled to one vote, to participate
<PAGE> B-15
equally in dividends and distributions declared by the respective series,
and, upon liquidation or dissolution, to share in the net assets of such
series remaining after satisfaction of outstanding liabilities. In the
event a series should be unable to meet its obligations, the remaining
series would assume the unsatisfied obligations of that series. All shares
issued and outstanding are fully paid and nonassessable by the Trust. The
Trust is not required to issue share certificates.
The shares of each series have no preference, preemptive, conversion or
similar rights. In the event the Trustees create one or more additional
series, shareholders may be given the right to exchange shares of one fund
for shares of such other series.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted by the provisions of that Act or applicable state law, or
otherwise, to the holders of the outstanding voting securities of an
investment company shall not be deemed to have been effectively acted upon
unless approved by the holders of a majority of the outstanding shares of
each class affected by the matter. Rule 18f-2 further provides that a class
shall be deemed to be affected by a matter unless it is clear that the
interests of each class in the matter are identical or that the matter does
not affect any interest of the class. Under the Rule, the approval of an
investment advisory agreement or any change in investment policy would be
effectively acted upon with respect to a class of shares only if approved by
a majority of the outstanding voting securities of such class. However, the
Rule also provides that the ratification of independent public accountants,
the approval of principal underwriting contracts, and the election of
Trustees are not subject to the separate voting requirements and may be
effectively acted upon by shareholders of the investment company voting
without regard to class.
As permitted by Massachusetts law, the Trustees may determine not to hold
shareholders meetings for the election of Trustees, subject, however, to the
requirement that a special meeting of shareholders be called for the purpose
of electing Trustees within 60 days if at any time less than a majority of
the current Trustees have been elected by shareholders of the Trust.
Because shares do not have cumulative voting rights, 50% of the voting
shares can, if they choose, elect all Trustees being selected while the
holders of the remaining shares would be unable to elect any Trustees. The
Trustees will call a special meeting of shareholders for the purpose of
voting on the question of removal of a Trustee or Trustees if shareholders
of record of 10% or more of the Trust's outstanding shares make a written
request so to do. Any ten or more shareholders who have been shareholders
for more than six months and who hold in the aggregate the lesser of 1% of
the outstanding shares or shares with a net asset value of $25,000 may
advise the Trustees that they wish to communicate with other shareholders
for the purpose of obtaining signatures requesting Trustees to call such a
meeting. The Trustees must thereupon afford access to the list of Fund
shareholders or offer to mail such solicitations at the shareholder's cost.
If a majority of the Trustees object to the contents of the solicitation,
the Trustees may request a determination of the Securities and Exchange
Commission as to the obligation to mail such material.
Any change in the Declaration of Trust, the Advisory Agreement, the
Administration Agreement or the Transfer Agency Agreement, if it has the
effect of increasing costs, or in the fundamental investment restrictions of
the Fund must be approved by a majority of the shareholders of the Fund
before it can become effective. A "majority" means the vote of the lesser
of (1) 67% of the shares of the Fund present at a meeting if the holders of
more than 50% of the outstanding shares are present in person or by proxy,
or (2) more than 50% of the outstanding shares of the Fund.
<PAGE> B-16
Registration Statement
The Prospectus and this Statement of Additional Information omit certain
information contained in the Registration Statement filed with the
Securities and Exchange Commission. Copies of the Registration Statement,
including such omitted items, may be obtained from the Commission by paying
the charges prescribed under its rules and regulations. In addition, the
SEC maintains an Internet Web site that contains reports, proxy and
information statements that are filed electronically with the SEC, including
the Trust's Registration Statement and such omitted items. The address of
this site is http://www.sec.gov.
Statements contained in the Prospectus and herein as to the contents of any
contact or other document referred to are not necessarily complete, and, in
each instance, reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement of which the
Prospectus and this Statement of Additional Information form a part, each
such statement being qualified in all respects by such reference.
<PAGE> C-1
PART C
OTHER INFORMATION
Item 24. Financial Statement and Exhibits.
