<PAGE>
As filed with the Securities and Exchange Commission
on March 12, 1997 Registration No.: 2-44752
811-2297
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
-
Pre-Effective Amendment No.
- -
Post-Effective Amendment No.44 X
-
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
-
Amendment No. 44
(Check appropriate box or boxes.)
STRATTON GROWTH FUND, INC.
--------------------------
(Exact Name of Registrant as Specified in Charter)
610 W. Germantown Pike, Suite 300, Plymouth Meeting, PA 19462
--------------------------------------------------------------
(Address of Principal Executive Offices)
(610) 941-0255
--------------
(Registrant's Telephone Number, including Area Code)
James A. Beers, Assistant Secretary/Treasurer
---------------------------------------------
Stratton Growth Fund, Inc.
-------------------------
610 West Germantown Pike, Suite 300, Plymouth Meeting, PA 19462-1050
---------------------------------------------------------------------
(Name and Address of Agent for Service)
With copies to:
Vernon Stanton, Jr., Esq.
Drinker Biddle & Reath
1100 Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
(215) 988-2700
It is proposed that this filing will become effective
(check appropriate box)
immediately upon filing pursuant to paragraph (b)
---
on (date) pursuant to paragraph (b)
---
60 days after filing pursuant to paragraph (a)(1)
---
X on May 15 pursuant to paragraph (a)(1).
---
75 days after filing pursuant to paragraph (a)(2).
---
on (date) pursuant to paragraph (a)(2) of rule 485.
---
If appropriate, check the following box:
this post-effective amendment designates a new effective date
--- for a previously filed post-effective amendment.
The Registrant has previously registered an indefinite number of shares of
common stock of Stratton Growth Fund, Inc. pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. Registrant's Form 24f-2 notice for
fiscal year-ended December 31, 1996 was filed with the Commission on February
28, 1997.
1
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Part A
Item No. Prospectus Caption
- -------- ------------------
<S> <C> <C>
1. Cover Page Cover Page
2. Synopsis Introduction; Fee Table
3. Condensed Financial Information Financial Highlights;
Performance Calculations
4. General Description of Registrant Introduction, Investment
Objectives, Policies,
Restrictions and Risk
Considerations; Description
of Common Stock
5. Management of the Fund Management of the Funds;
Investment Advisor; Service
Providers and Underwriter
5A. Management's Discussion of Fund Inapplicable
Performance
6. Capital Stock and Other Securities How to Buy Fund Shares:
Reinvestment of Income
Dividends and Capital Gains
Distributions; Tax Treatment:
Dividends and Distributions;
Description of Common Stock
7. Purchase of Securities Being Offered Service Providers and
Underwriter; Computation of
Net Asset Value; How to Buy
Fund Shares; Exchange
Privilege; Retirement Plans
8. Redemption or Repurchase How to Redeem Fund Shares
9. Legal Proceedings Inapplicable
</TABLE>
2
<PAGE>
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
<TABLE>
<CAPTION>
Part B Statement of Additional
Item No. Information Caption
- -------- -----------------------
<S> <C>
10. Cover Page Cover Page
11. Table of Contents Table of Contents
12. General Information and History Inapplicable
13. Investment Objective and Policies Investment Restrictions
14. Management of the Registrant Directors and Officers of the
Funds
15. Control Persons and Principal Control Persons and
Holders of Securities Principal Holders of
Securities
16. Investment Advisory and Other Services The Investment Advisor and
Other Service Providers
17. Brokerage Allocation Portfolio Transactions
and Brokerage Commissions
18. Capital Stock and Other Securities Covered in Part A
19. Purchase, Redemption and Pricing of Additional Purchase &
Securities Being Offered Redemption Information
20. Tax Status Additional Information
Concerning Taxes
21. Underwriters The Investment Advisor and
Other Service Providers
22. Calculation of Performance Data Additional Information on
Performance Calculations
23. Financial Statements Financial Statements
</TABLE>
Part C
- ------
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C of this Post-Effective Amendment No. 44 to the
Registration Statement.
3
<PAGE>
THE STRATTON FAMILY of FUNDS
Stratton Monthly Dividend Shares, Inc.
Stratton Growth Fund, Inc.
Stratton Small-Cap Yield Fund
PROSPECTUS
MAY 15, 1997
Plymouth Meeting Executive Campus
610 W. Germantown Pike, Suite 300
Plymouth Meeting, PA 19462-1050
(610) 941-0255
The Stratton Family of Funds is three separate funds (each a "Fund" and
collectively the "Funds"). Each of the Funds has distinct investment objectives
and policies. Information concerning the Funds has been combined into this one
Prospectus to aid investors in understanding the similarities and differences
among the Funds.
Stratton Monthly Dividend Shares, Inc. ("SMDS") is a no-load mutual fund seeking
as its objective a high rate of return from dividend and interest income on its
investments in common stock and securities convertible into common stock.
Stratton Growth Fund, Inc. ("SGF") is a no-load mutual fund seeking as its
primary objective possible growth of capital with current income from interest
and dividends as a secondary objective. The Fund's investments will normally
consist of common stock and securities convertible into common stock.
Stratton Small-Cap Yield Fund ("SSCY") is a separate, diversified investment
portfolio offered by The Stratton Funds, Inc., a no-load open-end series
management investment company. The Fund's investment objective is to achieve
both dividend income and capital appreciation. The Fund seeks to achieve its
objective by investing in equity securities, primarily common stock, and
securities convertible into common stock, of companies with total market
capitalizations at the time of investment of less than $500 million and which
are outside the Standard & Poor's 500 Index (hereinafter referred to as
"small-cap companies").
This Prospectus sets forth concisely the information about the Funds that
prospective investors ought to know before investing. Investors should read this
Prospectus and retain it for future reference.
Additional information about the Funds has been filed with the Securities and
Exchange Commission and is available upon request and without charge by calling
or writing the Funds at the telephone number or address above. The Statement of
Additional Information bears the same date as this Prospectus and is
incorporated by reference into this Prospectus in its entirety. The Statement of
Additional Information, material incorporated by reference into this Prospectus,
and any other information regarding the Funds are maintained electronically with
the U.S. Securities and Exchange Commission at its Internet Web sight
(http://www.sec.gov).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE 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.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
Introduction..................................................................................
Fee Table.....................................................................................
Financial Highlights..........................................................................
Investment Objectives, Policies, Restrictions and Risk Considerations.........................
Management of the Funds.......................................................................
Investment Advisor............................................................................
Computation of Net Asset Value ...............................................................
How to Buy Fund Shares .......................................................................
Investing by Mail...........................................................................
Investing by Wire...........................................................................
Automatic Investment Plan...................................................................
Direct Deposit Program......................................................................
Reinvestment of Income Dividends and Capital Gains Distributions
Additional Information......................................................................
Investment Application........................................................................
How to Redeem Fund Shares.....................................................................
By Written Request..........................................................................
By Automated Clearing House ("ACH").........................................................
Systematic Cash Withdrawal Plan.............................................................
Additional Information......................................................................
Exchange Privilege ...........................................................................
Retirement Plans..............................................................................
Tax Treatment: Dividends and Distributions ...................................................
Performance Calculations .....................................................................
Description of Common Stock ..................................................................
Service Providers and Underwriter.............................................................
Automatic Investment Plan Application.........................................................
</TABLE>
- --------------------------------------------------------------------------------
FOR MORE DETAILED INFORMATION ABOUT THE ITEMS DISCUSSED IN THIS PROSPECTUS, A
COPY OF THE STATEMENT OF ADDITIONAL INFORMATION MAY BE OBTAINED WITHOUT CHARGE
BY WRITING TO THE FUNDS' DISTRIBUTOR, FPS BROKER SERVICES, INC., 3200 HORIZON
DRIVE, P.O. BOX 61503, KING OF PRUSSIA, PA 19406-0903, OR BY TELEPHONING
800-634-5726.
2
<PAGE>
INTRODUCTION
The securities offered by this Prospectus consist of shares of common stock of
three separate Funds. Each Fund has distinct investment objectives and policies.
The Funds are no-load, open-end, diversified mutual funds. The three Funds are
identified herein as follows: Stratton Monthly Dividend Shares, Inc. ("SMDS");
Stratton Growth Fund, Inc. ("SGF"); and Stratton Small-Cap Yield Fund ("SSCY").
As of December 31, 1996, the Funds have changed their various fiscal year ends
to December 31.
Investment Objectives
- ---------------------
SMDS seeks as its objective a high rate of return from dividend and interest
income on its investments in common stock and securities convertible into common
stock. The Fund will seek to achieve this objective through investment of at
least 25% of assets in securities of real estate investment trusts ("REITs") and
of public utility companies engaged in the production, transmission or
distribution of electric, energy, gas, water or telephone services.
SGF seeks as its primary objective possible growth of capital with current
income from interest and dividends as a secondary objective. The Fund's
investments will normally consist of common stock and securities convertible
into common stock.
SSCY seeks to achieve both dividend income and capital appreciation by investing
in equity securities, primarily common stock and securities convertible into
common stock of small-cap companies. The Fund will invest at least 80% of its
assets in small-cap companies.
The value of each Fund's shares fluctuate because the value of the securities in
which each Fund invests fluctuates. Each Fund will earn dividend or interest
income to the extent that it receives dividends or interest from its
investments. An investment in any of the Funds is neither insured nor guaranteed
by the U.S. Government. There can be no assurance that any Fund's investment
objective will be achieved.
How to Buy Fund Shares
- ----------------------
The minimum initial investment for SMDS, SGF and SSCY is $2,000. There is no
minimum initial investment requirement for any retirement plan. Subsequent
investments will be accepted in minimum amounts of $100 or more. The Funds do
not impose any sales load nor bear any fees pursuant to a Rule 12b-1 Plan. The
public offering price for shares of each Fund is the net asset value per share
next determined after receipt and acceptance of a purchase order at the transfer
agent in proper form with accompanying check or bank wire arrangement. See "How
to Buy Fund Shares."
How to Redeem Fund Shares
- -------------------------
Shares of the Funds may be redeemed at the net asset value per share next
determined after receipt by the transfer agent of a redemption request in proper
form. Signature guarantees may be required for certain redemption requests. See
"How to Redeem Fund Shares."
Dividends
- ---------
SMDS intends to pay monthly dividends from its net investment income and
distributions of net capital gains, if any, will be paid annually.
SGF intends to pay semi-annual dividends from its net investment income and
distributions of net capital gains, if any, will be paid annually.
SSCY intends to pay quarterly dividends from its net investment income and
distributions of net capital gains, if any, will be paid annually.
3
<PAGE>
Investment Management, Underwriter and Servicing Agents
- -------------------------------------------------------
Stratton Management Company (the "Investment Advisor"), Plymouth Meeting
Executive Campus, 610 W. Germantown Pike, Suite 300, Plymouth Meeting, PA
19462-1050 is the Investment Advisor for the Funds.
FPS Broker Services, Inc. ("FPBS"), 3200 Horizon Drive, P.O. Box 61503, King of
Prussia, PA 19406-0903 serves as the Funds' Underwriter. FPS Services, Inc.
("FPS"), 3200 Horizon Drive, P.O. Box 61503, King of Prussia, PA 19406-0903
serves as the Funds' Administrator, Accounting/Pricing Agent, and Transfer
Agent.
FEE TABLE
Below is a summary of the Operating Expenses that each Fund incurred during its
most recent fiscal period. A hypothetical example based on the summary is also
shown.
<TABLE>
<CAPTION>
SMDS SGF SSCY
---- --- ----
Annual Fund Operating Expenses:
- -------------------------------
(as a percentage of average net assets)
<S> <C> <C> <C>
Management Fees...................................... 0.63% 0.75% 0.75%/1/
Other Expenses....................................... 0.39% 0.42% 0.84%
----- ----- -----
Total Fund Operating Expenses........................ 1.02% 1.17% 1.59%
<CAPTION>
Example:
<S> <C> <C> <C> <C>
You would pay the following expenses 1 year $ 10 $ 12 $ 16
on a $1,000 investment, assuming: (1) 3 years $ 32 $ 37 $ 50
a 5% annual return; and (2) redemption 5 years $ 56 $ 64 $ 87
at the end of each time period: 10 years $124 $141 $189
</TABLE>
WHILE THE FOREGOING EXAMPLE ASSUMES A 5% ANNUAL RETURN, A FUND'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN MORE OR LESS THAN 5%.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES.
ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN.
The purpose of this table is to assist investors in understanding the various
costs and expenses that investors will bear directly or indirectly. The Funds do
not impose any sales load, redemption or exchange fees, nor do they bear any
fees pursuant to a Rule 12b-1 Plan; however, the Transfer Agent currently
charges investors who request redemptions by wire transfer a fee of $9 for each
such payment. For more complete descriptions of the various costs and expenses,
see "Investment Advisor," "How to Buy Fund Shares," "How to Redeem Fund Shares,"
"Retirement Plans" and "Service Providers and Underwriter " and the financial
statements and related notes which appear in the Funds' Annual Reports to
Shareholders.
/1/ This fee represents the basic management fee of 0.75% payable to SSCY under
the Investment Advisory Agreement. The basic management fee may be
increased or decreased by a performance adjustment. The performance
adjustment is a rolling 24-month comparison to the Frank Russell 2000 Index
("Russell 2000"), see "Investment Advisor" for a further discussion. For
the period ended December 31, 1996 the Investment Advisor received 0.45% of
SSCY's average net assets. Absent such performance adjustment, the
Investment Advisor would have received 0.75% of SSCY's average net
assets.
4
<PAGE>
FINANCIAL HIGHLIGHTS
The following information provides financial highlights for a share of each Fund
outstanding during the periods stated. The information for each period ended
presented below has been audited by Tait, Weller & Baker, certified public
accountants, whose report appears in the Funds' Annual Reports to Shareholders
dated December 31, 1996. This information should be read in conjunction with the
financial statements and accompanying notes appearing in the 1996 Annual Reports
to Shareholders, which are incorporated by reference into the Statement of
Additional Information. Further information about the performance of the Funds
is available in the Annual Reports to Shareholders. Both the Statement of
Additional Information and the Annual Reports to Shareholders may be obtained
from the Funds free of charge by calling 800-634-5726.
