STRONG U.S. EMERGING GROWTH FUND
STRONG FUNDS
P.O. Box 2936
Milwaukee, Wisconsin 53201
TELEPHONE: (414) 359-1400
TOLL-FREE: (800) 368-3863
DEVICE FOR THE HEARING-IMPAIRED:
(800) 999-2780
www.strongfunds.com
The Strong Family of Funds ("Strong Funds") is a family of more than forty
diversified and non-diversified mutual funds. All of the Strong Funds are
no-load funds, meaning that you may purchase, redeem, or exchange shares
without paying a sales charge. Strong Funds include growth funds, conservative
equity funds, income funds, municipal income funds, international funds, and
cash management funds. The Strong U.S. Emerging Growth Fund ("Fund") is
described in this Prospectus. The Fund seeks capital growth. The Fund is a
diversified series of Strong Equity Funds, Inc., an open-end management
investment company.
This Prospectus contains information you should consider before you invest.
Please read it carefully and keep it for future reference. A Statement of
Additional Information for the Fund, dated December 30, 1998 ("SAI"), which
contains further information, is incorporated by reference into this
Prospectus, and has been filed with the Securities and Exchange Commission
("SEC"). The SAI, which may be revised from time to time, is available without
charge upon request to the above-noted address or telephone number. If you
would like to electronically access additional information about the Funds
after reading this Prospectus, you may do so by accessing the SEC's World Wide
Web site (http://www.sec.gov) that contains the SAI regarding the Funds and
other related materials.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
December 30, 1998, as
supplemented February 12, 1999
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
EXPENSES I-3
INVESTMENT OBJECTIVE AND POLICIES I-4
IMPLEMENTATION OF POLICIES AND RISKS I-5
ABOUT THE FUND I-11
SHAREHOLDER MANUAL II-1
</TABLE>
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and the SAI, and
if given or made, such information or representations may not be relied upon as
having been authorized by the Funds. This Prospectus does not constitute an
offer to sell securities to any person in any state or jurisdiction in which
such offering may not lawfully be made.
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EXPENSES
The following information is provided in order to help you understand the
various costs and expenses that you, as an investor in the Fund, will bear
directly or indirectly.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
<S> <C>
Sales Load Imposed on Purchases NONE
Sales Load Imposed on Reinvested Dividends NONE
Deferred Sales Load NONE
Redemption Fees NONE
Exchange Fees NONE
</TABLE>
There are certain charges associated with retirement accounts (such as a $10
charge for closing an IRA account) and with certain other special shareholder
services offered by the Fund. Additionally, purchases and redemptions may also
be made through broker-dealers or other financial intermediaries who may charge
fees for their services. (See "Shareholder Manual - How to Buy Shares" and "-
How to Sell Shares.")
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MANAGEMENT OTHER 12B-1 TOTAL OPERATING
FUND FEES EXPENSES FEES EXPENSES
- -------------------- ----------- ----------- ----------- ---------------
U.S. Emerging Growth 1.00% 0.59% NONE 1.59%
- -------------------- ----------- ----------- ----------- ---------------
</TABLE>
From time to time, the Fund's investment advisor, Strong Capital Management,
Inc. ("Advisor"), may voluntarily waive its management fee and/or absorb
certain expenses for the Fund. Since the Fund did not begin operations until
December 30, 1998, the Other Expenses have been estimated. For additional
information concerning fees and expenses, see "About the Fund - Management."
EXAMPLE. You would pay the following expenses on a $1,000 investment, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
PERIOD (IN YEARS)
<S> <C> <C>
FUND 1
3
U.S. Emerging Growth $16 $50
</TABLE>
The Example is based on the Fund's "Total Operating Expenses," as described
above. PLEASE REMEMBER THAT THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND THAT ACTUAL EXPENSES MAY BE
HIGHER OR LOWER THAN THOSE SHOWN. The assumption in the Example of a 5% annual
return is required by regulations of the SEC applicable to all mutual funds.
The assumed 5% annual return is not a prediction of, and does not represent,
the projected or actual performance of the Fund's shares.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund is required to invest a substantial portion of its assets in equity
securities. Accordingly, the Fund's net asset value will fluctuate based upon
changes in the value of the securities in its portfolio, and the Fund's net
asset value is likely to fluctuate more than that of a fund invested
principally in fixed income securities. The Fund, therefore, is not appropriate
for investors' short-term financial needs.
The Fund has adopted certain fundamental investment restrictions that are set
forth in its SAI. Those restrictions, the Fund's investment objective, and any
other investment policies identified as "fundamental" cannot be changed without
shareholder approval. To further guide investment activities, the Fund has also
instituted a number of non-fundamental operating policies, which are described
throughout this Prospectus and in the SAI. Although operating policies may be
changed by the Fund's Board of Directors without shareholder approval, the Fund
will promptly notify shareholders of any material change in operating policies.
Except as limited below, the Fund may invest in a diversified portfolio of
securities without regard to objective investment criteria, such as company
size, exchange listing, earnings history, or other factors. When selecting
securities, the Advisor will, except as otherwise limited below, be limited
only by its best judgment as to what will help achieve the Fund's investment
objective.
STRONG U.S. EMERGING GROWTH FUND
The Fund seeks capital growth. The Fund invests primarily in equity securities
of U.S. issuers that the Advisor believes have substantial potential for high
long-term growth.
Under normal market conditions, the Fund will invest at least 65% of its total
assets in equity securities of U.S. issuers that the Advisor believes have
substantial potential for high long-term growth, including common stocks,
preferred stocks, and securities that are convertible into common or preferred
stocks, such as warrants and convertible bonds. While the emphasis of the Fund
is clearly on equity securities, the Fund may invest a limited portion of its
assets in debt obligations when the Advisor perceives that they are more
attractive than stocks on a long-term basis. The Fund may invest up to 35% of
its total assets in debt obligations, including intermediate- to long-term
corporate or U.S. government debt securities. Although these debt obligations
primarily will be investment grade, the Fund may invest up to 5% of its net
assets in non-investment-grade debt obligations. (See "Implementation of
Policies and Risks - Debt Obligations.") When the Advisor determines that
market conditions warrant a temporary defensive position, the Fund may invest
without limitation in cash and short-term fixed-income securities.
The Fund may invest up to 25% of its net assets in foreign securities,
including both direct investments and investments made through depositary
receipts. (See "Implementation of Policies and Risks - Foreign Securities and
Currencies" for the special risks associated with foreign investments.)
The Fund generally will invest in companies whose revenues and earnings are
believed to offer a relatively strong long-term growth potential. In
identifying these companies, the Advisor ordinarily looks to several
characteristics, such as the following:
- - prospects for above-average sales and earnings growth;
- - high return on invested capital;
- - overall financial strength, including sound financial and accounting policies
and a strong
balance sheet;
- - competitive advantages, including innovative products and service;
- - current market price of stock reflects fair value;
- - effective research, product development, and marketing; and
- - stable, capable management.
<PAGE>
IMPLEMENTATION OF POLICIES AND RISKS
In addition to the investment policies described above (and subject to certain
restrictions described below), the Fund may invest in some or all of the
following securities and may employ some or all of the following investment
techniques, some of which may present special risks as described below. The
Fund may also engage in reverse repurchase agreements and mortgage dollar roll
transactions. A more complete discussion of certain of these securities and
investment techniques and the associated risks is presented in the SAI.
