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As filed with the Securities and Exchange Commission on September 23, 1996
Securities Act File No. 333-8889
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
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FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 / /
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 1 /X/
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PIPER FUNDS INC.--II
(Exact name of Registrant as specified in charter)
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402-3804
(Registrant's telephone number, including area code: (800) 866-7778
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William H. Ellis
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, Minnesota 55402-3804
(Name and address of agent for service)
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Copies to:
Kathleen L. Prudhomme, Esq. Stuart M. Strauss, Esq.
Dorsey & Whitney LLP Gordon Altman Butowsky
220 South Sixth Street Weitzen Shalov & Wein
Minneapolis, MN 55402-1498 114 West 47th Street
New York, NY 10036
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No filing fee is due because the Registrant has previously elected to register
an indefinite number of shares under the Securities Act of 1933 pursuant to the
provisions of Rule 24f-2 under the Investment Company Act of 1940 and such
election under Rule 24f-2 has not been terminated.
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PART C
PIPER FUNDS INC.--II
ADJUSTABLE RATE MORTGAGE SECURITIES FUND
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
Incorporated by reference to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-1A, File No. 33-60515, filed
December 18, 1995.
ITEM 16. EXHIBITS.
1.1 Articles of Incorporation (1)
1.2 Amendment to Articles of Incorporation (1)
2 Bylaws (1)
3 Not Applicable
4 Agreement and Plan of Reorganization is attached as Exhibit A to the
Prospectus/Proxy Statement included in Part A of this Registration
Statement on Form N-14.
5 See 1.1, 1.2 and 2 above.
6 Investment Advisory and Management Agreement (2)
7.1 Underwriting and Distribution Agreement (2)
7.2 Dealer Agreement (2)
8 Not Applicable
9 Custody and Investment Accounting Agreement (2)
10 Rule 12b-1 Plan (1)
11 Opinion and Consent of Dorsey & Whitney LLP with respect to the
legality of the securities being registered *
12 Opinion and Consent of Dorsey & Whitney LLP with respect to tax
matters **
C-1
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13 Not Applicable
14 Consent of KPMG Peat Marwick LLP *
15 Not Applicable
16 Power of Attorney *
17.1 Rule 24f-2 Election of Registrant (2)
17.2 Form of Proxy Card*
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* Incorporated by reference to the Registrant's Registration Statement on
Form N-14, File No. 333-8889, filed July 26, 1996.
** Filed herewith.
(1) Incorporated by reference to the Registrant's Registration Statement on
Form N-14, File No. 33-58849, filed April 26, 1995.
(2) Incorporated by reference to Registrant's initial Registration Statement on
Form N-1A filed June 23, 1995.
(3) Incorporated by reference to Post-Effective Amendment No. 2 to the
Registrant's Registration Statement on Form N-1A, File No. 33-60515, filed
December 18, 1995.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act, the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
C-2
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SIGNATURES
As required by the Securities Act of 1933, this registration statement has
been signed on behalf of the registrant, in the City of Minneapolis, State of
Minnesota, on the 23rd day of September 1996.
PIPER FUNDS INC.--II
By: /s/ Paul A. Dow
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Paul A. Dow, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
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/s/ Paul A. Dow President (principal September 23, 1996
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Paul A. Dow
/s/ Robert H. Nelson Treasurer (principal September 23, 1996
- --------------------------- financial and accounting
Robert H. Nelson officer)
David T. Bennett* Director
Jaye F. Dyer* Director
William H. Ellis* Director
Karol D. Emmerich* Director
Luella G. Goldberg* Director
- --------------------------- Director
David A. Hughey
George Latimer* Director
* By /s/ Robert H. Nelson September 23, 1996
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Robert H. Nelson
Attorney-in-Fact
C-4
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[Letterhead]
September 16, 1996
Piper Institutional Funds Inc.