The following tables set forth financial data for a share of capital stock
outstanding throughout the periods presented for each Fund.
Stratton Monthly Dividend Shares, Inc.
<TABLE>
<CAPTION>
11 Months Ended Years Ended January 31
---------- -------------------------------------------------
12/31/96 1996 1995 1994 1993
---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year............... $27.40 $24.84 $28.69 $29.91 $27.83
---------- ---------- ----------- ---------- ----------
Income From Investment Operations
- ---------------------------------
Net investment income.......................... 1.63 1.88 1.94 1.87 1.94
Net gains (loss) on securities
(both realized and unrealized)............... 0.16 2.60 (3.87) (1.14) 2.08
---------- ---------- ----------- ---------- ----------
Total from investment operations........... 1.79 4.48 (1.93) 0.73 4.02
---------- ---------- ----------- ---------- ----------
Less Distributions
- ------------------
Dividends (from net investment income)......... (1.63) (1.89) (1.92) (1.94) (1.94)
Distributions in excess
of net Investment Income..................... (0.13) (0.03) 0.00 (0.01) 0.00
Distributions from net realized gains
from security transactions................... 0.00 0.00 0.00 0.00 0.00
Distributions from paid-in capital/3/........... 0.00 0.00 0.00 0.00 0.00
---------- ---------- ----------- ---------- ----------
Total distributions.......................... (1.76) (1.92) (1.92) (1.95) (1.94)
---------- ---------- ----------- ---------- ----------
Net Asset Value, End of Year..................... $27.43 $27.40 $24.84 $28.69 $29.91
========== ========== =========== ========== ==========
Total Return..................................... 7.12% 18.98% -6.57% 2.22% 15.18%
Ratios/Supplemental Data
- ------------------------
Net assets, end of year (in 000's)............... $103,780 $129,267 $134,066 $165,798 $98,227
Ratio of expenses to average net assets.......... 1.02% 0.99% 1.08% 0.99% 1.10%
Ratio of net income to average net assets........ 6.94% 7.42% 7.71% 6.12% 6.74%
Portfolio turnover rate.......................... 69.19% 53.30% 39.50% 19.15% 35.94%
Average commission rate paid..................... $0.0498 N/A N/A N/A N/A
<CAPTION>
Years Ended January 31
--------------------------------------------------------
1992 1991(1) 1990(1) 1989(1) 1988(1)(2)
---------- ---------- --------- ----------------------
Net Asset Value, Beginning of Year............... $23.02 $24.50 $24.43 $25.11 $31.09
---------- ---------- --------- ---------- -----------
Income From Investment Operations
- ---------------------------------
Net investment income.......................... 1.97 2.05 2.09 2.10 2.06
Net gains (loss) on securities
(both realized and unrealized)............... 4.79 (1.33) 0.03 (0.70) (5.33)
---------- ---------- --------- ---------- -----------
Total from investment operations........... 6.76 0.72 2.12 1.40 (3.27)
---------- ---------- --------- ---------- -----------
Less Distributions
- ------------------
Dividends (from net investment income)......... (1.95) (2.20) (2.05) (2.08) (2.06)
Distributions in excess
of net Investment Income..................... 0.00 0.00 0.00 0.00 0.00
Distributions from net realized gains
from security transactions................... 0.00 0.00 0.00 0.00 (0.27)
Distributions from paid-in capital(3)........... 0.00 0.00 0.00 0.00 (0.38)
---------- ---------- --------- ---------- -----------
Total distributions.......................... (1.95) (2.20) (2.05) (2.08) (2.71)
---------- ---------- --------- ---------- -----------
Net Asset Value, End of Year..................... $27.83 $23.02 $24.50 $24.43 $25.11
========== ========== ========= ========== ===========
Total Return..................................... 30.55% 3.30% 8.69% 5.93% -10.80%
Ratios/Supplemental Data
- ------------------------
Net assets, end of year (in 000's)............... $45,566 $31,178 $33,200 $33,845 $36,305
Ratio of expenses to average net assets.......... 1.23% 1.27% 1.25% 1.21% 1.21%
Ratio of net income to average net assets........ 7.63% 8.79% 8.19% 8.54% 7.52%
Portfolio turnover rate.......................... 43.55% 14.00% 39.10% 15.00% 24.44%
Average commission rate paid..................... N/A N/A N/A N/A N/A
</TABLE>
- -----------------
/1/ Not covered by independent accountants' report
/2/ Per share income and expenses and net realized and unrealized gain (loss)
on investments have been computed using the average number of shares
outstanding during the period. These computations had no effect on net
asset value per share.
/3/ Distributions from paid-in capital result from the excess of taxable
capital gains over gains available from book sources.
/4/ Annualized
<PAGE>
Stratton Growth Fund, Inc.
<TABLE>
<CAPTION>
7 Months Ended Years Ended May 31,
-------------- -------------------------------------------------------
12/31/96 1996 1995 1994 1993 1992
------------ ---------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.................. $27.18 $22.35 $20.65 $20.89 $20.55 $19.75
---------- ---------- --------- --------- --------- ---------
Income From Investment Operations
- ---------------------------------
Net investment income........................... 0.312 0.556 0.537 0.510 0.560 0.64
Net gains (loss) on securities
(both realized and unrealized)................ 1.298 5.759 2.978 0.665 1.160 1.32
---------- ---------- --------- --------- --------- ---------
Total from investment operations............. 1.610 6.315 3.515 1.175 1.720 1.96
---------- ---------- --------- --------- --------- ---------
Less Distributions
- ------------------
Dividends (from net investment
income)....................................... (0.580) (0.540) (0.540) (0.510) (0.565) (0.725)
Distributions (from capital gains).............. (1.210) (0.945) (1.275) (0.905) (0.815) (0.435)
---------- ---------- --------- --------- --------- ---------
Total Distributions........................... (1.790) (1.485) (1.815) (1.415) (1.380) (1.160)
---------- ---------- --------- --------- --------- ---------
Net Asset Value, End of Year........................ $27.00 $27.18 $22.35 $20.65 $20.89 $20.55
========== ========== ========= ========= ========= =========
Total Return........................................ 6.40% 29.62% 18.61% 5.92% 8.91% 10.57%
Ratios/Supplemental Data
- ------------------------
Net assets, end of year (in 000's).................. $44,801 $42,880 $31,718 $25,475 $25,315 $25,311
Ratio of expenses to average
net assets........................................ 1.17%/2/ 1.16% 1.31% 1.34% 1.39% 1.35%
Ratio of net investment
income to average net assets...................... 2.08%/2/ 2.28% 2.70% 2.51% 2.76% 3.20%
Portfolio turnover rate............................. 20.32% 15.41% 42.54% 49.81% 35.34% 59.76%
Average commission rate paid........................ $0.0537 N/A N/A N/A N/A N/A
<CAPTION>
Years Ended May 31,
-------------------------------------------------------
1991/1/ 1990/1/ 1989/1/ 1988/1/ 1987/1/
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.................. $19.66 $21.84 $19.48 $22.24 $24.25
--------- --------- --------- --------- ---------
Income From Investment Operations
- ---------------------------------
Net investment income........................... 0.72 0.82 0.55 0.58 0.37
Net gains (loss) on securities
(both realized and unrealized)................ 0.65 0.20 3.83 (1.11) (0.03)
--------- --------- --------- --------- ---------
Total from investment operations............. 1.37 1.02 4.38 (0.53) 0.34
--------- --------- --------- --------- ---------
Less Distributions
- ------------------
Dividends (from net investment
income)....................................... (0.82) (0.71) (0.53) (0.70) (0.28)
Distributions (from capital gains).............. (0.46) (2.49) (1.49) (1.53) (2.07)
--------- --------- --------- --------- ---------
Total Distributions........................... (1.28) (3.20) (2.02) (2.23) (2.35)
--------- --------- --------- --------- ---------
Net Asset Value, End of Year........................ $19.75 $19.66 $21.84 $19.48 $22.24
========= ========= ========= ========= =========
Total Return........................................ 7.58% 4.94% 24.25% (2.17%) 1.85%
Ratios/Supplemental Data
- ------------------------
Net assets, end of year (in 000's).................. $25,111 $23,407 $20,268 $16,859 $19,326
Ratio of expenses to average
net assets........................................ 1.41% 1.38% 1.41% 1.48% 1.50%
Ratio of net investment
income to average net assets...................... 3.94% 4.09% 2.79% 2.80% 1.74%
Portfolio turnover rate............................. 56.78% 54.80% 49.85% 34.42% 22.69%
Average commission rate paid........................ N/A N/A N/A N/A N/A
</TABLE>
- ----------------
/1/ Not covered by independent accountants' report
/2/ Annualized
6
<PAGE>
Stratton Small-Cap Yield Fund
<TABLE>
<CAPTION>
9 Months Year Year For the period
Ended Ended Ended 4/12/93/1/
12/31/96 03/31/96 03/31/95 to 03/31/94
---------------- --------------- --------------- ------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $31.95 $25.88 $25.94 $25.00
---------------- --------------- --------------- ------------------
Income From Investment Operations
---------------------------------
Net investment income........................ 0.53 0.66 0.57 0.43
Net gains (loss) on securities
(both realized and unrealized)............. 3.47 6.07 (0.04) 0.91
---------------- --------------- --------------- ------------------
Total from investment operations......... 4.00 6.73 0.53 1.34
---------------- --------------- --------------- ------------------
Less Distributions
------------------
Dividends (from net investment
income).................................... (0.54) (0.66) (0.59) (0.40)
Distributions (from capital gains)........... (1.83) 0.00 0.00 0.00
---------------- --------------- --------------- ------------------
Total distributions...................... (2.37) (0.66) (0.59) (0.40)
---------------- --------------- --------------- ------------------
Net Asset Value, End of Period................... $33.58 $31.95 $25.88 $25.94
================ =============== =============== ==================
Total Return..................................... 12.84% 26.18% 2.09% 5.51%/2/
Ratios/Supplemental Data
- ------------------------
Net assets, end of period (in 000's)......... $21,691 $19,592 $14,058 $8,257
Ratio of expenses to average
net assets................................. 1.29%/2/ 1.46% 2.12% 2.28%/2/
Ratio of net investment
income to average net assets............... 2.03%/2/ 2.28% 2.36% 1.85%/2/
Portfolio turnover rate...................... 35.86% 33.50% 30.20% 28.60%/2/
Average commission rate paid................. $0.0579 N/A N/A N/A
- ---------------------------
</TABLE>
/1/ Commencement of operations
/2/ Annualized
<PAGE>
INVESTMENT OBJECTIVES, POLICIES, RESTRICTIONS AND
RISK CONSIDERATIONS
The investment objective of SGF is fundamental and may not be changed without a
vote of a majority of the Fund's shares. The investment objectives of SMDS and
SSCY are not fundamental and may be changed by the Board of Directors of the
applicable Fund. Unless otherwise stated in this Prospectus or the Statement of
Additional Information, each Fund's investment policies are not fundamental and
may be changed without shareholder approval. While a non-fundamental policy or
restriction may be changed by the Board of Directors of the applicable Fund
without shareholder approval, the Funds intend to notify shareholders before
making any change in any such policy or restriction. Fundamental policies may
not be changed without shareholder approval. A complete list of each Fund's
fundamental investment restrictions appears in the Statement of Additional
Information.
SMDS
- ----
SMDS' objective is to seek a high rate of return from dividend and interest
income on its investments in common stock and securities convertible into common
stock. Investment decisions will be made on the basis of an analysis of
fundamentals of individual companies and on relevant economic and social
conditions. The Fund will invest at least 80% of its assets in common stock and
securities convertible into common stock. The Fund intends to invest at least
25% of its assets in securities of REITs and of public utility companies engaged
in the production, transmission or distribution of electric, energy, gas, water
or telephone service. This policy of concentration may not be changed without
the approval of the holders of a majority of the Fund's outstanding shares.
SGF
- ---
The primary objective of SGF is to seek possible growth of capital for its
shareholders' investments, with current income from interest and dividends as a
secondary objective. On an overall portfolio basis, the Investment Advisor will
seek appreciation of capital for the Fund by continuously reviewing both
individual securities and relevant economic and social conditions so that in the
view of the Investment Advisor, the Fund's portfolio has the greatest possible
potential for capital growth consistent with reasonable risk. The Fund's
investments will normally consist of common stock and securities convertible
into common stock. The Fund may also invest in REITs. In making its investment
decision, the Investment Advisor examines the securities of domestic companies,
generally those with dividend payment records, with a view to selecting those
securities which it believes will provide a greater opportunity for growth and
return of capital.
Preferred stocks and debt securities which are not convertible into common stock
will normally not be purchased. However, when the Investment Advisor determines
that a temporary defensive position is warranted, it may invest in
non-convertible preferred stocks, debt securities and domestic corporate and
government fixed income obligations without limitation and to the extent such
investments are made, the Fund will not be achieving growth of capital. The
Fund's relative equity and cash (or cash equivalent) positions may also be
changed as the Fund alters its evaluation of trends in general securities price
levels.
The Fund does not intend to obtain short-term trading profits. It is anticipated
that the Fund's annual portfolio turnover rate will generally fall within a 30%
to 70% range; but the rate of portfolio turnover is not a limiting factor when
the Fund's management deems changes appropriate and could be less than 30% or
greater than 70% in any particular year, depending upon market and other
considerations.
The following investment restrictions are deemed fundamental policies:
1. The Fund will not invest more than 5% of the value of its total assets in
the securities of any one issuer, except for securities of the United
States Government or agencies thereof.