(a) Financial Statements: None
(b) Exhibits:
(1) Declaration of Trust, dated July 19, 1993 (previously filed
as Exhibit 1 to Post-Effective Amendment No. 7 and
incorporated herein by reference)
(2) Bylaws (previously filed as Exhibit 2 to Post-Effective
Amendment No. 7 and incorporated herein by reference)
(3) None
(4) First Amended Certificate of Designation of Series and
Classes of Shares (previously filed as Exhibit 4 to
Post-Effective Amendment No. 12 and incorporated herein by
reference)
(5) (a) Advisory and Service Contract, dated as of September 23,
1993, between the Registrant and Ryback Management
Corporation relating to the Lindner Utility Fund and the
Lindner/Ryback Small-Cap Fund (previously filed as Exhibit
5(a) to Post-Effective Amendment No. 7 and incorporated
herein by reference)
(b) Advisory and Service Contract, dated as of September 23,
1993, between the Registrant and Ryback Management
Corporation relating to the Lindner Bulwark Fund (previously
filed as Exhibit 5(b) to Post-Effective Amendment No. 7 and
incorporated herein by reference)
(c) Advisory and Service Contract, dated as of December 29,
1994, between the Registrant and Ryback Management
Corporation relating to the Lindner International Fund
(previously filed as Exhibit 5(c) to Post-Effective
Amendment No. 7 and incorporated herein by reference)
(d) Advisory and Service Contract, effective as of June 28,
1995, between the Registrant and Ryback Management
Corporation relating to the Lindner Dividend Fund
(previously filed as Exhibit 5(d) to Post-Effective
Amendment No. 7 and incorporated herein by reference)
(e) Advisory and Service Contract, effective as of June 28,
1995, between the Registrant and Ryback Management
Corporation relating to the Lindner Growth Fund (previously
filed as Exhibit 5(e) to Post-Effective Amendment No. 7 and
incorporated herein by reference)
(f) Advisory Agreement, dated as of May 20, 1996, between
the Registrant and Ryback Management Corporation, relating
to the Lindner Government Money Market Fund (previously
filed as Exhibit 5(f) to Post-Effective Amendment No. 11 and
incorporated herein by reference)
(g) Subadvisory Agreement, dated as of May 20, 1996, between
Ryback Management Corporation and Star Bank, N.A., relating
to the Lindner Government Money Market Fund (previously
filed as Exhibit 5(g) to Post-Effective Amendment No. 11 and
incorporated herein by reference)
(h) Advisory Agreement, dated as of April 1, 1998, relating
to the Lindner High-Yield Bond Fund (to be filed by
amendment)
(6) None
(7) None
(8) (a) Custody Agreement between the Registrant and Star Bank,
N.A., dated December 7, 1994 (previously filed as Exhibit
8(a) to Post-Effective Amendment No. 7 and incorporated
herein by reference)
(b) Global Custody Agreement between the Registrant and
Chase Manhattan Bank, N.A., dated September 28, 1993
(previously filed as Exhibit 8(b) to Post-Effective
Amendment No. 7 and incorporated herein by reference)
<PAGE> C-2
(9) (a) Agency Agreement, dated September 23, 1993, between the
Registrant and Ryback Management Corporation, as amended on
August 18, 1994 (previously filed as Exhibit 9 to
Post-Effective Amendment No. 7 and incorporated herein by
reference)
(b) Second Amendment to Agency Agreement, dated as of
September 26, 1996 (filed herewith)
(c) Transfer Agency Agreement, dated as of May 20, 1996,
between the Registrant and Ryback Management Corporation,
relating to the Lindner Government Money Market Fund
(previously filed as Exhibit 9(b) to Post-Effective
Amendment No. 11 and incorporated herein by reference)
(d) Transfer Agency Agreement, dated as of April 1, 1998,
between the Registrant and Ryback Management Corporation,
relating to the Lindner Government High-Yield Bond Fund (to
be filed by amendment)
(e) Sub-Transfer Agency Agreement, dated as of November 1,
1996, between the Registrant and State Street Bank and Trust
Company (filed herewith)
(f) Administrative Services Agreement, dated as of May 20,
1996, between the Registrant and Ryback Management
Corporation, relating to the Lindner Government Money Market
Fund (previously filed as Exhibit 9(c) to Post-Effective
Amendment No. 11 and incorporated herein by reference)
(g) Administration Agreement, dated as of April 1, 1998,
between the Registrant and Ryback Management Corporation,
relating to the Lindner High-Yield Bond Fund (to be filed by
amendment)
(10) Opinion of Dykema Gossett PLLC, counsel for the Registrant,
including consent (filed herewith)
(11) None
(12) None
(13) (a) Purchase Agreements, dated as of February 1, 1996,
between the Registrant and the initial holders of
Institutional Shares of each Series of the Registrant
(previously filed as Exhibit 13 to Post-Effective Amendment
No. 8 and incorporated herein by reference)
(b) Purchase Agreement, dated as of May 15, 1996, between
the Registrant and the initial holders of shares of Lindner
Government Money Market Fund (previously filed as Exhibit
13(b) to Post-Effective Amendment No. 11 and incorporated
herein by reference)
(14) None
(15) Distribution and Service Plan pursuant to Rule 12b-1
(previously filed as Exhibit 15 to Post-Effective Amendment
No. 8 and incorporated herein by reference)
(16) None
(17) None
(18) Lindner Investments Rule 18f-3 Dual-Class Plan (previously
filed as Exhibit 18 to Post-Effective Amendment No. 8 and
incorporated herein by reference)
Item 25. Persons Controlled by or Under Common Control with Registrant.
Not applicable.
<PAGE> C-3
Item 26. Number of Holders of Securities.