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, MN 55402
Piper Funds Inc. - II
Piper Jaffray Tower
222 South Ninth Street
Minneapolis, MN 55402
Ladies and Gentlemen:
We have acted as counsel to Piper Institutional Funds Inc. and Piper
Funds Inc. - II in connection with the proposed acquisition of substantially
all of the assets and all of the stated liabilities of Institutional Government
Adjustable Portfolio ("Acquired Fund"), a series of Piper Institutional Funds
Inc., by Adjustable Rate Mortgage Securities Fund ("Acquiring Fund"), a series
of Piper Funds Inc. - II, pursuant to an Agreement and Plan of Reorganization
dated August 22, 1996 by and between Piper Institutional Funds Inc. on behalf of
Acquired Fund and Piper Funds Inc. - II on behalf of Acquiring Fund (the
"Agreement").
You have asked for our opinion concerning certain federal income
tax consequences of the transfer of substantially all of the assets of
Acquired Fund to Acquiring Fund and the assumption by Acquiring Fund of all
of the stated liabilities of Acquired Fund in exchange solely for Acquiring
Fund shares and the distribution of such shares to the shareholders of
Acquired Fund upon complete liquidation of Acquired Fund and cancellation of
Acquired Fund shares, all pursuant to the Agreement (the "Reorganization").
In this regard we have examined (1) the form of the Agreement included in the
Registration Statement on Form N-14 filed with the Securities and Exchange
Commission on July 26, 1996, (the "Registration Statement"), (2) the
Registration Statement (including, but not limited to, the Prospectus and
Proxy Statement included therein) and such other documents and records as we
consider necessary in order to render this opinion. Unless otherwise provided
herein, capitalized terms used in this opinion shall have the same meaning as
set forth in the Prospectus and Proxy Statement or the Agreement, as the case
may be.
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September 16, 1996
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Pursuant to the Agreement, all or substantially all of the assets and
all of the stated liabilities of Acquired Fund as of the Closing Date will be
exchanged for that number of Acquiring Fund shares having an aggregate value as
of the Valuation Date equal to the net value of assets of Acquired Fund as of
the Valuation Date. All of the Acquiring Fund shares then held by Acquired
Fund, representing all of the assets of Acquired Fund, will be distributed to
Acquired Fund shareholders pursuant to the Agreement (which includes the
cancellation and retirement of all the shares of Acquired Fund ).
The Boards of Directors of both Acquired Fund and Acquiring Fund,
including all of the "non-interested" directors, have determined that the
Reorganization is advantageous to both funds and is in the best interests of
each fund's respective shareholders. In approving the Reorganization, the
Boards considered, among other things, the following factors: (i) the total
expenses borne by shareholders of the combined fund should be lower on a
percentage basis than the total expenses per share of Acquired Fund; (ii)
shareholders of Acquired Fund will be able to acquire shares of Acquiring Fund,
which are otherwise subject to a maximum 1.50% front-end sales charge, at net
asset value and pursue a nearly identical investment objective in a larger and
more economically viable fund without having to sell their shares; and (iii)
Acquired Fund's shareholders will retain the capabilities and resources of Piper
Capital and its affiliates in the areas of operations, management, distribution,
shareholder servicing and marketing.
Our opinion is based upon existing law and currently applicable
Treasury Regulations, currently published administrative positions of the
Internal Revenue Service contained in Revenue Rulings and Revenue Procedures and
judicial decisions, all of which are subject to change prospectively and
retroactively. It is not a guarantee of the current status of the law and
should not be accepted as a guarantee that a court of law or an administrative
agency will concur in the opinion.