2. The Fund will not invest in more than 10% of any class of securities of any
one issuer (except for government obligations) or in more than 10% of the
voting securities of any one issuer.
8
<PAGE>
SSCY
- ----
The investment objective of SSCY is to achieve both dividend income and capital
appreciation. The Fund seeks to achieve its objective by investing in equity
securities of small-cap companies.
On an overall portfolio basis, the Investment Advisor will seek to achieve the
Fund's objective by continuously reviewing both individual securities and
relevant economic and social conditions so that in the view of the Investment
Advisor, the Fund has the greatest possible potential for capital appreciation
consistent with reasonable risk. The Investment Advisor generally selects
companies which pay quarterly dividends at an above-average rate.
Under normal market conditions, it is expected that the Fund will invest at
least 80% of its assets in equity securities, primarily common stock and
securities convertible into common stock of small-cap companies. The Fund may
also invest in other types of securities with equity characteristics such as
REITs, preferred stocks, warrants, units and rights. The Fund may invest in both
exchange-listed and over-the-counter securities. As a matter of fundamental
policy which cannot be changed without the vote of a majority of the Fund's
outstanding shares, the Fund will not invest more than 25% of its total assets
in any one industry.
The Fund will not knowingly invest more than 5% of its total assets in
securities that are illiquid. Securities having legal or contractual
restrictions on resale and no readily available market, and instruments that do
not provide for payment to the Fund within seven days after notice are subject
to this 5% limit. Securities that have legal or contractual restrictions on
resale but have a readily available market are not deemed to be illiquid for the
purposes of this limitation.
Investments in small-cap companies have certain risks associated with them.
First and foremost is their greater earnings and price volatility in comparison
to large companies. Earnings risk is partially due to the undiversified nature
of small company business lines. The Fund attempts to counteract these concerns
about investing in small-cap companies by using strict purchase criteria. One of
these criteria stipulates that these companies must have been sound and going
entities for over three years. In addition, these companies must be established
dividend-paying entities. The dividend requirement helps to reduce share price
volatility of the issues in the Fund and ultimately of the Fund itself.
REITs
- -----
Each Fund may invest in REITs. Equity REITs invest directly in real property
while mortgage REITs invest in mortgages on real property. REITs may be subject
to certain risks associated with the direct ownership of real estate including
declines in the value of real estate, risks related to general and local
economic conditions, overbuilding and increased competition, increases in
property taxes and operating expenses, and variations in rental income.
Generally, increases in interest rates will decrease the value of high yielding
securities and increase the costs of obtaining financing, which could decrease
the value of the portfolio's investments. In addition, equity REITs may be
affected by changes in the value of the underlying property owned by the trusts,
while mortgage REITs may be affected by the quality of credit extended. Equity
and mortgage REITs are dependent upon management skill, are not diversified and
are subject to the risks of financing projects. REITs are also subject to heavy
cash flow dependency, defaults by borrowers, self liquidation and the
possibility of failing to qualify for tax-free pass-through of income under the
Internal Revenue Code and to maintain exemption from the Investment Company Act
of 1940, as amended (the "1940 Act").
REITs pay dividends to their shareholders based upon available funds from
operations. It is quite common for these dividends to exceed the REIT's taxable
earnings and profits resulting in the excess portion of such dividends being
designated as a return of capital. A Fund intends to include the gross dividends
from such REITs in its distributions to shareholders and, accordingly, a portion
of the Funds' distributions may also be designated as a return of capital. For
more information, please see the discussion under "Tax Treatment: Dividends and
Distributions."
9
<PAGE>
Short-Term Securities
- ---------------------
Although each Fund normally seeks to remain fully invested in equity securities,
a Fund may invest temporarily up to 100% of its assets in certain short-term
fixed income securities. Such securities may be used to invest uncommitted cash
balances, for temporary purposes pending investments in other securities, to
maintain liquidity to meet shareholder redemptions or for temporary defensive
measures to protect against the erosion of its capital base. These securities
include, but are not limited to, obligations of the U.S. government, its
agencies and instrumentalities, commercial paper, certificates of deposit,
bankers acceptances and repurchase agreements. When a Fund invests for defensive
purposes, it may affect the attainment of the Fund's investment objective.
MANAGEMENT OF THE FUNDS
The business of each Fund is managed under the direction of each Fund's Board of
Directors. Information about the directors and officers of the Funds is included
in the Statement of Additional Information.
INVESTMENT ADVISOR
Stratton Management Company, with offices at Plymouth Meeting Executive Campus,
610 W. Germantown Pike, Suite 300, Plymouth Meeting, PA 19462-1050, is the
Funds' investment advisor and manager and is registered as an investment advisor
under the Investment Advisors Act of 1940, as amended. The Investment Advisor
provides investment advisory services, consisting of portfolio management, for a
variety of individuals and institutions and had approximately $1.4 billion in
assets under management as of December 31, 1996. By reason of his ownership of
all the Investment Advisor's voting stock, James W. Stratton may be said to be a
"controlling person" of that firm.
Pursuant to Investment Advisory Agreements, Stratton Management Company provides
an investment program in accordance with each respective Fund's investment
policies, limitations and restrictions.
For providing investment advisory services, the Investment Advisor receives: for
SMDS, a fee at the annual rate of 0.63% of daily net assets; and for SGF, a fee
at the annual rate of 0.75% of daily net assets. The Investment Advisor has
voluntarily agreed to waive $15,000 annually of the advisory fees due it under
the Investment Advisory Agreements with SMDS and SGF to offset a significant
portion of the fees that the Funds will incur under the Administration
Agreements. See "Service Providers and Underwriter." During the fiscal periods
ended December 31, 1996, SMDS and SGF paid the Investment Advisor advisory fees
at the effective annual rates of .56% and .42%, of such Fund's respective
average daily net assets.
For providing investment advisory services, for SSCY, the Investment Advisor
receives an investment advisory fee payable monthly at an annual rate of 0.75%
of average daily net assets, subject to a performance adjustment. The
performance adjustment for SSCY is calculated at the end of each month based
upon a rolling 24 month performance period. The performance adjustment is added
to or subtracted from the basic investment advisory fee. The Fund's gross
performance is compared with the performance of the Frank Russell 2000, a widely
recognized unmanaged index of common stock prices, over a rolling 24- month
performance period. The Russell 2000 is composed of the smallest 2000 stocks in
the Frank Russell annual ranking of 3000 common stocks by market capitalization.
The Russell 2000 is a widely recognized common stock index of small to medium
size companies. Total return performance on the Russell 2000 includes dividends
and is reported monthly on a market capitalization-weighted basis. When the Fund
performs better than the Russell 2000, it pays the Investment Advisor an
incentive fee; less favorable performance than the Russell 2000 reduces the
basic fee. Each 1.00% of the difference in performance between the Fund and the
Russell 2000 during the performance period is equal to a 0.10% adjustment to the
basic fee. The maximum annualized performance adjustment rate is +/- 0.50% of
average net assets which would be added to or deducted from the advisory fee if
the Fund outperformed or underperformed the Russell 2000 by 5.00%. The effect of
this performance fee adjustment is that the basic advisory fee may be increased
as high as an annual rate of 1.25% or decreased to as low as an annual rate of
0.25% of the Fund's average daily net asset value. Due to the complexities of
researching and investing in small-cap equity securities, the
10
<PAGE>
advisory and incentive fees (if realized) paid by the Fund are higher than those
paid by most other investment companies. Additionally, the Fund's incentive fee
of plus or minus 0.50% is greater than that of other mutual funds with similar
objectives which pay incentive fees. Based on the foregoing, during the fiscal
period ended December 31, 1996, SSCY paid the Investment Advisor a fee at the
effective annual rate of .45% of the Fund's average daily net assets.
Mr. Stratton is the Chief Executive officer of the Investment Advisor and has
been primarily responsible for the day-to-day investment management of SMDS, SGF
and SSCY since 1980, 1972 and commencement of operations in April of 1993,
respectively.
COMPUTATION OF NET ASSET VALUE
The net asset value per share of each Fund is determined once each business day
as of the close of regular trading hours (currently 4:00 p.m. Eastern time) on
the New York Stock Exchange ("NYSE"). Such determination will be made by
dividing the value of all securities and other assets (including dividends
accrued but not collected) less any liabilities (including accrued expenses), by
the total number of shares outstanding.
Portfolio securities are valued as follows:
1. Securities listed or admitted to trading on any national securities
exchange are valued at their last sale price on the exchange where the
securities are principally traded or, if there has been no sale on that
date, at the mean between the last reported bid and asked prices.
2. Securities traded in the over-the-counter market are valued at the last
sale price, if carried in the National Market Issues section by NASDAQ;
other over-the-counter securities are valued at the mean between the
closing bid and asked prices obtained from a principal market maker.
3. All other securities and assets are valued at their fair value as
determined in good faith by the Board of Directors of the Funds, which
may include the amortized cost method for securities maturing in sixty
days or less and other cash equivalent investments.
Determination of the net asset value may be suspended when the right of
redemption is suspended as provided under "How to Redeem Fund Shares."
HOW TO BUY FUND SHARES
Shares of each Fund are offered on a continuous basis at the net asset value.
The net asset value per share of each Fund, and hence the purchase price of the
shares, will vary with the value of securities held in each Fund's portfolio.
Purchasers of Fund shares pay no "sales load"; the full amount of the purchase
price goes toward the purchase of shares of a Fund. Purchases are made at the
net asset value next determined following receipt of a purchase order by the
Transfer Agent, at the address set forth below, accompanied by payment for the
purchase. The Funds may also from time to time accept wire purchase orders from
broker/dealers and institutions who have been approved previously by a Fund.
Orders for shares of a Fund received prior to the close of regular trading hours
on the NYSE are confirmed at the net asset value determined at the close of
regular trading hours on the NYSE on that day.
Orders received at the address set forth below subsequent to the close of
regular trading hours on the NYSE will be confirmed at the net asset value
determined at the close of regular trading hours on the next day the NYSE is
open.
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<PAGE>
Investing by Mail
- -----------------
An account may be opened and shares of a Fund purchased by completing the
Investment Application (the "Application"), enclosed within this Prospectus and
sending the Application, together with a check for the desired amount, payable
to " Name of Fund " c/o FPS Services, Inc., 3200 Horizon Drive, P.O. Box 61503,
King of Prussia, PA 19406-0903. The minimum amount for the initial purchase of
shares for SMDS, SGF and SSCY is $2,000.
Subsequent purchases may be made in amounts of $100 or more. (Note: There are no
minimum investment amounts applied to retirement plans.) After each purchase you
will receive an account statement for the shares purchased. Once a shareholder's
account has been established, additional purchases may be made by sending a
check made payable to " Name of Fund " c/o FPS Services, Inc., P.O. Box 412797,
Kansas City, MO 64141-2797. Please enclose the stub of your account statement
and include your Fund account number on your check (as well as the attributable
year for retirement plan investments, if applicable).
Please Note: The Fund's will not accept third party checks for the purchase of
shares. Third party checks are those that are made out to someone other than the
fund and are endorsed over to the fund. In order to ensure receipt of good
funds, the Funds reserve the right to delay sending your redemption proceeds up
to 15 days if you recently purchased shares by check. A $20 fee will be charged
to your account for any payment check returned to the custodian.
Investing by Wire
- -----------------
You may also pay for shares by instructing your bank to wire Federal funds to
the Transfer Agent. Federal funds are monies of member banks within the Federal
Reserve System. Your bank must include the full name(s) in which your account is
registered and your Fund account number, and should address its wire as follows:
UNITED MISSOURI BANK KC NA
ABA # 10-10-00695
For: FPS Services, Inc.
Account # 98-7037-071-9
FBO: "NAME OF FUND"
Account of (exact name(s) of account registration)
---------------------------------------
Shareholder Account #
-----------------------------
If you are opening a new account by wire transfer, you must first telephone the
Transfer Agent at 800- 441-6580 to request an account number and furnish the
applicable Fund with your social security or other tax identification number. A
completed Application with signature(s) of registrant(s) must be filed with the
applicable Fund immediately subsequent to the initial wire. Your bank will
generally charge a fee for this wire. The Funds will not be responsible for the
consequences of delays, including delays in the banking or Federal Reserve wire
systems.
Please Note: Your initial Fund account must satisfy the $2,000 minimum balance
requirement in order to participate in the following programs or plans.
Automatic Investment Plan
- -------------------------
Shares of a Fund may be purchased through our "Automatic Investment Plan" (the
"Plan"), (a tear-out application is attached to the back of this Prospectus).
The Plan provides a convenient method by which investors may have monies
deducted directly from their checking, savings or bank money market accounts for
investment in a Fund. The minimum investment pursuant to this Plan is $100 per
month. The account designated will be debited in the specified amount, on the
date indicated, and Fund shares will be purchased. Only an account maintained at
a domestic financial institution which is an Automated Clearing House ("ACH")
member may be so designated. A Fund may alter, modify or terminate this Plan at
any time.
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<PAGE>
Direct Deposit Program
- ----------------------
This program enables a shareholder to purchase additional shares by having
certain payments from the Federal Government ONLY (i.e. federal salary, social
security and certain veterans, military or other payments) automatically
deposited into the shareholder's account in a Fund. The minimum investment is
$100.
To elect this privilege, a shareholder must complete a Direct Deposit Enrollment
Form for each type of payment desired. The form may be obtained by contacting
the Transfer Agent, at the address or telephone number shown below. Death or
legal incapacity will terminate a shareholder's participation in this program. A
shareholder may terminate their participation by notifying, in writing, the
appropriate Federal agency. In addition, the Funds may terminate participation
upon 30 days' notice to the shareholder.