FOREIGN SECURITIES AND CURRENCIES
The Fund may invest in foreign securities either directly or indirectly
through the use of depositary receipts. Depositary receipts are generally
issued by banks or trust companies and evidence ownership of underlying
foreign securities. Foreign investments involve special risks, including:
- - expropriation, confiscatory taxation, and withholding taxes on dividends and
interest;
- - less extensive regulation of foreign brokers, securities markets, and
issuers;
- - less publicly available information and different accounting standards;
- - costs incurred in conversions between currencies, possible delays in
settlement in foreign securities markets, limitations on the use or transfer
of assets (including suspension of the ability to transfer currency from a
given country), and difficulty of enforcing obligations in other countries;
and
- - diplomatic developments and political or social instability.
Foreign economies may differ favorably or unfavorably from the U.S. economy in
various respects, including growth of gross domestic product, rates of
inflation, currency depreciation, capital reinvestment, resource
self-sufficiency, and balance-of-payments positions. Many foreign securities
may be less liquid and their prices more volatile than comparable U.S.
securities. Although the Fund generally invests only in securities that are
regularly traded on recognized exchanges or in over-the-counter ("OTC")
markets, from time to time foreign securities may be difficult to liquidate
rapidly without adverse price effects. Certain costs attributable to foreign
investing, such as custody charges and brokerage costs, may be higher than
those attributable to domestic investing.
The Fund may purchase and sell foreign currency on a spot basis and may engage
in forward currency contracts, currency options, and futures transactions for
hedging or any other lawful purpose. (See "Derivative Instruments.")
FOREIGN INVESTMENT COMPANIES
The Fund may invest, to a limited extent, in foreign investment companies.
Some of the countries in which the Fund invests may not permit direct
investment by outside investors. Investments in such countries may only be
permitted through foreign government-approved or -authorized investment
vehicles, which may include other investment companies. In addition, it may be
less expensive and more expedient for the Fund to invest in a foreign
investment company in a country which permits direct foreign investment.
Investing through such vehicles may involve frequent or layered fees or
expenses and may also be subject to limitation under the Investment Company
Act of 1940 ("1940 Act"). The Fund does not intend to invest in such
investment companies unless, in the judgment of the Advisor, the potential
benefits of such investments justify the payment of any associated fees or
expenses.
DERIVATIVE INSTRUMENTS
The Fund may use derivative instruments for any lawful purpose consistent with
the Fund's investment objective such as hedging or managing risk. Derivative
instruments are commonly defined to include securities or contracts whose
values depend on (or "derive" from) the value of one or more other assets,
such as securities, currencies, or commodities. These "other assets" are
commonly referred to as "underlying assets."
A derivative instrument generally consists of, is based upon, or exhibits
characteristics similar to OPTIONS or FORWARD CONTRACTS. Options and forward
contracts are considered to be the basic "building blocks" of derivatives. For
example, forward-based derivatives include forward contracts, swap contracts,
<PAGE>
as well as exchange-traded futures. Option-based derivatives include privately
negotiated, OTC options (including caps, floors, collars, and options on
forward and swap contracts) and exchange-traded options on futures. Diverse
types of derivatives may be created by combining options or forward contracts
in different ways, and by applying these structures to a wide range of
underlying assets.
An option is a contract in which the "holder" ("buyer") pays a certain amount
("premium") to the "writer" ("seller") to obtain the right, but not the
obligation, to buy from the writer (in a "call") or sell to the writer (in a
"put") a specific asset at an agreed upon price at or before a certain time.
The holder pays the premium at inception and has no further financial
obligation. The holder of an option-based derivative generally will benefit
from favorable movements in the price of the underlying asset but is not
exposed to corresponding losses due to adverse movements in the value of the
underlying asset. The writer of an option-based derivative generally will
receive fees or premiums but generally is exposed to losses due to changes in
the value of the underlying asset.
A forward is a sales contract between a buyer (holding the "long" position)
and a seller (holding the "short" position) for an asset with delivery
deferred until a future date. The buyer agrees to pay a fixed price at the
agreed future date and the seller agrees to deliver the asset. The seller
hopes that the market price on the delivery date is less than the agreed upon
price, while the buyer hopes for the contrary. The change in value of a
forward-based derivative generally is roughly proportional to the change in
value of the underlying asset.
Derivative instruments may include (i) options; (ii) futures; (iii) options on
futures; (iv) short sales in which the Fund sells a security for delivery at a
future date; (v) swaps, in which two parties agree to exchange a series of
cash flows in the future, such as interest-rate payments; (vi) interest-rate
caps, under which, in return for a premium, one party agrees to make payments
to the other to the extent that interest rates exceed a specified rate, or
"cap"; (vii) interest-rate floors, under which, in return for a premium, one
party agrees to make payments to the other to the extent that interest rates
fall below a specified level, or "floor"; (viii) forward currency contracts
and foreign currency exchange-related securities; and (ix) structured
instruments which combine the foregoing in different ways.
Derivatives may be exchange traded or traded in OTC transactions between
private parties. OTC transactions are subject to additional risks, such as the
credit risk of the counterparty to the instrument and are less liquid than
exchange-traded derivatives since they often can only be closed out with the
other party to the transaction. Derivative instruments may include elements of
leverage and, accordingly, the fluctuation of the value of the derivative
instrument in relation to the underlying asset may be magnified. When required
by SEC guidelines, the Fund will set aside permissible liquid assets in a
segregated account to secure its obligations under the derivative.
The successful use of derivatives by the Fund is dependent upon a variety of
factors, particularly the Advisor's ability to correctly anticipate trends in
the underlying asset. In a hedging transaction, if the Advisor incorrectly
anticipates trends in the underlying asset, the Fund may be in a worse
position than if no hedging had occurred. In addition, there may be imperfect
correlation between the Fund's derivative transactions and the instruments
being hedged. To the extent that the Fund is engaging in derivative
transactions for risk management, the Fund's successful use of such
transactions is more dependent upon the Advisor's ability to correctly
anticipate such trends, since losses in these transactions may not be offset
by gains in the Fund's portfolio or in lower purchase prices for assets it
intends to acquire. The Advisor's prediction of trends in underlying assets
may prove to be inaccurate, which could result in substantial losses to the
Fund.
The Fund may also use derivative instruments to make investments that are
consistent with the Fund's investment objective but that are impracticable or
not feasible in the cash market (E.G., using derivative instruments to create
a synthetic security or to derive exposure to a region or asset class when
cash markets are inefficient and/or illiquid). The Fund will only engage in
this strategy when the Advisor reasonably believes it to be more advantageous
to the Fund.
In addition to the derivative instruments and strategies described above, the
Advisor expects to discover additional derivative instruments and other
trading techniques. The Advisor may utilize these
<PAGE>
new derivative instruments and techniques to the extent that they are
consistent with the Fund's investment objective and permitted by the Fund's
investment limitations, operating policies, and applicable regulatory
authorities.
ILLIQUID SECURITIES
The Fund may invest up to 15% of its net assets in illiquid securities.
Illiquid securities are those securities that are not readily marketable,
including restricted securities and repurchase obligations maturing in more
than seven days. Certain restricted securities that may be resold to
institutional investors pursuant to Rule 144A under the Securities Act of 1933
and Section 4(2) commercial paper may be determined liquid under guidelines
adopted by the Fund's Board of Directors.
SMALL AND MEDIUM COMPANIES
The Fund may invest in the securities of small and medium companies. While
small and medium companies generally have potential for rapid growth,
investments in small and medium companies often involve greater risks than
investments in larger, more established companies because small and medium
companies may lack the management experience, financial resources, product
diversification, and competitive strengths of larger companies. In addition,
in many instances the securities of small and medium companies are traded only
OTC or on a regional securities exchange, and the frequency and volume of
their trading is substantially less than is typical of larger companies.