The following table sets forth information as to all record holders
of Registrant's securities as of January 15, 1998:
Number of
Title of Class Record Holders
- -------------- --------------
Lindner Dividend Fund, shares of beneficial interest,
par value $0.01 per share--
Investor Shares 59,687
Institutional Shares 18
Lindner Growth Fund, shares of beneficial interest,
par value $0.01 per share--
Investor Shares 44,689
Institutional Shares 14
Lindner Utility Fund, shares of beneficial interest,
par value $0.01 per share--
Investor Shares 2,369
Institutional Shares 6
Lindner Bulwark Fund, shares of beneficial interest
par value $0.01 per share--
Investor Shares 2,016
Institutional Shares 6
Lindner/Ryback Small-Cap Fund, shares of beneficial
interest, par value $0.01 per share--
Investor Shares 2,079
Institutional Shares 6
Lindner International Fund, shares of beneficial
interest, par value $0.01 per share--
Investor Shares 364
Institutional Shares 7
Lindner Government Money Market Fund, shares of
beneficial interest, par value $0.01 per share--
Investor Shares 1,238
Item 27. Indemnification.
The Declaration of Trust and Bylaws of the Registrant contain
provisions covering indemnification of the officers and trustees. The
following are summaries of the applicable provisions.
The Registrant's Declaration of Trust provides that every person who
is or has been a trustee, officer, employee or agent of the Registrant and
every person who serves at the trustees request as director, officer,
employee or agent of another enterprise will be indemnified by the
Registrant to the fullest extent permitted by law against all liabilities
and against all expenses reasonably incurred or paid by him in connection
with any debt, claim, action, demand, suit, proceeding, judgment, decree,
liability or obligation of any kind in which he becomes involved as a party
or otherwise or is threatened by virtue of his being or having been a
trustee, officer, employee or agent of the Registrant or of another
enterprise at the request of the Registrant and against amounts paid or
incurred by him in the compromise or settlement hereof.
No indemnification will be provided to a trustee or officer: (i)
against any liability to the Registrant or its shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office ("disabling conduct"); (ii)
with respect to any matter as to which he shall, by the court or other body
by or before which the proceeding was brought or engaged, have been finally
adjudicated to be liable by reason of disabling conduct; (iii) in the
absence of a final adjudication on the merits that such trustee or officer
did not engage in disabling conduct, unless a reasonable determination based
upon a review of the facts that the person to be indemnified is not liable
by reason of such conduct, is made by vote of a majority of a quorum of the
trustees who are neither interested persons nor parties to the proceedings,
or by independent legal counsel, in a written opinion.
<PAGE> C-4
The rights of indemnification may be insured against by policies
maintained by the Registrant, will be severable, will not affect any other
rights to which any trustee, officer, employee or agent may now or hereafter
be entitled, will continue as to a person who has ceased to be such trustee,
officer, employee, or agent and will inure to the benefit of the heirs,
executors and administrators of such a persons; provided, however, that no
person may satisfy any right of indemnity or reimbursement except out of the
property of the Registrant, and no other person will be personally liable to
provide indemnity or reimbursement (except an insurer or surety or person
otherwise bound by contract).
Article XIV of the Registrants Bylaws provides that the Registrant
will indemnify each trustee and officer to the full extent permitted by
applicable federal, state and local statutes, rules and regulations and the
Declaration of Trust, as amended from time to time. With respect to a
proceeding against a trustee or officer brought by or on behalf of the
Registrant to obtain a judgment or decree in its favor, the Registrant will
provide the officer or trustee with the same indemnification, after the same
determination, as it is required to provide with respect to a proceeding not
brought by or on behalf of the Registrant.
This indemnification will be provided with respect to an action,
suit proceeding arising from an act or omission or alleged act or omission,
whether occurring before or after the adoption of Article XIV of the
Registrant's Bylaws.
Item 28. Business and Other Connections with Investment Advisor.
Information concerning the business, profession, vocation, or
employment of a substantial nature during the past two fiscal years of each
officer and director of the Adviser that also serves as an officer and/or
director of the Registrant (i.e., Messrs. Eric E. Ryback, Robert A. Lange,
Brian L. Blomquist and Doug T. Valassis) is set forth in Part B of this
Registration Statement under the heading "Management of the Trust", and is
incorporated herein by reference. The following chart summarizes the
business, profession, vocation, or employment of a substantial nature in
which each other officer and director of the Adviser is or has been engaged
at any time during the past two fiscal years:
Position Business, Profession, Vocation, or
Name with Adviser Employment
- ---- ------------ ----------------------------------
D. Craig Valassis Director Executive Vice President of
Franklin Enterprises, Inc., a
private investment firm located at
520 Lake Cook Road, Suite 380, Lake
Forest, Illinois 60045.
Robert Miller Director Vice President and Controller of
Franklin Enterprises, Inc.
Item 29. Principal Underwriters.
Not applicable.
Item 30. Location of Accounts and Records.
All accounts and records required to be maintained by the Registrant
are maintained by the transfer agent, Ryback Management Corporation, 7711
Carondelet Avenue, P.O. Box 11208, St. Louis, Missouri 63105.
Item 31. Management Services.
There are no management-related service contracts not discussed in
Part A or Part B of this Registration Statement.
<PAGE> C-5
Item 32. Undertakings.