Reinvestment of Income Dividends and Capital Gains Distributions
- ----------------------------------------------------------------
Any shareholder may at any time request and receive automatic reinvestment of
any Funds' income dividends and capital gains distributions, or income dividends
only, or capital gains distributions only, in additional shares of a Fund unless
the Funds' Board of Directors determines otherwise. Each Fund will send the
shareholder an account statement reflecting all such reinvestments. The $100
minimum requirement for subsequent investments does not apply to the
reinvestment of income dividends and/or capital gain distributions.
The election to reinvest may be made on the enclosed Application or by writing
to "Name of Fund", c/o FPS Services, Inc., 3200 Horizon Drive, P.O. Box 61503,
King of Prussia, PA 19406-0903. Any such election will automatically continue
for subsequent dividends, and/or distributions until written revocation is
received by the applicable Fund. If no election is chosen each Fund will
automatically reinvest your dividends and capital gains.
Additional Information
- ----------------------
Shares of a Fund may be purchased or redeemed through certain broker/dealers who
may charge a transaction fee, which would not otherwise be charged if the shares
were purchased directly from a Fund.
Each Fund reserves the right to reject purchases under circumstances or in
amounts considered disadvantageous to the Fund. CERTIFICATES WILL NOT BE ISSUED
UNLESS REQUESTED IN WRITING BY THE REGISTERED SHAREHOLDER(S).
Each Fund is required by Federal tax law to withhold 31% of reportable payments
(which may include dividends, capital gains distributions, and redemptions) paid
to shareholders who have not complied with Internal Revenue Service regulations
regarding Tax Identification Certification. In order to avoid this withholding
requirement, you must certify via signature on your Application, or on a
separate W-9 Form supplied by the Transfer Agent, that your Social Security or
Taxpayer Identification Number is correct (or you are waiting for a number to be
issued to you), and that you are currently not subject to backup withholding, or
you are exempt from backup withholding.
While the Funds provide most shareholder services, certain special services,
such as a request for a historical transcript of an account, may involve an
ADDITIONAL FEE. To avoid having to pay such a fee for these special services, it
is important that you SAVE your last Year-to-Date Confirmation Statement
received each year.
PLEASE REFER ALL QUESTIONS AND CORRESPONDENCE ON NEW AND EXISTING ACCOUNTS (SUCH
AS PURCHASES OR REDEMPTIONS, OR STATEMENTS NOT RECEIVED), DIRECTLY TO THE
TRANSFER AGENT, BY WRITING TO FPS SERVICES, INC., 3200 HORIZON DRIVE, P.O. BOX
61503, KING OF PRUSSIA, PA 19406-0903, OR BY CALLING FPS' CUSTOMER SERVICE
DEPARTMENT AT 800-441-6580. PLEASE REFERENCE YOUR FUND NAME AND ACCOUNT NUMBER.
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<PAGE>
HOW TO REDEEM FUND SHARES
By Written Request
- ------------------
Shareholders may redeem shares of a Fund by mail, by writing directly to the
Transfer Agent, and requesting liquidation of all or any part of their shares.
The redemption request must be signed exactly as the shareholder's name appears
in the registration and must include the Fund name and account number. If shares
are owned by more than one person, the redemption request must be signed by all
owners exactly as their names appear in the registration. Shareholders holding
stock certificates must deliver them along with their signed redemption
requests. To protect your account, the Transfer Agent and the Funds from fraud,
signature guarantees are required for certain redemptions. Signature guarantees
are required for: (1) all redemptions of $10,000 or more; (2) any redemptions if
the proceeds are to be paid to someone other than the person(s) or organization
in whose name the account is registered; (3) any redemptions which request that
the proceeds be wired to a bank; (4) requests to transfer the registration of
shares to another owner; and (5) any redemption if the proceeds are to be sent
to an address other than the address of record. The Transfer Agent requires that
signatures be guaranteed by an "eligible guarantor institution" as defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and savings
associations. Broker-dealers guaranteeing signatures must be a member of a
clearing corporation or maintain net capital of at least $100,000. Credit unions
must be authorized to issue signature guarantees. Signature guarantees will be
accepted from any eligible guarantor institution which participates in a
signature guarantee program. The Transfer Agent cannot accept guarantees from
notaries public. In certain instances, the Funds may require additional
documents, such as certified death certificates or proof of fiduciary or
corporate authority. (NOTE: PLEASE CALL OUR TRANSFER AGENT TO VERIFY REQUIRED
LANGUAGE FOR ALL RETIREMENT PLAN REDEMPTION REQUESTS.) No redemption shall be
made unless a shareholder's Application is first on file. In addition, a Fund
will not accept redemption requests until checks (including certified checks or
cashier's checks) received for the shares purchased have cleared, which can be
as long as 15 days.
Redemption requests mailed to the Investment Advisor must be forwarded to the
Transfer Agent and will not be effected until they are received in good order by
the Transfer Agent. The Transfer Agent cannot accept redemption requests which
specify a particular forward date for redemption.
By Automated Clearing House
- ---------------------------
A shareholder may elect to have redemption proceeds, cash distributions or
systematic cash withdrawal payments transferred to his or her bank, savings and
loan association or credit union that is an on-line member of the ACH system.
There are no fees associated with the use of the ACH service.
Written ACH redemption requests must be received by the Transfer Agent before 4
p.m. Eastern time to receive that day's closing net asset value. ACH redemptions
will be sent on the day following the shareholder's request and funds will be
available two days later.
Redemption proceeds (including systematic cash withdrawals), as well as dividend
and capital gains distributions, may be sent to a shareholder via Federal Funds
wire. However, the Transfer Agent will charge a $9 fee for each Federal Funds
wire transmittal, which will be deducted from the amount of the payment.
Systematic Cash Withdrawal Plan
- -------------------------------
Each Fund offers a Systematic Cash Withdrawal Plan as another option which may
be utilized by an investor who wishes to withdraw funds from his or her account
on a regular basis. To participate in this option, an investor must either own
or purchase shares having a value of $10,000 or more. Automatic payments by
check will be mailed to the investor on either a monthly, quarterly, semi-annual
or annual basis in amounts of $50 or more. All withdrawals are processed on the
25th of the month or, if such day is not a business day, on the next business
day and paid promptly thereafter. Please complete the appropriate section on the
Application, indicating the amount of the distribution and the desired
frequency.
14
<PAGE>
An investor should realize that if withdrawals exceed income dividends and
capital gains distributions, the invested principal will be depleted. Thus,
depending on the size of the withdrawal payments and fluctuations in the value
of the shares, the original investment could be exhausted entirely. An investor
may change or stop the Plan at any time by written notice to the Funds.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS MUST BE AUTOMATICALLY REINVESTED TO
PARTICIPATE IN THIS PLAN. Stock certificates cannot be issued under the
Systematic Cash Withdrawal Plan.
Additional Information
- ----------------------
Due to the relatively high cost of maintaining smaller accounts, the Funds
reserve the right to involuntarily redeem shares in any account for its then
current net asset value (which will be paid to the shareholder within five
business days, or such shorter time period as may be required applicable
Securities and Exchange Commission ("S.E.C.") rules) if at any time the total
investment does not have a value of at least $500. The shareholder will be
notified that the value of his or her account is less than the required minimum
and will be allowed at least 45 days to bring the value of the account up to at
least $500 before the redemption is processed.
The redemption price will be the net asset value of the shares to be redeemed as
determined at the close of regular trading hours on the NYSE after receipt at
the address set forth above of a request for redemption in the form described
above and the certificates (if any) evidencing the shares to be redeemed. No
redemption charge will be made. Payment for shares redeemed is made within five
business days, or such shorter time period as may be required by applicable
S.E.C. rules, after receipt of the certificates (or of the redemption request
where no certificates have been issued) by mailing a check to the shareholder's
address of record.
Please Note: A $9 fee will be charged to your account at the time of redemption
if instructions to wire proceeds are given; there is no fee to mail proceeds.
Also, your redemption proceeds may be delayed up to 15 days if you recently
purchased shares by check in order to confirm clearance of check.
THE FUNDS MAY ALSO FROM TIME TO TIME ACCEPT TELEPHONE REDEMPTION REQUESTS, FROM
BROKER/DEALERS AND INSTITUTIONS WHO HAVE BEEN APPROVED PREVIOUSLY BY THE FUNDS.
Neither the Funds nor any of their service contractors will be liable for any
loss or expense or cost in acting upon any telephone instructions that are
reasonably believed to be genuine. In attempting to confirm that telephone
instructions are genuine, the Funds will use such procedures as are considered
reasonable, including requesting a shareholder to correctly state his or her
Fund account number, the name in which his or her account is registered, his or
her banking institution, bank account number and the name in which his or her
bank account is registered. To the extent that a Fund fails to use reasonable
procedures to verify the genuineness of telephone instructions, it and/or its
service contractors may be liable for any such instructions that prove to be
fraudulent or unauthorized. During times of unusual market conditions it may be
difficult to reach the Funds by telephone. If the Funds cannot be reached by
telephone, shareholders should follow the procedures for redeeming by mail as
set forth above.
The right of redemption may not be suspended or payment upon redemption deferred
for more than five business days, or such time shorter time period as may be
required by applicable S.E.C. rules, except: (1) when trading on the NYSE is
restricted as determined by the S.E.C. or such NYSE is closed for other than
weekends and holidays; (2) when the S.E.C. has by order permitted such
suspension; or (3) when an emergency, as defined by the rules of the S.E.C.,
exists, making disposal of portfolio securities or valuation of net assets of a
Fund not reasonably practicable. In case of a suspension of the determination of
the net asset value, the right of redemption is also suspended and unless a
shareholder withdraws his request for redemption, he or she will receive payment
at the net asset value next determined after termination of the suspension.
As provided in the Funds' Articles of Incorporation, payment for shares redeemed
may be made either in cash or in-kind, or partly in cash and partly in-kind.
However, the Funds have elected, pursuant to Rule 18f-1 under the 1940 Act to
redeem shares solely in cash up to the lesser of $250,000 or one percent of the
net asset value of the Fund, during any 90 day period for any one shareholder.
Payments in excess of this limit will also be made wholly in cash unless the
Board of Directors of such
15
<PAGE>
Fund believes that economic conditions exist which would make such a practice
detrimental to the best interests of the Fund. Any portfolio securities paid or
distributed in-kind will be in readily marketable securities, and will be valued
as described under "Computation of Net Asset Value." Subsequent sale of such
securities would require payment of brokerage commissions by the investor.
The value of a shareholder's shares on redemption may be more or less than the
cost of such shares to the shareholder, depending upon the net asset value of
the Fund's shares at the time of redemption.
EXCHANGE PRIVILEGE
Shares of each Fund may be exchanged for shares of the other Funds, provided
such other shares may legally be sold in the state of the investor's residence.
Each Fund has a distinct investment objective which should be reviewed before
executing any exchange of shares.
The sections regarding each Fund, including those on charges and expenses,
should be read prior to seeking any such exchange. Shares may be exchanged by:
(1) written request; or (2) telephone if a special authorization form has been
completed and is on file with the Transfer Agent in advance. See "How to Redeem
Fund Shares - Additional Information" for a description of the Funds' policy
regarding telephone instructions.
Please Note: Shareholders who have certificated shares in their possession MUST
surrender these shares to the Transfer Agent to be held on account in unissued
form PRIOR to taking advantage of the exchange privilege. When returning
certificates for this purpose only, signature(s) need NOT be guaranteed. There
are no sales charges involved. Shareholders who engage in frequent exchange
transactions may be prohibited from further exchanges or otherwise restricted in
placing future orders. The Funds reserve the right to suspend the telephone
exchange privilege at any time. An exchange for tax purposes constitutes the
sale of one fund and the purchase of another. Consequently, the sale may involve
either a capital gain or loss to the shareholder for federal income tax
purposes.
RETIREMENT PLANS
Each Fund has available four types of tax-deferred retirement plans for its
shareholders: Defined Contribution Plans, for use by both self-employed
individuals and corporations; an Individual Retirement Account, for use by
certain eligible individuals with compensation (including earned income from
self- employment), a Simple Individual Retirement Account, for use by certain
small companies, and a 403(b)(7) Retirement Plan, for use by employees of
schools, hospitals, and certain other tax-exempt organizations or associations.
More detailed information about how to participate in these plans, the FEES
charged by the custodian, and the limits on contributions can be found in the
Statement of Additional Information. TO INVEST IN ANY OF THE TAX-DEFERRED
RETIREMENT PLANS, PLEASE CALL THE FUNDS FOR INFORMATION AND THE REQUIRED
SEPARATE APPLICATION.
TAX TREATMENT: DIVIDENDS AND DISTRIBUTIONS
Tax Treatment
- -------------
During their most recent taxable years, each Fund qualified separately as a
regulated investment company under Subchapter M of the Internal Revenue Code and
each Fund intends to do so qualify in future years, as long as such
qualification is in the best interest of its shareholders.
Under Subchapter M of the Internal Revenue Code, a Fund is not subject to
Federal income tax on such part of its ordinary taxable income or net realized
long-term capital gains that it distributes to shareholders. Distributions paid
by a Fund from net investment income and short-term capital gains (but not
distributions paid from long-term capital gains) will be taxable as ordinary
income to shareholders, whether received in cash or reinvested in additional
shares of such Fund. Such ordinary income distributions will qualify for the
dividends received deduction for corporations to the extent of the total
qualifying dividends from domestic corporations received by a Fund for the year.
Shareholders who are citizens or residents of the United States will be subject
to Federal taxes with respect to long-
16
<PAGE>
term realized capital gains which are distributed to them, whether or not
reinvested in the Funds and regardless of the period of time such shares have
been owned by the shareholders. These distributions do not qualify for the
dividends received deduction. Due to the nature of REIT dividends, a Fund may or
may not realize a return of capital. Consequently, a portion of a Fund's total
distributions might also include return of capital. Shareholders will be advised
after the end of each calendar year as to the Federal income tax consequences of
dividends and distributions of the Funds made each year.