Therefore, the securities of small and medium companies may be subject to
greater and more abrupt price fluctuations. When making large sales, the Fund
may have to sell portfolio holdings at discounts from quoted prices or may
have to make a series of small sales over an extended period of time due to
the trading volume of small and medium company securities. Investors should be
aware that, based on the foregoing factors, an investment in the Fund may be
subject to greater price fluctuations than an investment in a fund that
invests primarily in larger, more established companies. The Advisor's
research efforts may also play a greater role in selecting securities for the
Fund than in a fund that invests in larger, more established companies.
DEBT OBLIGATIONS
IN GENERAL. Debt obligations in which the Fund may invest will be primarily
investment-grade debt obligations, although the Fund may invest up to 5% of
its net assets in non-investment-grade debt obligations. The market value of
all debt obligations is affected by changes in the prevailing interest rates.
The market value of such instruments generally reacts inversely to interest
rate changes. If the prevailing interest rates decline, the market value of
debt obligations generally increases. If the prevailing interest rates
increase, the market value of debt obligations generally decreases. In
general, the longer the maturity of a debt obligation, the greater its
sensitivity to changes in interest rates.
Investment-grade debt obligations include:
- - U.S. government securities;
- - bonds or bank obligations rated in one of the four highest rating categories
(E.G., BBB or higher by S&P);
- - short-term notes rated in one of the two highest rating categories (E.G.,
SP-2 or higher by S&P);
- - short-term bank obligations rated in one of the three highest rating
categories (E.G., A-3 or higher by S&P), with respect to obligations maturing
in one year or less;
- - commercial paper rated in one of the three highest rating categories (E.G.,
A-3 or higher by S&P);
- - unrated debt obligations determined by the Advisor to be of comparable
quality; and
- - repurchase agreements involving investment-grade debt obligations.
Investment-grade debt obligations are generally believed to have relatively
low degrees of credit risk. All ratings are determined at the time of
investment. Any subsequent rating downgrade of a debt obligation will be
monitored by the Advisor to consider what action, if any, the Fund should take
consistent with its investment objective. For purposes of determining whether
a security is investment grade, the Advisor may use the highest rating
assigned to that security by any nationally recognized statistical rating
organizations ("NRSROs"). Securities rated in the fourth-highest category
(e.g., BBB by
<PAGE>
S&P), although considered investment grade, have speculative characteristics
and may be subject to greater fluctuations in value than higher-rated
securities. Non-investment-grade debt obligations include:
- - securities rated as low as C by S&P or their equivalents;
- - commercial paper rated as low as C by S&P or its equivalents; and
- - unrated debt securities judged to be of comparable quality by the Advisor.
U.S. GOVERNMENT SECURITIES
U.S. government securities are issued or guaranteed by the U.S. government or
its agencies or instrumentalities. Securities issued by the government include
U.S. Treasury obligations, such as Treasury bills, notes, and bonds.
Securities issued by government agencies or instrumentalities include
obligations of the following:
- - the Federal Housing Administration, Farmers Home Administration,
Export-Import Bank of the United States, Small Business Administration, and
the Government National Mortgage Association ("GNMA"), including GNMA
pass-through certificates, whose securities are supported by the full faith
and credit of the United States;
- - the Federal Home Loan Banks, Federal Intermediate Credit Banks, and the
Tennessee Valley Authority, whose securities are supported by the right of
the agency to borrow from the U.S. Treasury;
- - the Federal National Mortgage Association, whose securities are supported by
the discretionary authority of the U.S. government to purchase certain
obligations of the agency or instrumentality; and
- - the Student Loan Marketing Association, the Interamerican Development Bank,
and International Bank for Reconstruction and Development, whose securities
are supported only by the credit of such agencies.
Although the U.S. government provides financial support to such U.S.
government-sponsored agencies or instrumentalities, no assurance can be given
that it will always do so. The U.S. government and its agencies and
instrumentalities do not guarantee the market value of their securities;
consequently, the value of such securities will fluctuate.
WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES
The Fund may invest in securities purchased on a when-issued or
delayed-delivery basis. Although the payment and interest terms of these
securities are established at the time the purchaser enters into the
commitment, these securities may be delivered and paid for at a future date.
Purchasing when-issued or delayed-delivery securities allows the Fund to lock
in a fixed price or yield on a security it intends to purchase. However, when
the Fund purchases these types of securities, it immediately assumes the risk
of ownership, including the risk of price fluctuation.
The greater the Fund's outstanding commitments for these securities, the
greater the exposure to potential fluctuations in the net asset value of the
Fund. Purchasing when-issued or delayed-delivery securities may involve the
additional risk that the yield available in the market when the delivery
occurs may be higher or the market price lower than that obtained at the time
of commitment. Although the Fund may be able to sell these securities prior to
the delivery date, it will purchase them for the purpose of actually acquiring
the securities, unless, after entering into the commitment, a sale appears
desirable for investment reasons. When required by SEC guidelines, the Fund
will set aside permissible liquid assets in a segregated account to secure its
outstanding commitments for these types of securities.
CASH MANAGEMENT
The Fund may invest directly in cash and short-term fixed-income securities,
including, for this purpose, shares of one or more money market funds managed
by the Advisor (collectively, "Strong Money Funds"). The Strong Money Funds
seek current income, a stable share price of $1.00, and daily liquidity. All
money market instruments can change in value when interest rates or an
issuer's creditworthiness change dramatically. The Strong Money Funds cannot
guarantee that they will always be able to maintain a stable net asset value
of $1.00 per share. The Fund may also participate in pooled transactions
involving cash and short-term fixed-income securities with other Strong Funds.
<PAGE>
PORTFOLIO TURNOVER
The annual portfolio turnover rate indicates changes in the Fund's portfolio.
The turnover rate may vary from year to year, as well as within a year. It may
also be affected by sales of portfolio securities necessary to meet cash
requirements for redemption of shares. High portfolio turnover in any year
will result in the payment by the Fund of above-average amounts of transaction
costs and could result in the payment by shareholders of above-average amounts
of taxes on realized investment gains. Under normal market conditions, the
rate of portfolio turnover of the Fund generally will not exceed 300%.
ABOUT THE FUND
MANAGEMENT
The Board of Directors of the Fund is responsible for managing its business
and affairs. The Fund has entered into an investment advisory agreement with
Strong Capital Management, Inc. ("Advisor"). Under the terms of the agreement,
the Advisor manages the Fund's investments and business affairs subject to the
supervision of the Fund's Board of Directors.
ADVISOR. The Advisor began conducting business in 1974. Since then, its
principal business has been providing continuous investment supervision for
individuals and institutional accounts, such as pension funds and
profit-sharing plans, as well as mutual funds, several of which are funding
vehicles for variable insurance products. As of November 30, 1998, the Advisor
had over $32 billion under management. The Advisor's principal mailing address
is P.O. Box 2936, Milwaukee, Wisconsin 53201. Mr. Richard S. Strong, the
Chairman of the Board of the Fund, is the controlling shareholder of the
Advisor.
As compensation for its services, the Fund pays the Advisor a monthly
management fee. The annual fee is 1.00% of the Fund's average daily net asset
value. From time to time, the Advisor may voluntarily waive all or a portion
of its management fee and/or absorb certain Fund expenses without further
notification of the commencement or termination of such waiver or absorption.
Any such waiver or absorption will temporarily lower the Fund's overall
expense ratio and increase the Fund's overall return to investors.