Our opinion is based on the Agreement, the other documents referred to
herein, the facts and assumptions stated above, as well as representations made
by Piper Institutional Funds Inc. in a Certificate dated September 16, 1996
(attached hereto as Exhibit A), representations made by Piper Funds Inc. - II
in a Certificate dated September 16, 1996 (attached hereto as Exhibit B),
representations made by Piper Capital Management Incorporated in a Certificate
dated September 16, 1996 (attached hereto as Exhibit C), and representations
made by certain 5% or greater shareholders of Acquired Fund in Certificates
dated September 12, 1996 (attached hereto as Exhibits D and E). In particular,
all of the 5% or greater shareholders of Acquired Fund except Methodist Hospital
(as described below) have represented that
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September 16, 1996
Page 3
they have no present plan or intention to dispose of the shares of Acquiring
Fund acquired in the Reorganization and that any sales of shares of Acquired
Fund made prior to the Reorganization were made for independent business reasons
unrelated to the Reorganization.
With respect to Methodist Hospital, we are assuming the following,
with your consent: Methodist Hospital, through Norwest Bank Minnesota, N.A., as
trustee, owns no more than 41.9% of the total outstanding shares of Acquired
Fund. Methodist Hospital has determined that its investment in the shares of
Acquired Fund is an inappropriate investment under the terms of the trust
indenture pursuant to which it holds the shares, and has decided to sell the
shares of Acquiring Fund to be acquired pursuant to the Reorganization.
Methodist Hospital will continue to hold its shares of Acquired Fund at the time
of the Reorganization and as a result of its ownership of those shares it will
receive shares of Acquiring Fund. Any eventual redemption of its shares of
Acquiring Fund will be at the net asset value of such shares next determined
after the redemption request, and the redemption will occur at least one
business day after the date of the Reorganization.
Based on the foregoing, including the assumptions set forth above with
respect to Methodist Hospital, on the provisions of the Code and judicial and
administrative interpretations as in existence on the date hereof, including,
without limitation, our analysis of the application of the continuity of
interest doctrine, SEE Treas. Reg. Section 1.368-1(b), and on the assumption
that the Agreement will be executed and the Reorganization will be carried out
pursuant to the Agreement, it is our opinion that the Reorganization will
constitute a reorganization within the meaning of Section 368(a)(1)(C) of the
Code, and that Acquiring Fund and Acquired Fund will each qualify as a party to
the reorganization within the meaning of Section 368(b) of the Code.
On the basis of the foregoing opinion that the Reorganization will
constitute a reorganization within the meaning of Section 368 of the Code, it is
further our opinion that:
(i) Acquired Fund shareholders will recognize no income, gain or
loss upon receipt, pursuant to the Reorganization, of Acquiring
Fund shares. Acquired Fund shareholders subject to taxation
will recognize income upon receipt of any net investment income
or net capital gains of Acquired Fund which are distributed by
Acquired Fund prior to the Reorganization;
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September 16, 1996
Page 4
(ii) the tax basis of the Acquiring Fund shares received by each
Acquired Fund shareholder pursuant to the Reorganization will
be equal to the tax basis of the Acquired Fund shares exchanged
therefor;
(iii) the holding period of Acquiring Fund shares received by each
Acquired Fund shareholder pursuant to the Reorganization will
include the period during which Acquired Fund shareholder held
Acquired Fund shares exchanged therefor, provided that Acquired
Fund shares were held as a capital asset on the date of the
Reorganization;
(iv) Acquired Fund will recognize no income, gain or loss by reason
of the Reorganization;
(v) Acquiring Fund will recognize no income, gain or loss by reason
of the Reorganization;
(vi) the tax basis of the assets received by Acquiring Fund pursuant
to the Reorganization will be the same as the basis of those
assets in the hands of Acquired Fund as of the Effective Time;
(vii) the holding period of the assets received by Acquiring Fund
pursuant to the Reorganization will include the period during
which such assets were held by Acquired Fund; and
(viii) Acquiring Fund will succeed to and take into account the
earnings and profits, or deficit in earning and profits, of
Acquired Fund immediately prior to the Reorganization.