Dividends declared in October, November or December of any year payable to
shareholders of record on a specified date in such months, will be deemed for
Federal tax purposes to have been received by the shareholders and paid by such
Fund on December 31 of such year in the event such dividends are paid during
January of the following year.
Prior to purchasing shares of a Fund, the impact of dividends or capital gains
distributions which are expected to be announced or have been announced, but not
paid, should be carefully considered. Any such dividends or capital gains
distributions paid shortly after a purchase of shares by an investor prior to
the record date will have the effect of reducing the per share net asset value
of his or her shares by the per share amount of the dividends or distributions.
All or a portion of such dividends or distributions, although in effect a return
of capital to the shareholder, is subject to taxes, which may be at ordinary
income tax rates.
A taxable gain or loss may be realized by an investor upon his or her
redemption, transfer or exchange of shares of a Fund, depending upon the cost of
such shares when purchased and their price at the time of redemption, transfer
or exchange. If a shareholder has held Fund shares for six months or less and
received a distribution taxable as capital gains attributable to those shares,
any loss he realizes on a disposition of those shares will be treated as a
capital loss to the extent of the earlier capital gain distribution.
The information above is only a short summary of some of the important Federal
tax considerations generally affecting the Funds and their shareholders. Income
and capital gains distributions may also be subject to state and local taxes.
Investors should consult their tax advisor with respect to their own tax
situation.
Dividends and Distributions
- ---------------------------
The shareholders of a Fund are entitled to dividends and distributions arising
from the net investment income and net realized gains, if any, earned on
investments held by the Fund involved, when declared by the Board of Directors
of such Fund. SMDS declares and pays dividends from net investment income on a
monthly basis. SGF declares and pays dividends from net investment income on a
semi-annual basis. SSCY declares and pays dividends from net investment income
quarterly. Each Fund will make distributions from net realized gains, if any,
once a year, but may make distributions on a more frequent basis to comply with
the distribution requirements of Subchapter M of the Internal Revenue Code. Any
distribution paid necessarily reduces a Fund's net asset value per share by the
amount of the distribution. Distributions may be reinvested in additional shares
of such Fund, see "Reinvestment of Income Dividends and Capital Gains
Distributions."
PERFORMANCE CALCULATIONS
From time to time, performance information such as total return for the Funds
may be quoted in advertisements or in communications to shareholders. Each
Fund's total return may be calculated on an average annual total return basis,
and may also be calculated on an aggregate total return basis, for various
periods. Average annual total return reflects the average annual percentage
change in value of an investment in a Fund over the measuring period. Aggregate
total return reflects the total percentage change in value over the measuring
period. Both methods of calculating total return assume that dividends and
capital gains distributions made by a Fund during the period are reinvested in
such Fund's shares.
17
<PAGE>
The total return of each Fund may be compared to that of other mutual funds with
similar investment objectives and to bond and other relevant indices or to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
total return of a Fund's shares may be compared to data prepared by Lipper
Analytical Services, Inc., National Association of Real Estate Investment Trusts
and to indices prepared by Dow Jones & Co., Inc. and Standard & Poor's Ratings
Group.
Performance quotations of each Fund represent such Fund's past performance, and
should not be considered as representative of future results. The investment
return and principal value of an investment in a Fund will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their original
cost. Any fees charged by broker-dealers, banks or other financial institutions
directly to their customer accounts in connection with investments in shares of
a Fund will not be included in the Fund's calculations of total return. Further
information about the performance of each Fund is included in the Fund's most
recent Annual Report which may be obtained without charge by contacting the Fund
at (800) 634-5726.
DESCRIPTION OF COMMON STOCK
The Funds are each organized as separate Maryland corporations. SMDS was
organized on March 4, 1985, as successor to a Delaware corporation organized on
November 10, 1971; SGF was organized on June 21, 1985, as successor to a
Delaware corporation organized on June 5, 1972; and SSCY was organized on
January 5, 1993. SMDS' authorized capital is 10,000,000 shares of common stock,
par value $1.00 per share. SGF's authorized capital is 10,000,000 shares of
common stock, par value $0.10 per share. SSCY is a series of The Stratton Funds,
Inc. The Stratton Funds, Inc. is authorized to issue 1,000,000,000 shares of
common stock, par value $0.001 per share, and to classify and reclassify any
authorized and unissued shares into one or more series or classes. At present,
the Board of Directors of The Stratton Funds, Inc. has authorized the issuance
of 200,000,000 shares of Class A common stock representing interests in SSCY.
There are no conversion or preemptive rights in connection with any shares of
the Funds, nor are there cumulative voting rights. Shares of each Fund are
freely transferable. Each share of a particular Fund has equal voting, dividend
and distribution, and liquidation rights with other shares of such Fund. When
issued for payment as described in this Prospectus, a Fund's shares will be
fully paid and nonassessable. Fractional shares of a Fund have proportionately
the same rights as provided for full shares of the particular Fund.
Each Fund does not presently intend to hold annual meetings of shareholders
except as required by the 1940 Act or other applicable law. Each Fund is a
separate legal entity and holders vote separately as shareholders of each Fund.
Under certain circumstances, shareholders of a Fund have the right to call a
shareholders meeting of that Fund to consider the removal of one or more
directors.
Investors should be aware that by combining the Prospectus of each Fund into
this one document, there is the possibility that one Fund may become liable for
any misstatements in the Prospectus about another Fund. To the extent that a
Fund incurs such liability, a shareholders investment in such Fund could be
adversely affected.
SERVICE PROVIDERS AND UNDERWRITER
Pursuant to arrangements between the Funds, The Bank of New York and FPS, The
Bank of New York serves as custodian of all securities and cash owned by each
Fund. The Bank of New York performs no managerial or policy-making functions for
the Funds. Pursuant to agreements between The Bank of New York and FPS, FPS
performs certain administrative and record keeping services. The Bank of New
York reallows a portion of its custody fee to FPS for providing such services.
18
<PAGE>
FPS also serves as the Transfer Agent, Administrator and Fund Accounting/Pricing
Agent. FPS is a wholly-owned subsidiary of FinDaTex, Inc. Certain directors and
officers of Stratton Management Company, the Investment Advisor to the Funds,
and certain directors and officers of each Fund are controlling shareholders of
FinDaTex, Inc.
Administration services include all administrative services except those
relating to the investment portfolios of the Funds, the distribution of the
Funds and the maintenance of the Funds' financial records. For these
administrative services, the Funds pay a flat fee of $10,000 for SSCY and
$30,000 each for SMDS and SGF.
FPBS acts as underwriter to each Fund pursuant to separate underwriting
agreements. FPBS was paid $3,000 from each Fund for underwriting services in
connection with the registration of the Fund's shares under state securities
laws. FPBS is a wholly-owned subsidiary of FPS. FPS and FPBS are affiliates of
the Investment Advisor inasmuch as FPBS, FPS and the Investment Advisor are
under common control.
19
<PAGE>
PROSPECTUS
MAY 15, 1997
Directors
LYNNE M. CANNON
JOHN J. LOMBARD, JR.
HENRY A. RENTSCHLER
MERRITT N. RHOAD, JR.
ALEXANDER F. SMITH
RICHARD W. STEVENS
JAMES W. STRATTON
Officers
JAMES W. STRATTON
Chairman
GERARD E. HEFFERNAN
President of SMDS
Vice President of SGF & SSCY
JOHN A. AFFLECK
President of SGF
Vice President of SMDS & SSCY
FRANK H. REICHEL, III
President of SSCY
Vice President of SMDS & SGF
JOANNE E. KUZMA
Vice President of SMDS, SGF & SSCY
PATRICIA L. SLOAN
Secretary and Treasurer
JAMES A. BEERS
CAROL L. ROYCE
Assistant Secretary
Assistant Treasurer
Investment Advisor
STRATTON MANAGEMENT COMPANY
Plymouth Meeting Executive Campus
610 W. Germantown Pike, Suite 300
Plymouth Meeting, PA 19462-1050
Telephone: 610-941-0255
Transfer Agent and Dividend Paying Agent
FPS SERVICES, INC.
3200 Horizon Drive, P.O. Box 61503
King of Prussia PA 19406-0903
Telephones: 610-239-4600 o 800-441-6580
Custodian Bank
THE BANK OF NEW YORK
48 Wall Street New York, NY 10286
Independent Accountants
TAIT, WELLER & BAKER
2 Penn Center Plaza, Suite 700
Philadelphia, PA 19102-1707
Legal Counsel
DRINKER BIDDLE & REATH
1100 Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
20
<PAGE>
THE STRATTON FAMILY of FUNDS
Stratton Monthly Dividend Shares, Inc.
Stratton Growth Fund, Inc.
Stratton Small-Cap Yield Fund
STATEMENT OF ADDITIONAL INFORMATION
May 15, 1997
This Statement of Additional Information provides supplementary information
pertaining to shares of common stock in three separate mutual funds: Stratton
Monthly Dividend Shares, Inc. ("SMDS"); Stratton Growth Fund, Inc. ("SGF"); and
Stratton Small-Cap Yield Fund ("SSCY") of The Stratton Funds, Inc. (each a
"Fund" and collectively the "Funds").
This Statement of Additional Information is not a Prospectus but should be read
in conjunction with the current Prospectus dated May 15, 1997, and is
incorporated by reference in its entirety into the Prospectus. A copy of the
Prospectus for the Funds may be obtained by contacting the Funds' Distributor,
FPS Broker Services, Inc., 3200 Horizon Drive, P.O. Box 61503, King of Prussia,
PA 19406-0903, or by telephoning (800) 634-5726.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Statement of Additional Information............................................
Investment Restrictions........................................................
Directors and Officers of the Funds............................................
Compensation Table.............................................................
Control Persons and Principal Holders of Securities............................
The Investment Advisor and Other Service Providers.............................
The Investment Advisor................................................
Service Providers and Underwriter.....................................
Portfolio Transactions and Brokerage Commissions...............................
Retirement Plans...............................................................
Additional Purchase and Redemption Information.................................
Additional Information Concerning Taxes........................................
Additional Information on Performance Calculations.............................
Financial Statements...........................................................
</TABLE>
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information should be read in conjunction with the
Prospectus of the Funds having the same date as this Statement of Additional
Information. Much of the information contained in this Statement of Additional
Information expands upon subjects discussed in the Prospectus. No investment in
shares of the Funds should be made without first reading the Prospectus of the
Funds.
INVESTMENT RESTRICTIONS
A list of the Funds' investment objectives and policies, can be found under "THE
FUNDS' INVESTMENT OBJECTIVES, POLICIES, RESTRICTIONS AND RISK CONSIDERATIONS" in
the Funds' Prospectus.
The following investment restrictions are deemed fundamental policies and may be
changed with respect to a Fund only by the approval of the holders of a
"majority" of such Fund's outstanding shares. The term "majority" of a Fund's
outstanding shares means the holders of the lesser of: (1) 67% of such Fund's
shares present at a meeting if the holders of more than 50% of the outstanding
shares are present in person or by proxy; or (2) more than 50% of such Fund's
outstanding shares.
SMDS WILL NOT:
1. Borrow money, except from banks for temporary or emergency purposes in
an amount not exceeding 5% of the value of its total assets; or
mortgage, pledge or hypothecate its assets to secure any borrowing
except to secure temporary or emergency borrowing and then only in an
amount not exceeding 15% of the value of its total assets.
2. Invest more than 5% of the value of its total assets in securities of
issuers which, with their predecessors, have not had at least three
years of continuous operation.
3. Issue any senior securities (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), except in so far as investment
restriction 1 may be deemed to be an issuance of a senior security.
Page 2
<PAGE>
4. Act as an underwriter or purchase securities which the Fund may not be
free to sell to the public without registration of the securities under
the Securities Act of 1933.
5. Purchase or sell real estate, commodities, or commodity contracts.
6. Invest less than 75% of the value of its total assets in securities
limited in respect to any one issuer to an amount not exceeding 5% of
the value of its total assets, Government securities (as defined in the
1940 Act) cash and cash items. (There is no similar restriction as to
the investment of the balance of the Fund's total assets).
7. Purchase or own 5% or more of the outstanding voting securities of any
electric or gas utility company (as defined in the Public Utility
Holding Company Act of 1935), or purchase or own 10% or more of the
outstanding voting securities of any other issuer.
8. Purchase the securities of an issuer, if, to the Fund's knowledge, one
or more Officers or Directors of the Fund or of its Investment Advisor
individually own beneficially more than 0.5%, and those owning more
than 0.5% together own beneficially more than 5%, of the outstanding
securities of such issuer.
9. Make loans to other persons, except that the purchase of a portion of
an issue of publicly distributed debt securities (whether or not upon
original issuance) shall not be considered the making of a loan.
10. Purchase securities on margin, except that it may obtain such short-term
credits as may be necessary for the clearance of purchases or sales of
securities.
11. Participate on a joint or a joint-and-several basis in any securities
trading account.
12. Invest in puts, calls or combinations thereof or make short sales.
13. Purchase the securities of other investment companies
14. Purchase securities which do not have readily available market quotations.
Real estate investment trusts ("REITs") are not considered investment companies,
and therefore are not subject to the restriction in limitation 13 above. The
restriction in limitation 5 on the purchase or sale of real estate does not
include investments by the Fund in securities secured by real estate or
interests therein or issued by companies or investment trusts which invest in
real estate or interests therein.
The following investment restrictions can be changed only by the Board of
Directors of SMDS:
1. The Fund will not invest for the purpose of exercising control or
management.
2. The Fund will not invest in warrants, except when acquired as a unit with
other securities.
Page 3
<PAGE>
SGF WILL NOT:
1. Invest more than 5% of the value of its total assets in the securities
of any one issuer, except for securities of the United States
Government or agencies thereof.
2. Invest in more than 10% of any class of securities of any one issuer
(except for government obligations) or in more than 10% of the voting
securities of any one issuer.