Except for expenses assumed by the Advisor or Strong Investments, Inc., the
Fund's distributor, the Fund is responsible for all its other expenses,
including, without limitation, interest charges, taxes, brokerage commissions,
and similar expenses; expenses of issue, sale, repurchase, or redemption of
shares; expenses of registering or qualifying shares for sale with the states
and the SEC; expenses of printing and distribution of prospectuses to existing
shareholders; charges of custodians (including fees as custodian for keeping
books and similar services for the Fund), transfer agents (including the
printing and mailing of reports and notices to shareholders), registrars,
auditing and legal services, and clerical services related to recordkeeping
and shareholder relations; printing of stock certificates; fees for directors
who are not "interested persons" of the Advisor; expenses of indemnification;
extraordinary expenses; and costs of shareholder and director meetings.
The Advisor permits portfolio managers and other persons who may have access
to information about the purchase or sale of securities in the Fund's
portfolio ("access persons") to purchase and sell securities for their own
accounts, subject to the Advisor's policy governing personal investing. The
policy requires access persons to conduct their personal investment activities
in a manner that the Advisor believes is not detrimental to the Fund or to the
Advisor's other advisory clients. Among other things, the policy requires
access persons to obtain preclearance before executing personal trades and
prohibits access persons from keeping profits derived from the purchase or
sale of the same security within 60 calendar days. See the SAI for more
information.
YEAR 2000 RISKS. Like other mutual funds and financial and business
operations around the world, the Fund could be adversely affected if the
computer software, and to a lesser extent, hardware used by the Advisor and
other service providers are not able to process and calculate date-related
information and data before, during, and after January 1, 2000. This is
commonly known as the "Year 2000 Issue." The Advisor is taking steps that it
believes are reasonably designed to address the Year 2000 Issue with respect
to the computer software and hardware that it uses and to obtain satisfactory
assurances that comparable
<PAGE>
steps are being taken by the Fund's other major service providers. However,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on the Fund.
SUBADVISOR. Under a subadvisory agreement between the Advisor and Next Century
Growth Investors, LLC (the "Subadvisor") ("Subadvisory Agreement"), the
Subadvisor, pursuant to the oversight and supervision of the Fund's Board of
Directors and the Advisor, provides a continuous investment program for the
Fund. Under the Subadvisory Agreement, the Subadvisor is responsible both for
determining the securities to be purchased and sold by the Fund and for
executing those transactions. However, the Advisor is responsible for managing
the cash-equivalent investments maintained by the Fund in the ordinary course
of its business, which are expected to be no more than 10%-15% of the Fund's
total assets. As compensation for its services, the Advisor (not the Fund)
pays the Subadvisor a monthly fee based on the following annual rates. The
Advisor will pay the Subadvisor 50% of the net management fees collected by
the Advisor from the Fund. The Subadvisor bears all of its own expenses in
providing subadvisory services to the Fund.
The Subadvisor was formed in November 1998 to provide subadvisory services to
the Fund and investment supervision to institutional investors and high net
worth clients. The Subadvisor is a limited liability company organized in
Delaware. The portfolio managers (described below) are the President and
Chairman and Chief Executive Officer of the Subadvisor. The Advisor is a
member of the Subadvisor. The Subadvisor's address is 5500 Wayzata Boulevard,
Suite 975, Minneapolis, Minnesota 55416.
PORTFOLIO MANAGERS
DONALD M. LONGLET. Mr. Longlet has been President of the Subadvisor and a
portfolio manager since December 1998. For 9 years prior to that, Mr. Longlet
was employed by Jundt Associates, Inc. Mr. Longlet also served as Vice
President and Treasurer of the Jundt Growth Fund since 1991 and the Jundt
Funds, Inc. since 1995. From 1983 until 1989, Mr. Longlet was a portfolio
manager for AMEV Advisers, Inc. (now known as Fortis Advisers, Inc.) Mr.
Longlet began his investment career in 1968 with Northwestern National Bank of
Minneapolis (now known as Norwest Bank Minnesota, National Association), where
he served as a security analyst and portfolio manager until 1982. Mr. Longlet
received his B.A. in Philosophy from the University of Minnesota in 1967.
THOMAS L. PRESS. Mr. Press has been Chairman and Chief Executive Officer of
the Subadvisor and a portfolio manager since December 1998. For five years
prior to that, Mr. Press served as a portfolio manager of the Jundt Growth
Fund since 1993 and the Jundt Funds, Inc. since 1995. Mr. Press was a Senior
Vice President of Investment Advisers, Inc. and co-manager of the IAI Emerging
Growth Fund from 1992 until 1993. From 1987 to 1992, Mr. Press was a Vice
President of Institutional Sales at Morgan Stanley & Co. Prior to that, Mr.
Press was an institutional salesman and trader at Salomon Brothers Inc. Mr.
Press received his B.A. in Business Administration from the University of
Minnesota in 1979 and his M.B.A. in Marketing from the University of St.
Thomas in 1984.
TRANSFER AND DIVIDEND-DISBURSING AGENT
The Advisor, P.O. Box 2936, Milwaukee, Wisconsin 53201, also acts as
dividend-disbursing agent and transfer agent for the Fund. The Advisor is
compensated for its services based on an annual fee per account plus certain
out-of-pocket expenses. The fees received and the services provided as
transfer agent and dividend-disbursing agent are in addition to those received
and provided under the Advisory Agreement between the Advisor and the Fund.
DISTRIBUTOR
Strong Investments, Inc., P.O. Box 2936, Milwaukee, Wisconsin 53201, an
indirect subsidiary of the Advisor, acts as distributor of the shares of the
Fund.
ORGANIZATION
SHAREHOLDER RIGHTS. The Fund is a series of Strong Equity Funds, Inc., a
Wisconsin corporation that is authorized to issue shares of common stock and
series and classes of series of shares of common stock. Each share of the Fund
has one vote, and all shares participate equally in dividends and other capital
<PAGE>
gains distributions and in the residual assets of the Fund in the event of
liquidation. Certificates will be issued for shares held in your account only
upon your written request. You will, however, have full shareholder rights
whether or not you request certificates. Generally, the Fund will not hold an
annual meeting of shareholders unless required by the 1940 Act. Shareholders
have certain rights, including the right to call an annual meeting upon a vote
of 10% of the Fund's outstanding shares for the purpose of voting to remove one
or more directors or to transact any other business. The 1940 Act requires the
Fund to assist the shareholders in calling such a meeting.
SHAREHOLDER PRIVILEGES. The shareholders of the Fund may benefit from the
privileges described in the "Shareholder Manual" (see Page II-1). However, the
Fund reserves the right, at any time and without prior notice, to suspend,
limit, modify, or terminate any of these privileges or their use in any manner
by any person or class.
DISTRIBUTIONS AND TAXES
PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS. Unless you choose otherwise, all
your dividends and capital gains distributions will be automatically
reinvested in additional Fund shares. Or, you may elect to have all your
dividends and capital gain distributions from the Fund automatically invested
in additional shares of another Strong Fund. Shares are purchased at the net
asset value determined on the payment date. If you request in writing that
your dividends and other distributions be paid in cash, the Fund will credit
your bank account by Electronic Funds Transfer ("EFT") or issue a check to you
within five business days of the payment date. You may change your election at
any time by calling or writing the Fund. The Fund must receive any such change
7 days (15 days for EFT) prior to a dividend or capital gain distribution
payment date in order for the change to be effective for that payment. The
policy of each Fund is to pay dividends from net investment income annually
and to distribute substantially all net realized capital gains and gains from
foreign currency transactions annually. The Fund may make additional
distributions if necessary to avoid imposition of a 4% excise tax on
undistributed income and gains.