We consent to the filing of this opinion as an exhibit to the above-
referenced Registration Statement and to the reference to this firm under the
caption "Information About the Reorganization -- Federal Income Tax
Consequences" in the Prospectus/Proxy Statement included in Part A of the
Registration Statement.
Very truly yours,
/s/ DORSEY & WHITNEY LLP
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EXHIBIT A
CERTIFICATE
THE UNDERSIGNED, Piper Institutional Funds Inc., in connection with
the transfer of substantially all of the assets of Institutional Government
Adjustable Portfolio ("Acquired Fund"), a series of Piper Institutional
Funds Inc. to Adjustable Rate Mortgage Securities Fund ("Acquiring Fund"), a
series of Piper Funds Inc. - II, pursuant to an Agreement and Plan of
Reorganization dated August 22, 1996 by and between Piper Institutional
Funds Inc., on behalf of Acquired Fund and Piper Funds Inc. - II on behalf of
Acquiring Fund (the "Agreement"), does hereby make the following representations
(all defined terms herein having the meaning assigned to them in the Agreement,
unless otherwise specified):
1. The fair market value of Acquiring Fund shares received by each
Acquired Fund Shareholder will be approximately equal to the fair market value
of Acquired Fund Shares surrendered in the exchange.
2. There are no owners of the shares of Acquired Fund who own five
percent (5%) or more of Acquired Fund shares, with the exception of Midsouth
National Bank, Greer State Bank, and Norwest Bank Minnesota, N.A., as trustee
for St. Louis Park/Methodist Hospital. To the best of the knowledge of
management of Acquired Fund, there is no plan or intention on the part of the
remaining Acquired Fund Shareholders to sell, exchange, or otherwise dispose of
a number of Acquiring Fund shares received in the Reorganization that would
reduce Acquired Fund Shareholders' ownership of Acquiring Fund shares to a
number of shares having the value, as of the Closing Date, of less than fifty
percent (50%) of the value of all of the formerly outstanding Acquired Fund
shares as of the Closing Date. For purposes of this representation, Acquired
Fund shares exchanged for cash or other property, surrendered by dissenters, or
exchanged for cash in lieu fractional Acquired Fund shares will be treated as
outstanding Acquired Fund shares as of the Closing Date. Moreover, Acquired
Fund shares and Acquiring Fund shares held by Acquired Fund Shareholders and
otherwise sold, redeemed or disposed of prior or subsequent to the Closing Date
will be considered in making this representation.
3. Acquiring Fund will acquire at least ninety percent (90%) of the fair
market value of the net assets and at least seventy percent (70%) of the fair
market value of the gross assets held by Acquired Fund immediately prior to the
Closing Date. For purposes of this representation, amounts paid by Acquired
Fund to dissenters, amounts used by Acquired Fund to pay its Reorganization
expenses, amounts paid by Acquired Fund to shareholders who will receive cash or
other property, and all redemptions and distributions (except for regular,
normal dividends declared and paid in order to ensure Acquired Fund's continued
qualification as a regulated investment company within the meaning of
Sections 368(a)(2)(F) and 851(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and redemptions required to be made in order to maintain
its status as
<PAGE>
an open-end investment company under the Investment Company Act of 1940) made by
Acquired Fund as a part of the plan of Reorganization will be considered as
assets held by Acquired Fund immediately prior to the Closing Date.
4. Acquired Fund will distribute the stock it receives in the
Reorganization, and its other properties, in pursuance of the Reorganization.
5. The liabilities of Acquired Fund assumed by Acquiring Fund and the
liabilities to which the transferred assets of Acquired Fund are subject (if
any) were incurred by Acquired Fund in the ordinary course of its business.
6. There is no intercorporate indebtedness existing between Acquired Fund
and Acquiring Fund that was issued, acquired or will be settled at a discount.
7. Acquired Fund is a regulated investment company within the meaning of
Sections 368(a)(2)(F)(i), 851(a), and 851(h) of the Code.