3. Invest more than 5% of the value of its total assets in securities of
companies which (including operations of their predecessors and of
subsidiaries if the company is a holding company) have not had a record
of at least three years of continuous operations and in equity
securities which are not readily marketable (that is, with a limited
trading market).
4. Borrow money, except from banks for temporary or emergency purposes
(but not for investment purposes), provided that such borrowings shall
not exceed 5% of its total assets (at the lower of cost or market
value).
5. Underwrite the securities of other issuers or invest in securities
under circumstances where, if sold, the Fund might be deemed to be an
underwriter under the Securities Act of 1933.
6. Pledge, mortgage or hypothecate its assets.
7. Invest for purposes of exercising management or control.
8. Invest in securities of other investment companies or in options, puts,
calls, straddles, spreads or similar devices, or engage in arbitrage
transactions or short sales.
9. Purchase securities on margin, but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities.
10. Make loans to other persons except that this restriction shall not
apply to government obligations, commercial paper or notes or other
evidences of indebtedness which are publicly distributed.
11. Purchase or sell real estate or interests in real estate. This will not
prevent the Fund from investing in publicly-held real estate investment
trusts or marketable securities which may represent indirect interests
in real estate.
12. Purchase or sell commodities or commodity contracts or invest in interests
in oil, gas or other mineral exploration or development programs.
13. Invest more than 2% of the value of its total assets in warrants. This
restriction does not apply to warrants initially attached to securities
purchased by the Fund. This restriction may be changed or eliminated at
any time by the Board of Directors of the Fund without action by the
Fund's shareholders.
14. Purchase or hold securities of any issuer, if, at the time of purchase
or thereafter, any officer or director of the Fund or its Investment
Advisor owns beneficially more than 1/2 of 1%, and such officers and
directors holding more than 1/2 of 1% together own beneficially more
than 5% of the issuer's securities.
Page 4
<PAGE>
SSCY WILL NOT:
1. Issue any senior securities (as defined in the Investment Company Act
of 1940); or borrow money, except from banks for temporary or emergency
purposes in an amount not exceeding 5% of the value of its total
assets; or mortgage, pledge or hypothecate its assets.
2. Act as an underwriter of securities, except that, in connection with
the disposition of a security, the Fund may be deemed to be an
"Underwriter" as that term is defined in the Securities Act of 1933.
3. Purchase or sell real estate, commodities, or commodity contracts.
4. As to 75% of the total assets of the Fund, purchase the securities of
any one issuer, other than securities issued by the U.S. government,
its agencies or its instrumentalities, if immediately after such
purchase more than 5% of the total assets of the Fund would be invested
in securities of such issuer.
5. Purchase or own 10% or more of the outstanding voting securities of any
one issuer.
6. Purchase the securities of an issuer, if, to the Fund's knowledge, one
or more Officers or Directors of the Fund or of its Investment Advisor
individually own beneficially more than 0.5%, and those owning more
than 0.5% together own beneficially more than 5%, of the outstanding
securities of such issuer.
7. Make loans to other persons, except that the purchase of a portion of
an issue of publicly distributed debt securities (whether or not upon
original issuance) shall not be considered the making of a loan, nor
shall the Fund be prohibited from entering into repurchase agreements
with banks or broker/dealers.
8. Purchase securities on margin, except that it may obtain such short-term
credits as may be necessary for the clearance of purchases or sales of
securities.
9. Purchase the securities of issuers conducting their principal business
activities in the same industry other than obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities
if, immediately after such purchase, the value of the Fund's
investments in such industry would exceed 25% of the value of the total
assets of the Fund.
10. Invest in puts, calls, straddles or combinations thereof or make short
sales.
11. Purchase the securities of other investment companies, except if they
are acquired pursuant to a merger, consolidation, acquisition, plan of
reorganization or a Securities and Exchange Commission approved offer
of exchange.
Page 5
<PAGE>
12. Invest for the purpose of exercising control over, or management of, the
issuer.
Real estate investment trusts ("REITs") are not considered investment companies,
and therefore are not subject to the restriction in limitation 11 above. The
restriction in limitation 3 on the purchase or sale of real estate does not
include investments by the Fund in securities secured by real estate or
interests therein or issued by companies or investment trusts which invest in
real estate or interests therein.
* * *
The percentage limitations on investments are applied at the time an investment
is made. An actual percentage in excess of a stated percentage limitation does
not violate the limitation unless such excess exists immediately after an
investment is made and results from the investment. In other words, appreciation
or depreciation of a Fund's investments will not cause a violation of the
limitations. In addition, the limitations will not be violated if a Fund
receives securities by reason of a merger or other form of reorganization.
Page 6
<PAGE>
DIRECTORS AND OFFICERS OF THE FUNDS
The directors and executive officers of the Funds, their position with the
Funds, their addresses, affiliations, if any, with the Investment Advisor, and
principal occupations during the past five years are set forth below. Each of
the directors named below is a director for each of the Funds and each of the
officers named below holds the same position, unless otherwise noted, with each
of the Funds.
<TABLE>
<CAPTION>
Name and Address Age Position with Principal Occupation during last 5 years
Registrants
<S> <C> <C> <C>
James W. Stratton/1,3/ 60 Director/ Mr. Stratton is the Chairman of the Board and Chief
610 W. Germantown Pike Chairman Executive Officer of the Investment Advisor, Stratton
Suite 300 Management Company. He is a Director of ALCO Standard
Plymouth Meeting, PA 19462 (diversified distribution and manufacturing company),
Amerigas Propane Ltd. (energy), FinDaTex, Inc. (financial
services), Teleflex, Inc. (aerospace controls and medical
products) and UGI Corp., Inc. (utility-natural gas).
Lynne M. Cannon/2/ 41 Director Ms. Cannon is a Senior Vice President of Relationship
3200 Horizon Drive Management of FPS Services, Inc. and a Director of FPS
King of Prussia, PA 19406 Broker Services, Inc. She was formerly employed as Vice
President of Mutual Funds of Independence Capital
Management, Inc. (investment advisor). Prior to
Independence Capital, she was Vice President of AMA
Investment Advisors, Inc. (investment advisor &
broker/dealer).
John J. Lombard, Jr. 62 Director Mr. Lombard is a partner in the law firm of Morgan, Lewis
2000 One Logan Sq. & Bockius LLP.
Philadelphia, PA 19103
Henry A. Rentschler 68 Director Mr. Rentschler is a private investor. He was formerly the
P.O. Box 962 President of Baldwin-Hamilton Company, a division of Joy
Paoli, PA 19301 Environmental Equipment Co. (manufacturer of renewal parts for
Baldwin locomotives and diesel engines) and was also formerly a
Director of the Society for Industrial Archeology (which promotes the
study and preservation of the physical survivals of our technological
and industrial past).
Merritt N. Rhoad, Jr./3/ 67 Director Mr. Rhoad is a private investor. He was formerly a senior
640 Bridle Road systems engineer with International Business Machines
Custis Woods Corporation.
Glenside, PA 19038
Alexander F. Smith 68 Director Mr. Smith is a private investor. He was formerly the
Cricket Springs Chairman and Director of Gilbert Associates, Inc.
Geigertown , PA 19523 (engineering/consulting services).
Richard W. Stevens 63 Director Mr. Stevens is an attorney in private practice. He was
One Jenkintown Station formerly a partner in the law firm of Clark, Ladner,
115 W. Avenue, Suite 108 Fortenbaugh and Young.
Jenkintown, PA 19046
Gerard E. Heffernan/3/ 59 Officer Mr. Heffernan is a Senior Vice President and Director of the
610 W. Germantown Pike Investment Advisor, Stratton Management Company. He is
Suite 300 President of Stratton Monthly Dividend Shares, Inc., Vice
Plymouth Meeting, PA 19462 President of Stratton Growth Fund, Inc. and The Stratton
Funds, Inc. He is Secretary of FinDaTex, Inc.
John A. Affleck/3/ 50 Officer Mr. Affleck is President and Director of the Investment
610 W. Germantown Pike Advisor, Stratton Management Company. He is President
Suite 300 of Stratton Growth Fund, Inc., Vice President of Stratton
Plymouth Meeting, PA 19462 Monthly Dividend Shares, Inc. and The Stratton Funds, Inc.
Joanne E. Kuzma 42 Officer Mrs. Kuzma is the Director of Trading and a Managing
610 W. Germantown Pike Partner of the Investment Advisor, Stratton Management
Suite 300 Company. She is Vice President of Compliance for Stratton
Plymouth Meeting, PA 19462 Growth Fund, Inc., Stratton Monthly Dividend Shares, Inc.
and The Stratton Funds, Inc.
</TABLE>
Page 7
<PAGE>
<TABLE>
<S> <C> <C> <C>
Frank H. Reichel, III 32 Officer Mr. Reichel is a Vice President, a Director and the Director
610 W. Germantown Pike of Research of the Investment Advisor, Stratton
Suite 300 Management Company. He is President of The Stratton
Plymouth Meeting, PA 19462 Funds, Inc., Vice President of Stratton Growth Fund, Inc.
and Stratton Monthly Dividend Shares, Inc.
Patricia L. Sloan 43 Secretary, Ms. Sloan is an employee of the Investment Advisor,
610 W. Germantown Pike Treasurer Stratton Management Company.
Suite 300
Plymouth Meeting, PA 19462
James A. Beers 33 Assistant Mr. Beers is a Vice President of the Investment Advisor,
610 W. Germantown Pike Secretary/ Stratton Management Company; prior thereto, Account
Suite 300 Treasurer Manager of Client Services at FPS Services, Inc. Mr. Beers
Plymouth Meeting PA 19462 is related to Mr. Stratton by marriage.
Carol L. Royce 39 Assistant Mrs. Royce is an employee of the Investment Advisor,
610 W. Germantown Pike Secretary/ Stratton Management Company.
Suite 300 Treasurer
Plymouth Meeting PA 19462
</TABLE>
/1/ As defined in the 1940 Act, Mr. Stratton is an "interested person" of the
Funds by reason of his positions with the
Investment Advisor and his ownership of FPS Services, Inc. ("FPS") and
it's subsidiary FPS Broker Services, Inc. ("FPBS").
/2/ Ms. Cannon is an "interested person" of the Funds by reason of her
employment with FPS and FPBS.
/3/ Mr. Stratton, Rhoad, Jr., Heffernan and Affleck are shareholders of
FinDaTex, Inc.
COMPENSATION TABLE
The officers and directors of the Funds who are also officers or employees of
the Investment Advisor or FPS receive no direct compensation from the Fund for
services to them. The directors of the Funds serve in the same capacity for each
Fund and meet concurrently four times a year. In the aggregate, each director
currently receives $750 for each meeting attended, and an annual retainer of
$4,000. These fees are divided on a percentage basis between each Fund based on
their relative net assets as of the meeting date. There are no separate audit,
compensation or nominating committees of the Board of Directors.
Set forth are the total fees which were paid to each of the directors who are
not "interested persons" from the start of each Fund's fiscal period until
December 31, 1996:
<TABLE>
<CAPTION>
Total Compensation
Name of Aggregate Compensation From Fund and Fund
Director from Fund Complex /(1)/ Paid to Directors
- --------- ---------------------- -------------------------------
<S> <C> <C>
James W. Stratton
SMDS $0 $0
SGF $0
SSCY $0
Lynne M. Cannon
SMDS $0 $0
SGF $0
SSCY $0
</TABLE>
Page 8
<PAGE>
<TABLE>
<S> <C> <C>
John J. Lombard, Jr.
SMDS $4,885.68 $6,848.23
SGF $1,203.86
SSCY $ 758.69
Rose J. Randall/(2)/
SMDS $2,995.49 $3,748.23
SGF $ 387.00
SSCY $ 365.74
Henry A. Rentschler
SMDS $4,885.68 $6,848.23
SGF $1,203.86
SSCY $ 758.69
Merritt N. Rhoad, Jr.
SMDS $4,885.68 $6,848.23
SGF $1,203.86
SSCY $ 758.69
Alexander F. Smith
SMDS $4,885.68 $6,848.23
SGF $1,203.86
SSCY $ 758.69
Richard W. Stevens
SMDS $4,885.68 $6,848.23
SGF $1,203.86
SSCY $ 758.69
</TABLE>
/(1)/ The "Fund Complex" consists of SMDS, SGF and The Stratton Funds, Inc.
/(2)/ Ms. Randall resigned from all of the Boards of Directors on June 25,
1996
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 28, 1997, beneficial ownership in the Funds by the directors and
officers as a group was as follows:
<TABLE>
<CAPTION>
Fund Shares Percentage
- ---- ------ ----------
<S> <C> <C>
1. SMDS $115,834 3.19%
2. SGF $557,969 33.97%
3. SSCY $ 92,003 14.30%
</TABLE>
Page 9
<PAGE>
As of February 28, 1997, the following shareholders owned of record or to the
best of knowledge beneficially more than 5% of the outstanding shares of the
respective Fund.
<TABLE>
<CAPTION>
Shares Percent
Name Address Owned Owned
---- ------- ----- -----
<S> <C> <C> <C> <C>
1. SMDS Charles Schwab 101 Montgomery St. 422,848 11.64%
& Co., Inc. San Francisco, CA
2. SGF James Stratton 610 W. Germantown 117,275 7.14%
Pike, Plymouth Meeting
Greenco P.O. Box 2961 110,058 6.70%
Harrisburg, PA
Sandmeyer Steel 1 Sandmeyer Lane 106,136 6.46%
Company Philadelphia, PA
3. SSCY Boston & Co. P.O. Box 3198 344,674 53.64%
Pittsburgh, PA
Stratton Mgmt. Co. 610 W. Germantown 47,407 7.38%
Profit Sharing Plan Pike, Plymouth Meeting
</TABLE>
THE INVESTMENT ADVISOR AND OTHER SERVICE PROVIDERS
The Investment Advisor
The Investment Advisory Agreements (the "Agreements") require the Investment
Advisor to maintain a continuous review of each Fund's portfolio of investments,
and to manage the investment and reinvestment of each Fund's assets. The
Agreements provide that the Investment Advisor is not required to give the Funds
preferential treatment as compared with the treatment given to any other
customer or investment company. In addition, the Investment Advisor furnishes to
the Funds office space and facilities necessary in connection with the operation
of the Funds. The Funds pay, or arrange for others to pay, all other expenses in
connection with their operations.