TAX STATUS OF DIVIDENDS AND OTHER DISTRIBUTIONS. You will be subject to
federal income tax at ordinary income tax rates on any dividends you receive
that are derived from investment company taxable income (consisting generally
of net investment income, net short-term capital gain, and net gains from
certain foreign currency transactions, if any). Distributions of net capital
gain (the excess of net long-term capital gain over net short-term capital
loss), when designated as such by the Fund, are taxable to you as long-term
capital gains, regardless of how long you have held your Fund shares. The
Fund's distributions are taxable in the year they are paid, whether they are
taken in cash or reinvested in additional shares, except that certain
distributions declared in the last three months of the year and paid in
January are taxable as if paid on December 31.
If the Fund's distributions exceed its investment company taxable income and
net capital gain in any year, as a result of currency-related losses or
otherwise, all or a portion of those distributions may be treated as a return
of capital to shareholders for tax purposes.
YEAR-END TAX REPORTING. After the end of each calendar year, you will receive
a statement (Form 1099) of the federal income tax status of all dividends and
other distributions paid (or deemed paid) during the year.
SHARES SOLD OR EXCHANGED. Your redemption of shares of the Fund may result in
a taxable gain or loss to you, depending upon whether the redemption proceeds
payable to you are more or less than your adjusted cost basis for the redeemed
shares. Similar tax consequences generally will result from an exchange of
shares of the Fund for shares of another Strong Fund. If you purchase shares
of the Fund within 30 days before or after redeeming shares of the same Fund
at a loss, a portion or all of that loss will not be deductible and will
increase the cost basis of the newly purchased shares. If you redeem shares
out of a non-IRA retirement account, you will be subject to withholding for
federal income tax purposes unless you transfer the distribution directly to
an "eligible retirement plan."
<PAGE>
BUYING A DISTRIBUTION. A distribution paid shortly after you have purchased
shares in the Fund will reduce the net asset value of the shares by the amount
of the distribution, which nevertheless will be taxable to you even though it
represents a return of a portion of your investment.
BACKUP WITHHOLDING. If you are an individual or certain other noncorporate
shareholder and do not furnish the Fund with a correct taxpayer identification
number, the Fund is required to withhold federal income tax at a rate of 31%
(backup withholding) from all dividends, capital gain distributions, and
redemption proceeds payable to you. Withholding at that rate from dividends
and capital gain distributions payable to you also is required if you
otherwise are subject to backup withholding. To avoid backup withholding, you
must provide a taxpayer identification number and state that you are not
subject to backup withholding due to the under-reporting of your income. This
certification is included as part of your application. Please complete it when
you open your account.
TAX STATUS OF THE FUND. The Fund intends to continue to qualify for treatment
as a regulated investment company under Subchapter M of the IRC and, if so
qualified, will not be liable for federal income tax on earnings and gains
distributed to its shareholders in a timely manner. This section is not
intended to be a full discussion of present or proposed federal income tax law
and its effects on the Fund and investors therein. See the SAI for a further
discussion. There may be other federal, state, or local tax considerations
applicable to a particular investor. You are therefore urged to consult your
own tax adviser.
PERFORMANCE INFORMATION
The Fund may advertise a variety of types of performance information,
including "average annual total return," "total return," and "cumulative total
return." Each of these figures is based upon historical results and does not
represent the future performance of the Fund. Average annual total return and
total return figures measure both the net investment income generated by, and
the effect of any realized and unrealized appreciation or depreciation of, the
underlying investments in the Fund assuming the reinvestment of all dividends
and other distributions. Total return figures are not annualized and simply
represent the aggregate change of the Fund's investments over a specified
period of time.
<PAGE>
SHAREHOLDER MANUAL
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HOW TO BUY SHARES II-1
DETERMINING YOUR SHARE PRICE II-5
HOW TO SELL SHARES II-6
SHAREHOLDER SERVICES II-9
REGULAR INVESTMENT PLANS II-10
RETIREMENT PLAN SERVICES II-12
SPECIAL SITUATIONS II-12
</TABLE>
HOW TO BUY SHARES
All the Strong Funds are 100% NO-LOAD, meaning you may purchase, redeem, or
exchange shares directly at net asset value without paying a sales charge.
Because the Fund's net asset value changes daily, your purchase price will be
the next net asset value determined after the Fund receives and accepts your
purchase order.
Whether you are opening a new account or adding to an existing one, the Fund
provides you with several methods to buy its shares.
<PAGE>
TO OPEN A NEW ACCOUNT
<TABLE>
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MAIL BY CHECK
Complete and sign the application. Make your check or money order
payable to "Strong Funds."
Mail to Strong Funds, P.O. Box 2936, Milwaukee, Wisconsin 53201. If
you're using an express delivery service, send to Strong Funds, 900
Heritage Reserve, Menomonee Falls, Wisconsin 53051.
BY EXCHANGE
Call 1-800-368-3863 for instructions on establishing an account with an
exchange by mail.
</TABLE>
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TELEPHONE BY EXCHANGE
Call 1-800-368-3863 to establish a new account by exchanging funds from
1-800-368-3863 an existing Strong Funds account.
24 HOURS A DAY, Sign up for telephone exchange services when you open your account. To
7 DAYS A WEEK add the telephone exchange option to your account, call 1-800-368-3863 for
a Shareholder Account Options Form.
Please note that your accounts must be identically registered and that you
must exchange enough into the new account to meet the minimum initial
investment.
Or use STRONG DIRECT(R), Strong Funds' automated telephone response system.
Call 1-800-368-7550.
</TABLE>
<TABLE>
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<S> <C>
IN PERSON Stop by our Investor Center in Menomonee Falls, Wisconsin. Call 1-800
368-3863 for hours and directions.
The Investor Center will only accept checks or money orders payable to
"Strong Funds."
</TABLE>
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WIRE Call 1-800-368-3863 for instructions on opening an account by wire.
</TABLE>
<TABLE>
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<S> <C>
AUTOMATICALLY USE STRONG'S "NO-MINIMUM INVESTMENT PROGRAM."
If you sign up for Strong's Automatic Investment Plan when you open your
account and contribute monthly, Strong Funds will waive the Fund's
minimum initial investment (see chart on page II-4).
Complete the Automatic Investment Plan section on the account
application.
Mail to the address indicated on the application.
</TABLE>
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BROKER-DEALER You may purchase shares in the Fund through a broker-dealer or other
institution that may charge a transaction fee.
Strong Funds may only accept requests to purchase shares into a broker
dealer street name account from the broker-dealer.
</TABLE>
<PAGE>
TO ADD TO AN EXISTING ACCOUNT
BY CHECK
- - Complete an Additional Investment Form provided at the bottom of your account
statement, or write a note indicating your fund account number and
registration. Make your check or money order payable to "Strong Funds."
- - Mail to Strong Funds, P.O. Box 2936, Milwaukee, Wisconsin 53201. If you're
using an express delivery service, send to Strong Funds, 900 Heritage
Reserve, Menomonee Falls, Wisconsin 53051.
BY EXCHANGE
- - Call 1-800-368-3863 for instructions on exchanging by mail.
BY EXCHANGE
- - Add to an account by exchanging funds from another Strong Funds account.
- - Sign up for telephone exchange services when you open your account. To add
the telephone exchange option to your account, call 1-800-368-3863 for a
Shareholder Account Options Form.
- - Please note that the accounts must be identically registered and that the
minimum exchange is $50 or the balance of your account, whichever is less.