8. The fair market value of the assets of Acquired Fund transferred to
Acquiring Fund will equal or exceed the sum of the liabilities assumed by
Acquired Fund, plus the amount of liabilities, if any, to which the transferred
assets are subject.
9. Acquired Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
10. The legal fees and expenses that Piper Capital Management Incorporated
will pay in connection with the Reorganization, as described in the Registration
Statement on Form N-14 filed with the Securities and Exchange Commission on or
about July 26, 1996, are solely and directly related to the Reorganization, and
do not represent additional consideration being paid for the transfer of the
assets of Acquired Fund.
11. All compensation, fees, expenses, reimbursement arrangements or other
amounts of any kind and nature whatsoever to be paid by Acquired Fund or
Acquiring Fund will be for services to be rendered to it and will be
commensurate with the amounts paid to third parties bargaining at arm's-length
for similar services and arrangements.
Dated: September 16, 1996 PIPER INSTITUTIONAL FUNDS INC.
By /s/ William H. Ellis
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Its President
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EXHIBIT B
CERTIFICATE
THE UNDERSIGNED, Piper Funds Inc.--II, in connection with the transfer
of substantially all of the assets of Institutional Government Adjustable
Portfolio ("Acquired Fund"), a series of Piper Institutional Funds Inc. to
Adjustable Rate Mortgage Securities Fund ("Acquiring Fund"), a series of Piper
Funds Inc.--II, pursuant to an Agreement and Plan of Reorganization dated August
22, 1996 by and between Piper Institutional Funds Inc., on behalf of Acquired
Fund and Piper Funds Inc.--II on behalf of Acquiring Fund (the "Agreement"),
does hereby make the following representations (all defined terms herein having
the meaning assigned to them in the Agreement, unless otherwise specified):
1. The fair market value of the Acquiring Fund Shares received by each
Acquired Fund Shareholder will be approximately equal to the fair market value
of the Acquired Fund Shares surrendered in the exchange.
2. Acquiring Fund will acquire at least ninety percent (90%) of the fair
market value of the net assets and at least seventy percent (70%) of the fair
market value of the gross assets held by Acquired Fund immediately prior to the
Effective Time. For purposes of this representation, amounts paid by Acquired
Fund to dissenters, amounts used by Acquired Fund to pay its Reorganization
expenses, amounts paid by Acquired Fund to shareholders who will receive cash or
other property, and all redemptions and distributions (except for regular,
normal dividends declared and paid in order to ensure Acquired Fund's continued
qualification as a regulated investment company within the meaning of Sections
368(a)(2)(F) and 851(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), and redemptions required to be made in order to maintain its status as
an open-end investment company under the Investment Company Act of 1940) made by
Acquired Fund as a part of the plan of Reorganization will be considered as
assets held by Acquired Fund immediately prior to the Effective Time.
3. Acquiring Fund has no plan or intention to acquire any of its stock
issued in the Reorganization, except to the extent that Acquiring Fund, as an
open-end investment company registered with the Securities and Exchange
Commission, is required under Section 22(e) of the Investment Company Act of
1940 to redeem any of its shares presented to it for redemption.
4. Acquiring Fund has no plan or intention to sell or otherwise dispose
of any of the assets of Acquired Fund to be acquired in the Reorganization,
except for dispositions made in the ordinary course of business or to the extent
necessary to maintain its status as a regulated investment company.
5. Following the Reorganization, Acquiring Fund will continue to historic
business of Acquired Fund or use a significant portion of the historic
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business assets of Acquired fund in a business carried on by Acquiring Fund.
For purposes of this representation, the historic business of Acquired Fund is
that of an investment company which has as its primary investment objective high
current income consistent with low principal volatility, and which seeks to
achieve this objective by investing, under normal circumstances, at least 65% of
its total assets in a portfolio of mortgage-backed securities having adjustable
interest rates.
6. There is no intercorporate indebtedness existing between Acquired Fund
and Acquiring Fund that was issued, acquired or will be settled at a discount.