(a) Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(b) With respect to the Lindner High-Yield Bond Fund, Registrant
hereby undertakes to file a post-effective amendment, using financial
statements which need not be certified, within four to six months after the
effective date of this Post-Effective Amendment to its Registration
Statement on Form N-1A.
(c) Registrant undertakes to call a meeting of shareholders for
the purposes of voting upon the question of removal of a trustee or trustees
if requested to do so by the holders of at least 10% of Registrant's total
outstanding shares of beneficial interest of all series of the Registrant.
Registrant hereby undertakes to comply with the provisions of Section 16(c)
of the 1940 Act with respect to the removal of Trustees and the calling of
special shareholder meetings by shareholders.
(d) Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of the Registrant's latest annual
report to shareholders for the Lindner High-Yield Bond Fund, upon request
and without charge.
<PAGE> C-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Clayton, and State of Missouri, on the 27th day of January, 1998.
LINDNER INVESTMENTS
By: /S/ ERIC E. RYBACK
Eric E. Ryback, President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment has been signed below by the following persons in
the capacities indicated on January 27, 1998.
** Chairman and Trustee
Doug T. Valassis
/S/ ERIC E. RYBACK President and Trustee (Principal Executive Officer)
Eric E. Ryback
/S/ BRIAN L. BLOMQUIST Vice President- Operations, Secretary and Treasurer
Brian L. Blomquist (Principal Financial and Accounting Officer)
** Trustee
Robert L. Byman
** Trustee
Terrence P. Fitzgerald
** Trustee
Marc P. Hartstein
** Trustee
Peter S. Horos
** Trustee
Donald J. Murphy
** Trustee
Dennis P. Nash
**Executed on behalf of the indicated person by the undersigned, pursuant to
power of attorney previously filed and incorporated herein by reference.
By: /S/ ERIC E. RYBACK
Eric E. Ryback, Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
(9)(e) Sub-Transfer Agency Agreement, dated as of November 1, 1996,
between the Registrant and State Street Bank and Trust
Company
(10) Opinion of Dykema Gossett PLLC, counsel for the Registrant,
including consent
Exhibit 9(e)
SUB-TRANSFER AGENCY AGREEMENT
This SUB-TRANSFER AGENCY AGREEMENT is made as of November 1, 1996,
by and between RYBACK MANAGEMENT CORPORATION (the "Transfer Agent"), a
Michigan corporation, having its principal office at 7711 Carondelet Avenue,
Suite 700, St. Louis, Missouri 63105 (the "Transfer Agent") and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts trust company having its principal
office at 225 Franklin Street, Boston, Massachusetts 02110 ("State Street").
WHEREAS, the Transfer Agent has been appointed by Lindner
Investments, a Massachusetts business trust (the "Trust") which is an open-
end management investment company registered under the Investment Company
Act of 1940, as amended, as the transfer agent, dividend disbursing agent
and shareholder servicing agent for the Trust in connection with certain
activities, and the Transfer Agent has accepted such appointment;
WHEREAS, the Transfer Agent has entered into an Agency Agreement
with the Trust (including each series thereof now or hereafter created)
pursuant to which the Transfer Agent is responsible for certain transfer
agency, dividend disbursing and shareholder servicing functions and the
Transfer Agent is authorized to subcontract for the performance of its
obligations and duties thereunder in whole or in part with qualified third
parties;
WHEREAS, the Transfer Agent is desirous of having State Street
perform certain shareholder accounting, administrative and servicing
functions (collectively "Shareholder and Record-keeping Services"); and
WHEREAS, the Transfer Agent desires to appoint State Street as its
agent, and State Street desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Section 1. Terms of Appointment: Duties of State Street.
(a) Subject to the terms and conditions set forth in this
Agreement, the Transfer Agent hereby employs and appoints. State Street,
and State Street agrees, to act as the agent of the Transfer Agent for the
Shares of the Trust to perform certain transfer agency, dividend disbursing
and Shareholder and Recordkeeping Services, as described herein As used
herein, the term "Shares" means the authorized and issued shares of
beneficial interest, of the Trust (including each series and any class
thereof).
(b) In accordance with procedures established from time to time
by agreement between the Transfer Agent and State Street, State Street
agrees that it will perform the Shareholder and Record-keeping services
outlined in Schedule A attached hereto as well as such additional services
on behalf of the Transfer Agent (e.g., escheatment services) which may be
agreed upon in writing between the Transfer Agent and State Street.
(c) In addition to the services set forth in Schedule A, State
Street shall provide a system which will enable the Trust to monitor the
total number of Shares of each series of the Trust sold in each State. In
addition, the Transfer Agent shall (i) identify to State Street in writing
those transactions and assets to be treated as exempt from blue sky
reporting for each State and (ii) verify the establishment of transactions
for each State on the system prior to the effective date of this Agreement.
The responsibility of State Street for the status of each series of the
Trust blue sky state registrations is solely limited to the initial
establishment of transactions subject to blue sky compliance by each series
of the Trust and the reporting of such transactions to the Trust as provided
above.