BY TELEPHONE PURCHASE
- - Sign up for telephone purchase when you open your account to make additional
investments from $50 to $25,000 into your Strong Funds account by telephone.
To add this option to your account, call 1-800-368-3863 for a Shareholder
Account Options Form.
Or use STRONG DIRECT (R), Strong Funds' automated telephone response system.
Call 1-800-368-7550.
- - Stop by our Investor Center in Menomonee Falls, Wisconsin. Call
1-800-368-3863 for hours and directions.
- - The Investor Center can only accept checks or money orders.
Call 1-800-368-3863 for instructions on adding to an account by wire.
USE ONE OF STRONG'S AUTOMATIC INVESTMENT PROGRAMS. Sign up for these services
when you open your account, or call 1-800-368-3863 for instructions on how to
add them to your existing account.
- - AUTOMATIC INVESTMENT PLAN. Make regular, systematic investments (minimum $50)
into your Strong Funds account from your bank checking or NOW account.
Complete the Automatic Investment Plan section on the account application.
- - AUTOMATIC EXCHANGE PLAN. Make regular, systematic exchanges (minimum $50)
from one eligible Strong Funds account to another. Call 1-800-368-3863 for an
application.
- - PAYROLL DIRECT DEPOSIT. Have a specified amount (minimum $50) regularly
deducted from your paycheck, social security check, military allotment, or
annuity payment invested directly into your Strong Funds account. Call
1-800-368-3863 for an application.
- - AUTOMATIC DIVIDEND REINVESTMENT. Unless you choose otherwise, all your
dividends and capital gain distributions will be automatically reinvested in
additional Fund shares. Or, you may elect to have your dividends and capital
gain distributions automatically invested in shares of another Strong Fund.
- - You may purchase additional shares in the Fund through a broker-dealer or
other institution that may charge a transaction fee.
- - Strong Funds may only accept requests to purchase shares into a broker-dealer
street name account from the broker-dealer.
<PAGE>
WHAT YOU SHOULD KNOW ABOUT BUYING SHARES
- - Please make all checks or money orders payable to "Strong Funds."
- - We cannot accept third-party checks or checks drawn on banks outside the U.S.
- - You will be charged a $20 service fee for each check, wire, or Electronic
Funds Transfer ("EFT") purchase that is returned unpaid, and you will be
responsible for any resulting losses suffered by a Fund.
- - Further documentation may be requested from corporations, executors,
administrators, trustees, guardians, agents, or attorneys-in-fact.
- - The Fund reserves the right to decline to accept your purchase order upon
receipt for any reason.
- - Exchange Feature - Please note that certain Strong Funds that you may
exchange into may impose a redemption fee of 0.5% on shares held for less
than six months.
- - Minimum Investment Requirements:
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<S> <C>
To open a regular account $2,500
To open a traditional IRA, Roth IRA, or one-person SEP-IRA account
$250
To open an Education IRA account $500*
To open an UGMA/UTMA account $250
To open a SIMPLE, SEP-IRA, Keogh, Profit Sharing the lesser of $250
or Money Purchase Pension Plan, or 403(b) account or $25 per month
To open a qualified retirement plan account where the Advisor
or a financial intermediary provides administrative services No Minimum
To add to an existing account $50
</TABLE>
* Not eligible for the Automatic Investment Plan and No-Minimum Investment
Program.
The Fund offers a No-Minimum Investment Plan that waives the minimum initial
investment requirements for investors who participate in the Strong Automatic
Investment Plan and invest monthly (described on page II-11). Unless you
participate in the Strong No-Minimum Investment Program, please ensure your
purchases meet the minimum investment requirements.
Under certain circumstances (for example, if you discontinue a No-Minimum
Investment Program before you reach the Fund's minimum initial investment),
the Fund reserves the right to close your account. Before taking such action,
the Fund will provide you with written notice and at least 60 days in which to
reinstate an investment program or otherwise reach the minimum initial
investment required.
DETERMINING YOUR SHARE PRICE
Generally, when you make any purchases, sales, or exchanges, the price of your
shares will be the net asset value ("NAV") next determined after Strong Funds
receives your request in proper form. If Strong Funds receives such request
prior to the close of the New York Stock Exchange ("Exchange") on a day on
which the Exchange is open, your share price will be the NAV determined that
day. The NAV for the Fund is normally determined as of 3:00 p.m. Central Time
("CT") each day the Exchange is open. The Fund reserves the right to change
the time at which purchases, redemptions, and exchanges are priced if the
Exchange closes at a time other than 3:00 p.m. CT or if an emergency exists.
The Fund's NAV is calculated by taking the fair value of the Fund's total
assets, subtracting all its liabilities, and dividing by the total number of
shares outstanding. Expenses are accrued daily and applied when determining
the NAV.
<PAGE>
The Fund's portfolio securities are valued based on market quotations or at
fair value as determined by the method selected by the Fund's Board of
Directors. Equity securities traded on a national securities exchange or
NASDAQ are valued at the last sales price on the national securities exchange
or NASDAQ on which such securities are primarily traded. Securities traded on
NASDAQ for which there were no transactions on a given day or securities not
listed on an exchange or NASDAQ are valued at the average of the most recent
bid and asked prices. Other exchange-traded securities (generally foreign
securities) will be valued based on market quotations.
Securities quoted in foreign currency are valued daily in U.S. dollars at the
foreign currency exchange rates that are prevailing at the time the daily NAV
per share is determined. Although the Funds value their foreign assets in U.S.
dollars on a daily basis, they do not intend to convert their holdings of
foreign currencies into U.S. dollars on a daily basis. Foreign currency
exchange rates are generally determined prior to the close of trading on the
Exchange. Occasionally, events affecting the value of foreign investments and
such exchange rates occur between the time at which they are determined and
the close of trading on the Exchange. Such events would not normally be
reflected in a calculation of a Fund's NAV on that day. If events that
materially affect the value of a Fund's foreign investments or the foreign
currency exchange rates occur during such period, the investments will be
valued at their fair value as determined in good faith by or under the
direction of the Board of Directors.
HOW TO SELL SHARES
You can access the money in your account at any time by selling (redeeming)
some or all of your shares back to the Fund. Once your redemption request is
received in proper form, Strong will normally mail you the proceeds the next
business day and, in any event, no later than seven days thereafter.
To redeem shares, you may use any of the methods described in the following
chart. However, if you are selling shares in a retirement account, please call
1-800-368-3863 for instructions. Please note that there is a $10.00 fee for
closing an IRA or other retirement account or for transferring assets to
another custodian. For your protection, certain requests may require a
signature guarantee. (See "Special Situations - Signature Guarantees.")
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TO SELL SHARES
- -----------------------
MAIL FOR INDIVIDUAL, JOINT TENANT, AND UGMA/UTMA ACCOUNTS
Write a "letter of instruction" that includes the following information:
FOR YOUR PROTECTION your account number, the dollar amount or number of shares you wish
CERTAIN REDEMPTION to redeem, each owner's name, your street address, and the signature of
REQUESTS MAY REQUIRE A each owner as it appears on the account.
SIGNATURE
GUARANTEE. SEE "SPECIAL Mail to Strong Funds, P.O. Box 2936, Milwaukee, Wisconsin 53201. If
SITUATIONS - SIGNATURE you're using an express delivery service, send to 900 Heritage Reserve,
GUARANTEES." Menomonee Falls, Wisconsin 53051.
FOR TRUST ACCOUNTS
Same as above. Please ensure that all trustees sign the letter of
instruction.