The Funds pay the following expenses: (1) the fees and expenses of the Funds'
disinterested directors; (2) interest expenses; (3) taxes; (4) brokerage
commissions and other expenses incurred in acquiring or disposing of portfolio
securities; (5) the expenses of registering shares for sale with the Securities
and Exchange Commission and with various state securities commissions; (6)
accounting and legal costs; (7) insurance premiums; (8) fees and expenses of the
Funds' custodian, administrator, accounting services agent and transfer agent
and any related services; (9) expenses of obtaining quotations of the Funds'
portfolio securities and of pricing the Funds' shares; (10) expenses of
maintaining the Funds' legal existence and of shareholders' meetings; (11)
expenses of preparation and distribution to existing shareholders of reports,
proxies and prospectuses; and (12) fees and expenses of membership in industry
organizations.
Page 10
<PAGE>
1. SMDS - The investment advisory fee payable under the Agreement is
payable monthly, at an annual rate of 5/8 of 1% of the Fund's daily net
assets. During the fiscal years ended January 31, 1995 and 1996, the
fees paid to the Investment Advisor were $829,796 and $794,629,
respectively. For the period February 1, 1996 through December 31,
1996, the fees paid to the Investment Advisor were $606,818.
2. SGF - The investment advisory fee payable under the Agreement is
payable monthly, at an annual rate of 3/4 of 1% of the daily net asset
value of the Fund. During the fiscal years ended May 31, 1995 and 1996,
the fees paid to the Investment Advisor were $189,594 and $266,741,
respectively. During the period from June 1, 1996 through December 31,
1996, the fees paid to the Investment Advisor were $177,939.
3. SSCY - The Investment Advisor receives from the Fund a monthly fee at
an annual rate of 0.75% of the Fund's average daily net assets subject
to a performance adjustment and is responsible for paying its expenses.
During the periods ended March 31, 1995 and 1996 the Fund paid the
Investment Advisor $76,075 and $126,638, respectively in fees. For the
period from April 1, 1996 through December 31, 1996, the fees paid to
the Investment Advisor were $91,179.
The performance adjustment for SSCY is calculated at the end of each
month based upon a rolling 24 month performance period. The performance
adjustment is added to or subtracted from the basic investment advisory
fee. The Fund's gross performance is compared with the performance of
the Frank Russell 2000, a widely recognized unmanaged index of common
stock prices, over a rolling 24-month performance period. The Russell
2000 is composed of the smallest 2000 stocks in the Frank Russell
annual ranking of 3000 common stocks by market capitalization. The
Russell 2000 is a widely recognized common stock index of small to
medium size companies. Total return performance on the Russell 2000
includes dividends and is reported monthly on market capitalization-
weighted basis. When the Fund performs better than the Russell 2000, it
pays the Investment Advisor an incentive fee; less favorable
performance than the Russell 2000 reduces the basic fee. Each 1.00% of
the difference in performance between the Fund and the Russell 2000
during the performance period is equal to a 0.10% adjustment to the
basic fee. The maximum annualized performance adjustment rate is +/-
0.50% of average net assets which would be added to or deducted from
the advisory fee if the Fund outperformed or under performed the
Russell 2000 by 5.00%. The effect of this performance fee adjustment is
that the basic advisory fee may be increased as high as an annual rate
of 1.25% or decreased to as low as an annual rate of 0.25% of the
Fund's average daily net asset value. Due to the complexities of
researching and investing in small-cap equity securities, the advisory
and incentive fees (if realized) paid by the Fund are higher than those
paid by most other investment companies. Additionally, the Fund's
incentive fee of plus or minus 0.50% is greater than that of other
mutual funds with similar objectives which pay incentive fees.
Service Providers and Underwriter
FPS is a wholly-owned subsidiary of FinDaTex, Inc. Certain directors and
officers of Stratton Management Company, the Investment Advisor to the Funds,
and certain directors and officers of each Fund are controlling shareholders of
FinDaTex, Inc. FPS Broker Services ("FPBS) , the Funds underwriter, is a
wholly-owned subsidiary of FPS.
FPS serves as the Funds' accounting services agent, and is responsible for
certain accounting services (e.g. computation of the net asset value of the
Funds' shares and maintenance of the Funds' books and financial records).
Page 11
<PAGE>
1. SMDS - For the fiscal years ended January 31, 1995 and 1996, the Fund
paid FPS $26,000 each year in fees pursuant to the Accounting Services
Agreement . For the period from February 1, 1996 through December 31, 1996,
the Fund paid FPS $23,833 in fees pursuant to the Accounting Services
Agreement.
2. SGF - For the fiscal years ended May 31, 1995 and 1996, the Fund paid
FPS $20,000 each year in fees pursuant to the Accounting Services
Agreement. For the period of June 1, 1996 through December 31, 1996, the
Fund paid FPS $11,667 in fees pursuant to the Accounting Services
Agreement.
3. SSCY - For the fiscal years ended March 31, 1995 and 1996, the Fund paid
FPS $20,000 each year in fees pursuant to the Accounting Services
Agreement. For the period from April 1, 1996 through December 31, 1996, the
Fund paid FPS $15,000 in fees pursuant to the Accounting Services
Agreement.
FPS serves as the Funds' transfer agent and dividend-paying agent. FPS annually
receives $13.00 per account for providing transfer agent and dividend disbursing
agent services.
FPS serves as the Funds' Administrator, and is responsible for certain
administrative services including responsibility for all federal and state
compliance matters.
1. SMDS- FPS is entitled to receive a fee payable monthly at the annual
rate of $30,000 per year. For the fiscal years ended January 31, 1995 and
1996 the Fund paid FPS $30,000 each year in fees for administrative
services. For the period from February 1, 1996 through December 31, 1996,
the Fund paid FPS $27,500. The Investment Advisor has waived $15,000
annually of the compensation due it under the Investment Advisory
Agreement, to offset a portion of the fee that the Fund will incur under
the Administration Agreement. This fee waiver can be terminated or reduced
by the Investment Advisor upon 60 days prior written notice to the Fund.
2. SGF- FPS is entitled to receive a fee payable monthly at the annual rate
of $30,000 per year. For the fiscal years ended May 31, 1995 and 1996 the
Fund paid FPS $30,000 each year in fees for administrative services. For
the period from June 1, 1996 through December 31, 1996, the Fund paid FPS
$17,500. The Investment Advisor has waived $15,000 annually of the
compensation due it under the Investment Advisory Agreement, to offset a
portion of the fee that the Fund will incur under the Administration
Agreement. This fee waiver can be terminated or reduced by the Investment
Advisor upon 60 days prior written notice to the Fund.
3. SSCY- FPS is entitled to receive a fee payable monthly at the annual
rate of $10,000 per year. For the fiscal years ended March 31, 1995 and
1996, the Fund paid FPS $10,000 each year in fees for administrative
services. For the period from April 1, 1996 through December 31, 1996, the
Fund paid FPS $7,500.
The Funds' independent auditor is Tait, Weller & Baker. Their offices are
located at 2 Penn Center Plaza, Suite 700, Philadelphia PA 19102-1707. The
auditor's responsibilities are (1) to ensure that all relevant accounting
principles are being followed by the Funds; and (2) to report to the Boards of
Directors concerning the Funds' operations.
The Bank of New York, 48 Wall Street, New York, New York 10286 serves as the
custodian of each Fund's assets pursuant to custodian agreements. Under such
agreements, The Bank of New York (1) maintains a separate account or accounts in
the name of the Funds; (2) holds and transfers portfolio securities on account
of the Funds; (3) accepts receipts and makes disbursements on money on behalf
Page 12
<PAGE>
of the Funds; (4) collects and receives all income and other payments and
distributions on account of the Funds' securities; and (5) makes periodic
reports to the Boards of Directors concerning the Funds' operations.
The Funds have entered into Underwriting Agreements with FPBS. FPBS acts as an
underwriter of the Funds' shares for the purpose of facilitating the
registration of shares. In this regard, FPBS has agreed at its own expense to
qualify as a broker/dealer under all applicable federal or state laws in those
states which the Funds shall from time to time identify to FPBS as states in
which it wishes to offer its shares for sale, in order that state registrations
may be maintained for the Funds.
FPBS is a broker/dealer registered with the Securities and Exchange Commission
and a member in good standing of the National Association of Securities Dealers,
Inc. FPBS is an affiliate of the Investment Advisor inasmuch as both the
Underwriter and the Investment Advisor are under common control.
For the services to be provided under the Underwriting Agreement in facilitating
the registration of Funds shares under state securities laws, FPBS has received
an annual fee of $3,000 from each Fund for providing these services in each of
the last three fiscal years. This fee is included in the net expenses of the
Funds. The Funds shall continue to bear the expense of all filing or
registration fees incurred in connection with the registration of shares of the
Funds under state securities laws. The Funds pay no compensation to FPBS for its
assistance in sales of Funds shares. The Investment Advisor pays certain
out-of-pocket expenses, plus the cost for each employee to be licensed as a
Registered Representative by FPBS.
The Underwriting Agreement may be terminated by either party upon 60 days prior
written notice to the other party, and if so terminated, the pro-rata portion of
the unearned fee will be returned to the Funds.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
The Funds seek to obtain the best price and execution in all purchases and sales
of securities, except when the authorization to pay higher commissions for
research and services, as provided for in the Investment Advisory Agreements, is
exercised. Purchases and sales of over-the-counter securities are ordinarily
placed with primary market makers acting as principals. Consistent with its
obligation to seek the best price and execution, the Funds may place some
purchases and sales of portfolio securities with dealers or brokers who provide
statistical and research information to the Investment Advisor. Statistical and
research services furnished by brokers through whom the Funds effects securities
transactions in accordance with these procedures are ordinarily of general
application and may be used by the Advisor in servicing other accounts as well
as that of the Funds. In addition, not all such services may be used in
connection with the Investment Advisor's activities on behalf of the Funds.
Portfolio transactions are assigned to brokers, and commission rates negotiated,
based on an assessment of the reliability and quality of a broker's services,
which may include research and statistical information such as reports on
specific companies or groups of companies, pricing information, or broad
overviews of the stock market and the economy.
Although investment decisions for the Funds will be made independently from
investment decisions made with respect to other clients advised by the
Investment Advisor, simultaneous transactions may occur on occasion when the
same security is suitable for the investment objectives of more than one client.
When two or more such clients are simultaneously engaged in the purchase or sale
of the same security, to the extent possible the transactions will be averaged
as to price and allocated among the clients in accordance with an equitable
formula. In some cases this system could have a detrimental effect on the price
or quantity of a security available to the Funds. In other cases, however, the
ability
Page 13
<PAGE>
of the Funds to participate with other clients of the Investment Advisor in
volume transactions may produce better executions for the Funds.
The Investment Advisory Agreements contain provisions which authorize the
Investment Advisor to recommend and cause the Funds to pay brokerage commissions
in excess of commissions which might be charged by other brokers, where a
determination is made that the amount of commission paid is reasonable in
relation to the brokerage and research services provided by the broker to the
Funds, viewed in terms of the particular transaction or the overall
responsibilities of the Investment Advisor with respect to the Funds. In
addition, the Investment Advisory Agreements recognize that the Investment
Advisor may, at its expense, acquire statistical and factual information, advice
about economic factors and trends and other appropriate information from others
in carrying out its obligations. For SGF, during the fiscal years ended May 31,
1995 and 1996, and the period June 1, 1996 through December 31, 1996, no
brokerage commissions were paid by the Fund pursuant to this provision. For
SMDS, during the fiscal year ended January 31, 1995 and 1996 and the period
February 1, 1996 through December 31, 1996, no brokerage commissions were paid
by the Fund pursuant to this provision. For SSCY, during the fiscal years ended
March 31, 1995, 1996 and the period April 1, 1996 through December 31, 1996, no
brokerage commissions were paid by the Fund pursuant to this provision.
1. SMDS - During the fiscal years ended January 31, 1995, 1996, and the
period from February 1, 1996 through December 31, 1996, the Fund paid
$274,673, $280,842, and $337,175 respectively, in brokerage commissions,
substantially all of which were paid to brokers which had provided
research, statistical data or pricing information to the Investment
Advisor. The variation in these commissions from year to year reflects
primarily the amount of total net assets in the Fund and to a lesser extent
the annual turnover rate. For the fiscal years ended December 31, 1996 and
January 31, 1996, the Fund's portfolio turnover rate was 69.19% and 53.30%,
respectively.
2. SGF - During the fiscal years ended May 31, 1995, 1996, and the period
from June 1, 1996 through December 31, 1996, the Fund paid $33,383, $13,398
and $24,150 respectively, in brokerage commissions, substantially all of
which were paid to brokers which had provided research, statistical data or
pricing information to the Investment Advisor. The variation in these
commissions from year to year reflects primarily the amount of total net
assets in the Fund and to a lesser extent the annual turnover rate. For the
fiscal years ended December 31, 1996 and May 31, 1996, the Fund's portfolio
turnover rate was 20.32% and 15.41%, respectively.
3. SSCY - During the fiscal years ended March 31, 1995, 1996, and the
period from April 1, 1996 through December 31, 1996, the Fund paid $27,839,
$22,378, and $29,899 respectively, in brokerage commissions, substantially
all of which were paid to brokers which had provided research, statistical
data or pricing information to the Investment Advisor. For the fiscal years
ended December 31, 1996 and March 31, 1996, the Fund's portfolio turnover
rate was 35.86% and 33.50%, respectively.