(d) Procedures as to who shall provide certain of these services
in this Section 1 may be established from time to time by written agreement
<PAGE>
between the Transfer Agent and State Street, whereby State Street performs
only a portion of these services and the Transfer Agent may perform these
services on the Trust's behalf.
Section 2. Fees and Expenses. For the performance by State
Street pursuant to this Agreement, the Transfer Agent agrees to pay State
Street an annual fee as set out in Schedule B attached hereto. Such fee may
be changed from time to time subject to mutual written agreement between the
Transfer Agent and State Street. In addition to the foregoing fee, the
Transfer Agent agrees to reimburse State Street for reasonable out-of-pocket
expenses incidental to State Street's performance of its responsibilities
hereunder, including but not limited to confirmation production, postage,
forms, telephone, microfilm, microfiche, tabulating proxies, records
storage, or advances incurred by State Street or its agent for the items set
out in Schedule A attached hereto. In addition, any other expenses incurred
by State Street at the request or with the consent of the Transfer Agent,
will be reimbursed by the Transfer Agent. The Transfer Agent agrees to pay
all fees and reimbursable expenses within five (5) days following the
receipt of the respective billing notice. If appropriate, postage for
mailing of dividends, proxies, Trust reports and other mailings to all
shareholder accounts shall be advanced to the State Street by the Transfer
Agent at least seven (7) days prior to the mailing date of such materials.
Section 3. Representations and Warranties of State Street.
State Street represents and warrants to the Transfer Agent as follows:
(a) It is a trust company duly organized and existing and in
good standing under the laws of the Commonwealth of Massachusetts;
(b) It is duly qualified to carry on its business in the
Commonwealth of Massachusetts;
(c) It is empowered under applicable laws and by its Charter and
Bylaws to enter into and perform this Agreement;
(d) All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement; and
(e) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
Section 4. Representations and Warranties of the Transfer
Agent. The Transfer Agent represents and warrants to State Street as
follows:
(a) It is a corporation duly organized and existing and in good
standing under the laws of the State of Michigan;
(b) It is empowered under applicable laws and by its Articles of
Incorporation and Bylaws to enter into and perform this Agreement;
(c) All corporate proceedings required by its Articles of
Incorporation and Bylaws have been taken to authorize it to enter
into and perform this Agreement;
(d) The Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended; and
(e) A registration statement under the Securities Act of 1933,
as amended, for the Trust is currently effective and will remain
effective, and appropriate state securities law filings have been
made and will continue to be made, with respect to all Shares of the
Trust being offered for sale.
Section 5. Data Access and Proprietary Information.
(a) The Transfer Agent acknowledges that the data bases,
computer programs, screen formats, report formats, interactive design
<PAGE>
techniques, and documentation manuals furnished to the Transfer Agent by
State Street as part of the Trust's ability to access certain Trust-related
data ("Customer Data") maintained by State Street on data bases under the
control and ownership of State Street or other third party ("Data Access
Services") constitute copyrighted, trade secret, or other proprietary
information (collectively, "Proprietary Information") of substantial value
to State Street or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Transfer Agent agrees to treat all
Proprietary Information as proprietary to State Street and further agrees
that it shall not divulge any Proprietary Information to any person or
organization except as may be provided hereunder. Without limiting the
foregoing, the Transfer Agent agrees for itself and its respective employees
and agents:
(i) to access Customer Data solely from locations as may be
designated in writing by State Street and solely in accordance with
State Street's applicable user documentation;
(ii) to refrain from copying or duplicating in any way the
Proprietary Information;
(iii) to refrain from obtaining unauthorized access to any
portion of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such fact
and dispose of such information in accordance with State Street's
instructions;
(iv) to refrain from causing or allowing third-party data
acquired hereunder from being retransmitted to any unauthorized
computer facility or other location, except with the prior written
consent of State Street;
(v) to have access only to those authorized transactions agreed
upon by the parties; and
(vi) to honor all reasonable written requests made by State
Street to protect at State Street's expense the rights of State
Street in Proprietary Information at common law, under federal
copyright law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 5. The obligations of this Section 5
shall survive any earlier termination of this Agreement.
(b) If the Transfer Agent notifies State Street that any of the
Data Access Services do not operate in material compliance with the most
recently issued user documentation for such services, State Street shall
endeavor in a timely manner to correct such failure. Organizations from
which State Street may obtain certain data included in the Data Access
Services are solely responsible for the contents of such data and the
Transfer Agent agrees to make no claim against State Street arising out of
the contents of such third-party data, including, but not limited to, the
accuracy thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND
SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS
IS, AS AVAILABLE BASIS. STATE STREET EXPRESSLY DISCLAIMS ALL WARRANTIES
EXCEPT THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
(c) If the transactions available to the Transfer Agent include
the ability to originate electronic instructions to State Street in order to
(i) effect the transfer or movement of cash or Shares or (ii) transmit
Shareholder information, then in such event State Street shall be entitled
to rely on the validity and authenticity of such instruction without
undertaking any further inquiry as long as such instruction is undertaken in
conformity with security procedures established by State Street from time to
time.