7. Acquiring Fund is a regulated investment company within the meaning of
Sections 368(a)(2)(F)(i), 851(a), and 851(h) of the Code.
8. The fees and expenses that Piper Capital Management Incorporated will
pay in connection with the Reorganization, as described in the Registration
Statement on Form N-14 filed with the Securities and Exchange Commission on or
about July 26, 1996, are solely and directly related to the Reorganization, and
do not represent additional consideration being paid for the transfer of the
assets of Acquired Fund.
9. All compensation, fees, expenses, reimbursement arrangements or other
amounts of any kind and nature whatsoever to be paid by Acquired Fund or
Acquiring Fund, or any affiliate of either fund, will be for services to be
rendered to it and will be commensurate with the amounts paid to third parties
bargaining at arm's-length for similar services and arrangements.
Dated: September 16, 1996 PIPER FUNDS INC.--II
By /s/ William H. Ellis
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Its President
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EXHIBIT C
CERTIFICATE
THE UNDERSIGNED, Piper Capital Management Incorporated ("Piper
Capital"), in connection with the transfer of substantially all of the assets of
Institutional Adjustable Government Portfolio ("Institutional Fund"), a series
of Piper Institutional Funds Inc., to Adjustable Rate Mortgage Securities Fund,
a series of Piper Funds Inc.--II ("Adjustable Rate Fund"), pursuant to an
Agreement and Plan of Reorganization dated August 22, 1996, by and between Piper
Institutional Funds Inc. and Piper Funds Inc.--II, does hereby make the
following representations (all defined terms herein having the meaning assigned
to them in the Agreement and Plan of Reorganization, unless otherwise
specified):
1. The fees and expenses that Piper Capital will pay in connection with
the Reorganization, as described in the Registration Statement on Form N-14
filed with the Securities and Exchange Commission on or about July 26, 1996, are
solely and directly related to the Reorganization, and do not represent
additional consideration being paid for the transfer of the assets of
Institutional Fund. To the best of the knowledge of Piper Capital, the
arrangement for the payment of fees and expenses is consistent with practice in
the investment company industry.
2. All compensation, fees, expenses, reimbursement arrangements or other
amounts of any kind or nature whatsoever to be paid by Piper Capital or its
affiliates will be for services to be rendered to it or Institutional Fund or
Adjustable Rate Fund and will be commensurate with amounts paid to third parties
bargaining at arm's-length for similar services and arrangements.
Dated: September 16, 1996 PIPER CAPITAL MANAGEMENT
INCORPORATED
By /s/ William H. Ellis
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Its President
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EXHIBIT D
CERTIFICATE
THE UNDERSIGNED, Greer State Bank, in connection with the merger of
Piper Institutional Government Adjustable Portfolio with Adjustable Rate
Mortgage Securities Fund, represents the following:
The undersigned has no plan or intention on this date to sell,
exchange or otherwise dispose of the shares of Adjustable Rate Mortgage
Securities Fund that it receives in the merger. Any sales of shares of Piper
Institutional Government Adjustable Portfolio that the undersigned has carried
out in the period preceding the merger have been undertaken for independent
business reasons unrelated to the merger.
Dated: September 12, 1996 GREER STATE BANK
By /s/ R. Dennis Hennitt
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Its President and CEO
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EXHIBIT E
CERTIFICATE
THE UNDERSIGNED, Midsouth National Bank, in connection with the merger
of Institutional Government Adjustable Portfolio with Adjustable Rate Mortgage
Securities Fund, a series of Piper Funds Inc.--II, represents the following:
The undersigned certifies that it has no intention on this date to
sell, exchange or otherwise dispose of the shares of Adjustable Rate Mortgage
Securities Fund that it receives in the merger.
Dated: September 12, 1996 MIDSOUTH NATIONAL BANK
By /s/ Karen L. Hail
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Its Executive Vice President
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