FOR OTHER REGISTRATIONS
Call 1-800-368-3863 for instructions.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
TELEPHONE Sign up for telephone redemption services when you open your account. To
add the telephone redemption option to your account, call 1-800-368-3863
1-800-368-3863 for a Shareholder Account Options Form.
24 HOURS A DAY, Once the telephone redemption option is in place, you may sell shares by
7 DAYS A WEEK phone and arrange to receive the proceeds in one of three ways:
TO RECEIVE A CHECK BY MAIL
At no charge, we will mail a check to the address to which your
account is registered.
TO DEPOSIT BY EFT
At no charge, we will transmit the proceeds by Electronic Funds
Transfer (EFT) to a pre-authorized bank account. Usually, the funds
will arrive at your bank two banking days after we process your
redemption.
TO DEPOSIT BY WIRE
For a $10 fee, we will transmit the proceeds by wire to a pre-authorized
bank account. Usually, the funds will arrive at your bank the next
banking day after we process your redemption.
You may also use STRONG DIRECT(R), Strong Funds' automated telephone
response system. Call 1-800-368-7550.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
AUTOMATICALLY You can set up automatic withdrawals from your account at regular
intervals. To establish the Systematic Withdrawal Plan, request a form by
calling 1-800-368-3863.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
BROKER-DEALER You may also redeem shares through broker-dealers or other financial
intermediaries who may charge a transaction fee.
</TABLE>
<PAGE>
WHAT YOU SHOULD KNOW ABOUT SELLING SHARES
- - If you have recently purchased shares, please be aware that your redemption
request may not be honored until the purchase check or electronic transaction
has cleared your bank, which generally occurs within ten calendar days.
- - You will be charged a $10 service fee for a stop-payment and replacement of a
redemption or dividend check.
- - The right of redemption may be suspended during any period in which (i)
trading on the Exchange is restricted, as determined by the SEC, or the
Exchange is closed for other than weekends and holidays; (ii) the SEC has
permitted such suspension by order; or (iii) an emergency as determined by
the SEC exists, making disposal of portfolio securities or valuation of net
assets of the Fund not reasonably practicable.
- - If you are selling shares you hold in certificate form, you must submit the
certificates with your redemption request. Each registered owner must endorse
the certificates and all signatures must be guaranteed.
- - Further documentation may be requested from corporations, executors,
administrators, trustees, guardians, agents, or attorneys-in-fact.
REDEMPTIONS IN KIND
If the Advisor determines that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in securities
or other financial assets, valued for this purpose as they are valued in
computing the NAV for the Fund's shares. Shareholders receiving securities or
other financial assets on redemption may realize a gain or loss for tax
purposes, and will incur any costs of sale, as well as the associated
inconveniences.
WHAT YOU SHOULD KNOW ABOUT TELEPHONE REDEMPTIONS
- - The Fund reserves the right to refuse a telephone redemption if they believe
it advisable to do so.
- - Once you place your telephone redemption request, it cannot be canceled or
modified.
- - Investors will bear the risk of loss from fraudulent or unauthorized
instructions received over the telephone provided that the Fund reasonably
believes that such instructions are genuine. The Fund and their transfer
agent employ reasonable procedures to confirm that instructions communicated
by telephone are genuine. The Fund may incur liability if it does not follow
these procedures.
- - Because of increased telephone volume, you may experience difficulty in
implementing a telephone redemption during periods of dramatic economic or
market changes. In these situations, investors may want to consider using
STRONG DIRECT(R), our automated telephone system, to effect such a
transaction by calling 1-800-368-7550.
SHAREHOLDER SERVICES
INFORMATION SERVICES
24-HOUR ASSISTANCE. Strong Funds has registered representatives available to
help you 24 hours a day, 7 days a week. Call 1-414-359-1400 or toll-free
1-800-368-3863. You may also write to Strong Funds at the address on the cover
of this Prospectus, or e-mail us at [email protected].
STRONG DIRECT(R) AUTOMATED TELEPHONE SYSTEM. Also available 24 hours a day,
the STRONG DIRECT(R) automated response system enables you to use a touch-tone
phone to hear fund quotes and returns on any Strong Fund. You may also confirm
account balances, hear records of recent transactions and dividend activity
(1-800-368-5550), and perform purchases, exchanges or redemptions among your
existing Strong accounts (1-800-368-7550). You may also perform an exchange to
open a new Strong account provided that your account has the telephone
exchange option. Please note that your accounts must be identically registered
and you must exchange enough into the new account to meet the minimum initial
investment. Your account information is protected by a personal code.
STRONG NETDIRECT(R). Available 24 hours a day from your personal computer,
STRONG NETDIRECT(R) allows you to use the Internet to access your Strong Funds
account information. You may access specific account
<PAGE>
history, view current account balances, obtain recent dividend activity, and
perform purchases, exchanges, or redemptions among your existing Strong
accounts.
To register for netDirect, please visit our web site at
http://www.strongfunds.com. Your account information is protected by a
personal password and Internet encryption technology. For more information on
this service, please call 1-800-359-3379 or e-mail us at
[email protected].
STATEMENTS AND REPORTS. At a minimum, the Fund will confirm all transactions
for your account on a quarterly basis. We recommend that you file each
quarterly statement - and, especially, each calendar year-end statement - with
your other important financial papers, since you may need to refer to them at
a later date for tax purposes. Should you need additional copies of previous
statements, you may order confirmation statements for the current and
preceding year at no charge. Statements for earlier years are available for
$10 each. Call 1-800-368-3863 to order past statements.
Each year, you will also receive a statement confirming the tax status of any
distributions paid to you, as well as an annual report containing audited
financial statements and a semi-annual report.
To reduce the volume of mail you receive, only one copy of certain materials,
such as prospectuses and shareholder reports, is mailed to your household.
Call 1-800-368-3863 if you wish to receive additional copies, free of charge.
More complete information regarding the Fund's investment policies and
services is contained in its SAI, which you may request by calling or writing
Strong Funds at the phone number and address on the cover of this Prospectus.
CHANGING YOUR ACCOUNT INFORMATION. So that you continue receiving your Strong
correspondence, including any dividend checks and statements, please notify us
in writing as soon as possible or call us at 1-800-368-3863 if your address
changes. You may use the Additional Investment Form at the bottom of your
confirmation statement, or simply write us a letter of instruction that
contains the following information:
1. a written request to change the address,
2. the account number(s) for which the address is to be changed,
3. the new address, and
4. the signatures of all owners of the accounts.
Please send your request to the address on the cover of this Prospectus.
Changes to an account's registration - such as adding or removing a joint
owner, changing an owner's name, or changing the type of your account - must
also be submitted in writing. Please call 1-800-368-3863 for instructions. For
your protection, some requests may require a signature guarantee.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may exchange shares between identically registered
Strong Funds accounts, either in writing, by telephone, or through your
personal computer. By establishing exchange services, you authorize the Fund
and its agents to act upon your instruction through the telephone or personal
computer to exchange shares from any account you specify. For tax purposes, an
exchange is considered a sale and a purchase of Fund shares. Please obtain and
read the appropriate prospectus before investing in any of the Strong Funds.
Since an excessive number of exchanges may be detrimental to the Funds, the
Fund reserves the right to discontinue the exchange privilege of any
shareholder at any time.