<PAGE>
Section 6. Indemnification.
(a) State Street shall not be responsible for, and the Transfer
Agent shall indemnify and hold State Street harmless from and against, any
and all losses, damages, costs, charges, reasonable counsel fees, payments,
expenses and liability arising out of or attributable to:
(i) All actions of State Street or its agents or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without negligence or willful
misconduct;
(ii) The Transfer Agent's negligent or willful misconduct or a
breach of any material representation or warranty of the Transfer
Agent hereunder;
(iii) The good faith reliance on or use by State Street or its
agents or subcontractors of information, records, documents or
services which are received by State Street or its agents or
subcontractors, and have been prepared, maintained or performed by
the Transfer Agent or the Trust or any other person or firm on
behalf of the Transfer Agent or the Trust including but not limited
to any previous transfer agent or registrar, provided that such
actions are taken in good faith and without negligence or willful
misconduct;
(iv) The good faith reliance on, or the carrying out by State
Street or its agents or subcontractors of any instructions or
requests reasonably believed by State Street to have been signed or
authorized by the Transfer Agent or the Trust, provided that such
actions are taken in good faith and without negligence or willful
misconduct.
(v) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities
laws or regulations of any state that such Shares be registered in
such state or in violation of any stop order or other determination
or ruling by any federal agency or any state with respect to the
offer or sale of such Shares in such state, provided that such
actions are taken in good faith and without negligence or willful
misconduct and further provided, that State Street shall not be
indemnified with respect to claims based solely on the fact that
Shares of the Trust were not registered in a state if State Street
had been notified previously by the Trust or the Transfer Agent that
the Trust is not registered in such state.
(b) At any time, State Street may apply to any officer of the
Transfer Agent for instructions, and may consult with legal counsel
acceptable to the Transfer Agent with respect to any matter arising in
connection with the services to be performed by State Street under this
Agreement, and State Street and its agents or subcontractors shall not be
liable and shall be indemnified by the Transfer Agent for any action taken
or omitted by them in reliance upon such instructions or upon the Written
opinion of such counsel. State Street and its agents and subcontractors
shall be protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Transfer Agent or each Fund, reasonably
believed to be genuine and to have been signed by the proper person or
persons, or upon any instruction, information, data, records or documents
provided the Sub-Transfer Agents or their agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means
authorized by the Transfer Agent and reasonably believed by the Sub-Transfer
Agents to be genuine, and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof from the
Transfer Agent.
(c) In order that the indemnification provisions contained in
this Section 6 shall apply, upon the assertion of a claim for which the
Transfer Agent may be required to indemnify, State Street shall promptly
notify the Transfer Agent of such assertion, and shall keep the Transfer
<PAGE>
Agent advised with respect to all developments concerning such claim. The
Transfer Agent shall have the option to participate with State Street in the
defense of such claim or to defend against said claim in its own name or in
the name of State Street. State Street shall in no case confess any claim
or make any compromise in any case in which the Transfer Agent may be
required to indemnify State Street except with the I Transfer Agent's prior
written consent.
Section 7. Standard of Care. State Street shall at all times
act in good faith and agrees to use its best efforts within reasonable
limits to insure the accuracy of all services performed under this
Agreement, but assumes no responsibility and shall not be liable for loss or
damage due to errors, unless said errors are caused by its negligence, bad
faith, or willful misconduct or that of its officers, employees and agents.
Such liability hereunder shall include reasonable counsel fees incurred by
the Transfer Agent.
Section 8. Covenants of the Transfer Agent and State Street.
The Transfer Agent and State Street agree and covenant as follows:
(a) State Street agrees to establish and maintain facilities and
procedures reasonably acceptable to the Transfer Agent for safekeeping of
check forms and facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such forms and devices.
(b) State Street shall keep records relating to the services to
be performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the Investment Company Act of 1940, as
amended, and the Rules thereunder, State Street agrees that all such records
prepared or maintained by State Street or Huntington relating to the
respective services to be performed by each of them hereunder are the
property of the Trust and will be preserved, maintained and made available
in accordance with such Section and Rules, and will be surrendered promptly
to the Trust on and in accordance with its request.
(c) State Street and the Transfer Agent agree that all books,
records, information and data pertaining to the business of the other.
parties which are exchanged or received pursuant to the negotiation or the
carrying out of this Agreement shall remain confidential, and shall not be
voluntarily disclosed to any other person, except as may be required by law.
(d) In case of any requests or demands for the inspection of the
shareholder records of the Trust, the party receiving such request will
endeavor to notify the Transfer Agent and to secure instructions from an
authorized officer of the Transfer Agent as to such inspection. State
Street reserves the right, however, to exhibit the shareholder records to
any person whenever they are advised by counsel acceptable to the Transfer
Agent, as applicable that it may be held liable for the failure to exhibit
the shareholder records to such person.
Section 9. Termination of Agreement. This Agreement may be
terminated by any party upon ninety (90) days written notice to the other
parties hereto. Should the Transfer Agent exercise its right to terminate,
all reasonable out-of-pocket expenses associated with the movement of
records and material will be borne by the Transfer Agent. Additionally,
State Street reserves the right to charge as liquidated damages associated
with such termination a charge equivalent to the prior one month transfer
agency fees if termination occurs within the first year of this Agreement.
Section 10. Assignment.
(a) Except as provided in Subsection (c) below, neither this
Agreement nor any rights or obligations hereunder may be assigned by any
party without the written consent of the other parties;
(b) This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns;
<PAGE>
(c) State Street may, without further consent on the part of the
Transfer Agent, subcontract for the performance hereof with (i) Boston
Financial Data Services, Inc., a Massachusetts corporation ("BFDS") which is
duly registered as a transfer agent pursuant to Section 17A(c)(1) of the
Securities Exchange Act of 1934, as amended ("Section 17A(c)(2)"), (ii) a
BFDS subsidiary duly registered as a transfer agent pursuant to Section
17A(c)(1) or (iii) a BFDS affiliate; provided, however, that State Street
shall be as fully responsible to the Transfer Agent for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
Section 11. Amendment. This Agreement may be amended or
modified only by a written agreement executed by all parties.
Section 12. Applicable Law. This Agreement shall be construed
and the provisions thereof interpreted under and in accordance with the laws
of the Commonwealth of Massachusetts.
Section 13. Force Majeure. In the event any party is unable to
perform its obligations under the terms of this Agreement because of acts of
God, strikes, equipment or transmission failure or damage reasonably beyond
its reasonable control, or other causes reasonably beyond its control, such
party shall not be liable for damages to the other parties for any damages
resulting from such failure to perform or otherwise from such causes.
Notwithstanding the above, each party shall use its best efforts to ensure
that, within forty-eight (48) hours of an event causing its performance to
be materially affected, its material operations contemplated by this
Agreement are transferred to its disaster recovery site.
Section 14. Amendment. Neither party to this Agreement shall
be liable to the other party for consequential damages under any provision
of this Agreement or for any consequential damages arising out of any act or
failure to act hereunder. .
Section 15. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto and supersedes any prior
agreement with respect to the subject matter hereof whether oral or written.
Section 16. Counterparts. This Agreement may be executed by
the parties hereto on any number of counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf by and through their duly
authorized officers as of the day and year first above written.
RYBACK MANAGEMENT CORPORATION
By: /S/ BRIAN L. BLOMQUIST
Its: Executive Vice President
STATE STREET BANK AND TRUST COMPANY
By:
Its:
<PAGE>
SCHEDULE A TO
SUB-TRANSFER AGENCY
AND SERVICE AGREEMENT
Shareholder and Recordkeeping Services
Ryback Management Corporation - "RMC"
NFDS/State Street - "NFDS"
Service Performed
RMC NFDS
-----------------
1. Receive for acceptance, orders for the purchase of
Investment Shares, and promptly delivers payment and
appropriate documentation thereof to the Custodian of
the Fund authorized pursuant to the Declaration of
Trust of the Fund. X
2. Receive for acceptance, orders for the purchase of
Trust Shares, and promptly delivers payment and appropriate
documentation thereof to the Custodian of the Fund
authorized pursuant to the Declaration of Trust
of the Fund. X
3. Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the appropriate
Shareholder account. X
4. Receive for acceptance redemption requests and
redemption directions for Investor Shares and deliver
the appropriate documentation thereof to the Custodian. X
5. Receive for acceptance redemption requests and
redemption directions for Institutional Shares and
deliver the appropriate documentation thereof to the
Custodian. X
6. In respect to the transactions in items 1 through 5
above, the responsible party shall execute transactions
directly with broker dealers authorized by the Fund
(or the Distributor) who shall thereby be deemed to be
acting on behalf of the Fund. X
7. At the appropriate time as when it receives monies
paid to it by the Custodian with respect to any redemption,
pay over or cause to be paid over in the appropriate
manner such monies as instructed by the redeeming
shareholders. X X
8. Effect transfers of shares by the registered owners
thereof upon receipt of appropriate instructions. X
9. Prepare and transmit payments for dividends and
distributions declared by the Fund on behalf of the
applicable Portfolio. X
10. Reporting of abandoned property X
11. Maintain records of accounts for and advise the Funds
and their shareholders as to the foregoing, which records
include a record for each Shareholder's account of: (a)
name address, and tax identification number (and whether
such number has been certified); (b) numbers of Shares
held; (c) historical information regarding the account,
including dividends paid, and date and price for all trans-
actions; (d) any stop or restraining order placed against
the account; (e) information with respect to withholdings
in the case of a foreign account or any account for which
the withholding is required by the Internal Revenue Code;
(f) any dividend reinvestment order, plan application,
<PAGE>
dividend address, and correspondence relating to the
current maintenance of the account; (g) certificate
numbers and denominations for any shareholder holding
certificates; and (h) any information required in order
for RMC to perform the calculations contemplated or
required by this Agreement. X
12. Record the issuance of shares of each Fund and
maintain pursuant to SEC Rule 17Ad-10(d) a record of
the total number of shares of each Fund which are
authorized, based upon data provided to it by each Fund
on a regular basis with the total number of shares which
are authorized and issued and outstanding and shall have
no obligation, when recording the issuance of shares, to
monitor the issuance of such shares or to take cognizance
of any laws relating to the issue or sale of such shares,
which functions shall be the sole responsibility of
each Fund. X
13. Mail proxies X
14. Mail shareholder reports. X
15. Mail prospectuses to current shareholders. X
16. Withhold taxes on U.S. resident and non-resident
alien accounts X
17. Prepare and file U.S. Treasury Department forms X X
18. Prepare and mail account and confirmation statements
for shareholders X
19. Blue Sky reporting X
20. Service the Funds' toll-free line X
21. Literature fulfillment. X
22. Provide broker/dealer support services. X
23. Reconcile Star Bank DDA accounts X
24. Reconcile Mark Twain DDA. X
25. Process maintenances on all shareholder accounts. X
26. Preparation and mailing of required tax forms
for shareholders (1099-DIV, 1099-B, etc.) X
Note: On item number 11, NFDS will be maintaining the system to ensure
information is available to RMC. RMC is responsible for processing any
changes made to said records.