REGULAR INVESTMENT PLANS
Strong Funds' Automatic Investment Plan, Payroll Direct Deposit Plan, and
Automatic Exchange Plan, all discussed below, are methods of implementing
DOLLAR COST AVERAGING. Dollar cost averaging is an investment strategy that
involves investing a fixed amount of money at regular time intervals. By
always investing the same set amount, you will be purchasing more shares when
the price is low and fewer shares when the price is high. Ultimately, by using
this principle in conjunction with fluctuations in share price, your average
cost per share may be less than your average transaction price. A program of
<PAGE>
regular investment cannot ensure a profit or protect against a loss during
declining markets. Since such a program involves continuous investment
regardless of fluctuating share values, you should consider your ability to
continue the program through periods of both low and high share-price levels.
AUTOMATIC INVESTMENT PLAN. The Automatic Investment Plan allows you to make
regular, systematic investments in the Fund from your bank checking, savings,
or NOW account. You may choose to make investments on any day of the month in
amounts of $50 or more. You can set up the Automatic Investment Plan with any
financial institution that is a member of the Automated Clearing House.
Because the Fund has the right to close an investor's account for failure to
reach the minimum initial investment, please consider your ability to continue
this Plan until you reach the minimum initial investment. To establish the
Plan, complete the Automatic Investment Plan section on the account
application, or call 1-800-368-3863 for an application.
PAYROLL DIRECT DEPOSIT PLAN. Once you meet the Fund's minimum initial
investment requirement, you may purchase additional Fund shares through the
Payroll Direct Deposit Plan. Through this Plan, periodic investments (minimum
$50) are made automatically from your payroll check into your existing Fund
account. By enrolling in the Plan, you authorize your employer or its agents
to deposit a specified amount from your payroll check into the Fund's bank
account. In most cases, your Fund account will be credited the day after the
amount is received by the Fund's bank. In order to participate in the Plan,
your employer must have direct deposit capabilities through the Automated
Clearing House available to its employees. The Plan may be used for other
direct deposits, such as social security checks, military allotments, and
annuity payments.
To establish Direct Deposit for your account, call 1-800-368-3863 to request a
form. Once the Plan is established, you may alter the amount of the deposit,
alter the frequency of the deposit, or terminate your participation in the
program by notifying your employer.
AUTOMATIC EXCHANGE PLAN. The Automatic Exchange Plan allows you to make
regular, systematic exchanges (minimum $50) from one Strong Funds account into
another Strong Funds account. By setting up the Plan, you authorize the Fund
and its agents to redeem a set dollar amount or number of shares from the
first account and purchase shares of a second Strong Fund. In addition, you
authorize the Fund and its agents to accept telephone instructions to change
the dollar amount and frequency of the exchange. An exchange transaction is a
sale and purchase of shares for federal income tax purposes and may result in
a capital gain or loss. To establish the Plan, request a form by calling
1-800-368-3863.
To participate in the Automatic Exchange Plan, you must have an initial
account balance of $5,000 in the first account. However, the minimum initial
investment in the second account is waived if you select a monthly investment
schedule. Exchanges may be made on any day or days of your choice. If the
amount remaining in the first account is less than the exchange amount you
requested, then the remaining amount will be exchanged. At such time as the
first account has a zero balance, your participation in the Plan will be
terminated. You may also terminate the Plan at any time by calling or writing
to the Fund. Once participation in the Plan has been terminated for any
reason, to reinstate the Plan you must do so in writing; simply investing
additional funds will not reinstate the Plan.
SYSTEMATIC WITHDRAWAL PLAN. You can set up automatic withdrawals from your
account at regular intervals. To begin distributions, you must have an initial
balance of $5,000 in your account and withdraw at least $50 per payment. To
establish the Systematic Withdrawal Plan, request a form by calling
1-800-368-3863. Depending upon the size of the account and the withdrawals
requested (and fluctuations in net asset value of the shares redeemed),
redemptions for the purpose of satisfying such withdrawals may reduce or even
exhaust the account. If the amount remaining in the account is not sufficient
to meet a Plan payment, the remaining amount will be redeemed and the Plan
will be terminated.
RETIREMENT PLAN SERVICES
We offer a wide variety of retirement plans for individuals and institutions,
including large and small businesses. For information on IRAs, including Roth
IRAs, or SEP-IRAs for a one-person business, call 1-800-368-3863. If you are
interested in opening a 401(k) or other company-sponsored retirement plan
<PAGE>
(SIMPLE, SEP, Keogh, 403(b)(7), pension or profit sharing), call 1-800-368-2882
and a Strong Retirement Plan Specialist will help you determine which
retirement plan would be best for your company. Complete instructions about
how to establish and maintain your plan and how to open accounts for you and
your employees will be included in the retirement plan kit you receive in the
mail.
SPECIAL SITUATIONS
POWER OF ATTORNEY. If you are investing as attorney-in-fact for another
person, please complete the account application in the name of such person and
sign the back of the application in the following form: "[applicant's name] by
[your name], attorney-in-fact." To avoid having to file an affidavit prior to
each transaction, please complete the Power of Attorney form available from
Strong Funds at 1-800-368-3863. However, if you would like to use your own
power of attorney form, please call the same number for instructions.
CORPORATIONS AND TRUSTS. If you are investing for a corporation, please
include with your account application a certified copy of your corporate
resolution indicating which officers are authorized to act on behalf of the
corporation. As an alternative, you may complete a Certification of Authorized
Individuals, which can be obtained from the Fund. Until a valid corporate
resolution or Certification of Authorized Individuals form is received by the
Fund, services such as telephone and wire redemption will not be established.
If you are investing as a trustee (including trustees of a retirement plan),
please include the date of the trust. All trustees must sign the application.
If they do not, services such as telephone and wire redemption will not be
established. All trustees must sign redemption requests unless proper
documentation to the contrary is provided to the Fund. Failure to provide
these documents or signatures as required when you invest may result in delays
in processing redemption requests.
FINANCIAL INTERMEDIARIES. If you purchase or redeem shares of a Fund through a
financial intermediary, certain features of the Fund relating to such
transactions may not be available or may be modified. In addition, certain
operational policies of the Fund, including those related to settlement and
dividend accrual, may vary from those applicable to direct shareholders of the
Fund and may vary among intermediaries. We urge you to consult your financial
intermediary for more information regarding these matters. In addition, a Fund
may pay, directly or indirectly through arrangements with the Advisor, amounts
to financial intermediaries that provide transfer agent type and/or other
administrative services to their customers provided, however, that the Fund
will not pay more for these services through intermediary relationships than
it would if the intermediaries' customers were direct shareholders in the
Fund. Certain financial intermediaries may charge an advisory, transaction, or
other fee for their services. You will not be charged for such fees if you
purchase or redeem your Fund shares directly from the Fund without the
intervention of a financial intermediary.
SIGNATURE GUARANTEES. A signature guarantee is designed to protect you and the
Fund against fraudulent transactions by unauthorized persons. In the following
instances, the Fund will require a signature guarantee for all authorized
owners of an account:
- - when you add the telephone redemption option to your existing account;
- - if you transfer the ownership of your account to another individual or
organization;
- - when you submit a written redemption request for more than $50,000;
- - when you request to redeem or redeposit shares that have been issued in
certificate form;
- - if you open an account and later decide that you want certificates;
- - when you request that redemption proceeds be sent to a different name or
address than is registered on your account;
- - if you add/change your name or add/remove an owner on your account; and
- - if you add/change the beneficiary on your transfer-on-death account.
A signature guarantee may be obtained from any eligible guarantor institution,
as defined by the SEC. These institutions include banks, savings associations,
credit unions, brokerage firms, and others. PLEASE NOTE THAT A NOTARY PUBLIC
STAMP OR SEAL IS NOT ACCEPTABLE.
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NOTES
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