<PAGE>
SCHEDULE B TO
SUB-TRANSFER AGENCY
AND SERVICE AGREEMENT
Pursuant to Section 2, the following sets forth the fees to be paid to State
Street in conjunction with its services pursuant to this agreement.
One-time start up fee..........................$10,000
Annual Base Fee per CUSIP
First year: Months
1-4...................$500 per CUSIP per month
5-8...................$750 per CUSIP per month
9-12..................$1,000 per CUSIP per month
Every year thereafter.................$12,000 per CUSIP per year
Per account Fee-
Daily Dividend Fund $5.50
Non-Daily Dividend Fund $4.75
Closed Accounts $1.80
Manual Transaction Fee (if applicable)
Autoscrub $2.00
NSCC Trade/Financial $1.50
Non-Financial Maintenance $1.50
One-time Set-up Additional CUSIPs $1,250
Out-of-pocket expenses:
Customized Program Support
Business Analyst $60/hour
Technical Programmer $80/hour
Out-of-Pocket expenses include, but are not limited to the following:
Audio Response
Forms
Postage
Outside Mailing Services
Computer Hardware at the transfer Agent's facilities
Telecommunications (Dedicated Lines)
Telecommunications Equipment (exclusive of equipment inside DST facilities)
Magnetic tapes, reels or cartridges
Magnetic tape handling charges
Microfiche/Microfilm
Freight charges
Proxy processing
TIN certifications (W-8 and W-9)
Exhibit 10
DYKEMA GOSSETT PLLC
400 Renaissance Center
Detroit, Michigan 48243
January 26, 1998
Board of Trustees
Lindner Investments
7711 Carondelet Avenue, Suite 700
St. Louis, Missouri 63105
Gentlemen:
Lindner Investments, a Massachusetts business trust (the "Trust")
has registered under the Securities Act of 1933, as amended (the "1933
Act"), an indefinite number of shares of beneficial interest, as permitted
by Rule 24f-2 under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Trust proposes to file post-effective amendment number 14
(the "Post-Effective Amendment") to its Registration Statement in order to
register shares of the Lindner High-Yield Bond Fund (the "Series").
We have examined the Trust's Declaration of Trust on file in the
office of the Secretary of the Commonwealth of Massachusetts and the Clerk
of the City of Boston. We have also examined a copy of the Trust's Bylaws
and such other documents and records as we have deemed necessary for the
purpose of this opinion.
Based upon the foregoing, we are of the opinion that the issue and
sale of the authorized but unissued Shares of the Series has been duly
authorized under Massachusetts law. Upon the original issue and sale of the
Trust's authorized but unissued Shares and upon receipt of the authorized
consideration therefor in an amount not less than the net asset value of the
Shares established and in force at the time of their sale, the Shares issued
will be validly issued, fully paid and non-assessable shares.
Lindner Investments is an entity of the type commonly known as a
"Massachusetts business trust". Under Massachusetts law, shareholders
could, under certain circumstances, be held personally liable for the
obligations of the Trust. However, the Agreement and Declaration of Trust
provides for indemnification out of the property of a particular series of
shares for all loss and expense of any shareholder of that series held
personally liable solely by reason of his being or having been a
shareholder. Thus, the risk of shareholder liability is limited to
circumstances in which that series of shares itself would be unable to meet
its obligations.
We understand that this opinion is to be used in connection with the
filing of the Post-Effective Amendment. We consent to the filing of this
opinion with and as a part of the Post-Effective Amendment and to the
reference therein to our firm under the caption "Counsel".
Very truly yours,
DYKEMA GOSSETT PLLC
By: /S/ PAUL R. RENTENBACH
Paul R. Rentenbach
A Member of the Firm