Each Fund is required to identify any securities of its regular brokers or
dealers (as defined in Rule 10b- 1 under the 1940 Act) or their parents held by
such Fund as of the close of its most recent fiscal years. As of December 31,
1996, SMDS held convertible debentures of Interstate/Johnson Lane, Inc. with an
aggregate value of $2,599,172.
Page 14
<PAGE>
RETIREMENT PLANS
Defined Contribution Plans
The Funds offer a profit sharing and a money purchase plan (the "Defined
Contribution Plans") for use by both self-employed individuals (sole
proprietorships and partnerships) and corporations who wish to use shares of the
Funds as a funding medium for a retirement plan qualified under the Internal
Revenue Code.
Annual deductible contributions to the Defined Contribution Plans may generally
be made on behalf of each participant in a total amount of up to the lesser of
20% of a self-employed participant's pre-contribution earned income (after
reducing the earned income by the self-employed's deduction for 50% of his or
her self-employment tax) (25% of a non-self-employed participant's wages) or
$30,000. Unless the employer chooses to take Social Security contributions into
account, the same percentage of earned income (or wages) must be contributed on
behalf of each participant in the Defined Contribution Plans. Earned income and
wages are generally limited for this purpose to $150,000 (for 1996 -- indexed
for cost-of-living).
The Internal Revenue Code provides certain tax benefits for participants in a
Defined Contribution Plan. For example, amounts contributed to a Defined
Contribution Plan and earnings on such amounts are not taxed until distributed.
However, distributions to a participant from a Defined Contribution Plan before
the participant attains age 59 1/2 will (with certain exceptions) result in an
additional 10% tax on the amount included in the participant's gross income.
Individual Retirement Account
The Funds offer an individual retirement account (the "IRA") for use by
individuals with compensation for services rendered (including earned income
from self-employment) who wish to use shares of the Funds as a funding medium
for individual retirement saving. However, except for rollover contributions, an
individual who has attained, or will attain, age 70 1/2 before the end of the
taxable year may only contribute to an IRA for a nonworking spouse who is under
age 70 1/2.
The general deductible limit for contributions to an IRA is the lesser of 100%
of compensation or $2,000 ($4,000 total for the individual and the individual's
nonworking spouse with two separate accounts). However, this limit is phased out
for certain individuals who are active participants in an employer-maintained
retirement plan. If such an individual is a married person with adjusted gross
income ("AGI") on his or her joint return in excess of $40,000 but less than
$50,000, or a single person with AGI in excess of $25,000 but less than $35,000,
the individual's $2,000 deduction will be decreased proportionately. A married
individual with AGI on his or her joint return of $50,000 or more, or a single
individual with AGI of $35,000 or more, may not make any deductible contribution
if he or she is an active participant in a retirement plan.
Even if the individual is not an active participant in a retirement plan, if his
or her spouse is a participant in such a plan and if their AGI, filed jointly,
is more than $40,000, the individual and his or her spouse will both be subject
to the phase-out discussed above. If neither the individual nor his or her
spouse is a participant in an employer-sponsored retirement plan, or if their
AGI is less than the $40,000 amount discussed above, the individual may continue
to make deductible contributions of up to the lesser of $2,000 ($4,000), or 100%
of compensation. (Beginning in 1997, if neither spouse is an active participant
in an employer-sponsored retirement plan, or if their combined AGI is less than
$40,000, a married couple filing a joint tax return may make deductible
contributions up to the lesser of $4,000 or 100% of their combined
compensation.)
Page 15
<PAGE>
Nondeductible contributions to the IRA may be made to the extent an individual
is unable to make a deductible contribution under the phase-out rules discussed
above. In addition, an individual may roll over to the IRA funds (in any amount)
that he or she has received in a qualifying distribution from an employer's
retirement plan.
The individual's IRA assets (and earnings thereon) may generally not be
withdrawn (without the individual's incurring an additional 10% tax on the
amount included in the individual's gross income) until age 59 1/2. Earnings on
amounts contributed to the IRA are not taxed until distributed.
403(b)(7) Retirement Plan
The Funds offer a plan (the "403(b)(7) Plan") for use by schools, hospitals, and
certain other tax-exempt organizations or associations who wish to use shares of
the Funds as a funding medium for a retirement plan for their employees.
Contributions are made to the 403(b)(7) Plan based on a reduction of the
employee's regular compensation. Such contributions, to the extent they do not
exceed applicable limitations (including a generally applicable limitation of
$9,500 per year), are excludable from the gross income of the employee for
Federal income tax purposes. Assets withdrawn from the 403(b)(7) Plan are
subject to Federal income tax and to the additional 10% tax on early withdrawals
discussed above under "Defined Contribution Plans."
Simple Individual Retirement Account
The Funds offer a plan (the "Simple IRA") for use by companies or other
tax-exempt organizations who wish to use shares of the Funds as a funding medium
for a retirement plan for their employees. Contributions are made to the Simple
IRA's based on a reduction of the employee's regular compensation. Such
contributions, to the extent they do not exceed applicable limitations
(including a generally applicable limitation of $6,000 per year), are excludable
from the gross income of the employee for Federal income tax purposes. Assets
withdrawn from the Simple IRA are subject to Federal income tax and to the
additional 10% tax on early withdrawals discussed above under "Defined
Contribution Plans." Also, any distribution within two years of your
participation in the plan then the penalty is increased to 25%.
General Information
In all these Plans, distributions of net investment income and capital gains
will be automatically reinvested in the Funds.
The custodian of the plans is Semper Trust Company ("Semper"), Plymouth Meeting,
Pennsylvania. Semper is controlled by certain directors and officers of the
Funds and certain directors and officers of Stratton Management Company. FPS
serves as the fiduciary agent for Semper and in such capacity is responsible for
all record keeping, applicable tax reporting and fee collection in connection
with the plan accounts. Semper is entitled to deduct its fees and administrative
expenses by liquidating shares annually in September, unless the annual
maintenance fee is paid separately to FPS. The annual maintenance fee is
currently $12.00 per plan account. This fee may be amended without notice by
Stratton Management Company, Semper or FPS in the future.
The foregoing brief descriptions are not complete or definitive explanations of
the Defined Contribution, IRA, 403(b)(7) Plan or Simple IRA plans available for
investment in the Funds. Any person who wishes to establish a retirement plan
account may do so by contacting the Funds directly. The complete Plan documents
and applications will be provided to existing or prospective shareholders upon
request, without obligation. Since all these Plans involve setting aside assets
for future years, it is important
Page 16
<PAGE>
that investors consider their needs and whether the investment objective of the
Funds as described in this Statement of Additional Information and in the
Prospectus is most likely to fulfill them. The Funds recommend that investors
consult their attorneys or tax advisors to determine if the retirement programs
described herein are appropriate for their needs.
ADDITIONAL PURCHASE AND REDEMPTION
INFORMATION
The computation of the offering price per share of each Fund based on the value
of each Fund's net assets on December 31, 1996 and each Fund's outstanding
securities on such date is as follows:
<TABLE>
<CAPTION>
SMDS SGF SSCY
<S> <C> <C> <C>
Net Assets $103,779,735 $44,801,256 $21,691,076
Outstanding Shares 3,783,660 1,659,408 645,878
Net Asset Value,
Offering Price and
Redemption Price per Share $27.43 $27.00 $33.58
</TABLE>
ADDITIONAL INFORMATION CONCERNING TAXES
The following summarizes certain additional tax considerations generally
affecting the Funds and their shareholders that are not described in the
Prospectus. No attempt is made to present a detailed explanation of the tax
treatment of the Funds or their shareholders, and the discussion here and in the
Prospectus is not intended as a substitute for careful tax planning. Potential
investors should consult their tax advisors with specific reference to their own
tax situation.
As stated in the Prospectus, a Fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code, as amended ("the Code")
for each taxable year. A Fund will not be treated as a regulated investment
company for a taxable year if, among other things, the Fund derives 30% or more
of its gross income from the sale or other disposition of securities and certain
other investments held for less than three months. Ordinary income of
individuals is taxable at a maximum nominal marginal rate of 39.6%; although
because of limitations on itemized deductions otherwise allowable and the
phase-out of personal exemptions, the maximum effective marginal rate of tax for
certain taxpayers may be more than 39.6% in certain circumstances. Net long-term
capital gains are taxed at a maximum normal rate of 28%. For corporations,
long-term capital gains and ordinary income are both taxable at a maximum
nominal rate of 35%.
A 4% nondeductible excise tax is imposed on regulated investment companies that
fail to currently distribute an amount equal to specified percentages of their
ordinary taxable income and capital gain net income (excess of capital gains
over capital losses). The Funds intend to make sufficient distributions or
deemed distributions of its ordinary taxable income and any capital gain net
income prior to the end of each calendar year to avoid liability for this excise
tax.
If for any fiscal year a Fund does not qualify for the special tax treatment
afforded regulated investment companies, all of its taxable income will be
subject to Federal income tax at regular corporate rates (without any deduction
for distributions to its shareholders). In such event, dividend distributions
would be taxable as ordinary income to shareholders to the extent of the Fund's
current and accumulated earnings and profits, and would be eligible for the
dividends received deduction for corporations.
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<PAGE>
The foregoing discussion is based on Federal tax laws and regulations which are
in effect on the date of this Statement of Additional Information; such laws and
regulations may be changed by legislative or administrative action.
ADDITIONAL INFORMATION ON PERFORMANCE CALCULATIONS
From time to time, the Funds' total return may be quoted in advertisements,
shareholder reports or other communications to shareholders.
TOTAL RETURN CALCULATIONS
The Funds compute their average annual total return by determining the average
annual compounded rate of return during specified periods that equate the
initial amount invested to the ending redeemable value of such investment. This
is done by dividing the ending redeemable value of a hypothetical $1,000 initial
investment by $1,000 and raising the quotient to a power equal to one divided by
the number of years (or fractional portion thereof) covered by the computation
and subtracting one from the result.
This calculation can be expressed as follows:
T=[(ERV) 1/n- 1]
---
P
Where: T = average annual total return.
ERV = ending redeemable value at the end of the period
covered by the computation of a hypothetical
$1,000 investment made at the beginning of the
period.
P = hypothetical initial investment of $1,000.
n = period covered by the computation, expressed in
terms of years.
The Funds compute their aggregate total return by determining the aggregate
compounded rate of return during specified periods that likewise equate the
initial amount invested to the ending redeemable value of such investment.
The formula for calculating aggregate total return is as follows:
A=(ERV-P)
-------
P
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<PAGE>
Where: A = aggregate total return.
ERV = ending redeemable value at end of the period
covered by the computation of a hypothetical
$1,000 investment made at the beginning of the
period.
P = hypothetical initial investment of $1,000.
The calculations of average annual total return and aggregate total return
assume the reinvestment of all dividends and capital gain distributions on the
reinvestment dates during the period. The ending redeemable value (variable
"ERV" in each formula) is determined by assuming complete redemption of the
hypothetical investment and the deduction of all nonrecurring charges at the end
of the period covered by the computations.
Since performance will fluctuate, performance data for the Funds cannot
necessarily be used to compare an investment in the Funds' shares with bank
deposits, savings accounts and similar investment alternatives which often
provide an agreed or guaranteed fixed yield for a stated period of time.
Shareholders should remember that performance is generally a function of the
kind and quality of the instruments held in a portfolio, portfolio maturity,
operating expenses and market conditions.
1. SMDS - Based on the foregoing calculations, the average annual total
returns for the Fund for the one year, five year and ten year periods ended
December 31, 1996 were 8.58%, 6.75% and 7.60%, respectively. The aggregate
total returns for the five year and ten year periods ended December 31,
1996 were 38.63% and 108.03%, respectively.
2. SGF - Based on the foregoing calculations, the average annual total
returns for the Fund for the one year, five year and ten year periods ended
December 31, 1996 were 14.17%, 13.85% and 12.27%, respectively. The
aggregate total returns for the five year and ten year periods ended
December 31, 1996 were 91.31%, and 218.07%, respectively.
3. SSCY - Based on the foregoing calculations, the average annual total
returns for the Fund for the one year period ended December 31, 1996 was
14.96% and from inception was 12.12%. The aggregate total return from
inception to the period ended December 31, 1996 was 53.11%.
FINANCIAL STATEMENTS
The audited financial statements and notes thereto for each Fund contained in
each Fund's Annual Report dated December 31, 1996 are incorporated by reference
into this Statement of Additional information and have been audited by Tait,
Weller & Baker, whose reports also appear in the Annual Reports and are also
incorporated by reference herein. No other parts of the Annual Reports are
incorporated by reference herein. Such financial statements and notes thereto
have been incorporated herein in reliance on the reports of Tait, Weller &
Baker, independent accountants, given on the authority of said firm as experts
in auditing and accounting, incorporated by reference from the Funds' 1996
Annual Reports to Shareholders.
Page 19
<PAGE>
POST-EFFECTIVE AMENDMENT NO. 44
TO REGISTRATION STATEMENT NO. 2-44752
on
FORM N-1A
PART C: OTHER INFORMATION
Item 24. Financial Statements and Exhibits
- -------------------------------------------
(a) Financial Statements:
(1) The Financial Highlights are included in Part A of this Registration
Statement on Form N-1A.
(2) Incorporated by reference in Part B hereof:
The audited financial statements and related notes thereto as well as
the auditors report thereon for the fiscal year ended December 31,
1996 are incorporated by reference to the Annual Report to
shareholders as filed with the Securities and Exchange Commission on
February 28, 1997 pursuant to Rule 30b2-1 of the Investment Company
Act of 1940.
(b) Exhibits:
(1) Articles of Incorporation of Registrant dated June 21, 1985 are
incorporated herein by reference to Exhibit 99.1 of Post-Effective
Amendment No. 43 to Registrant's Registration Statement on Form N-1A
(File No's 2-44752/811-2297), filed on September 27, 1996 ("Post-
Effective Amendment No. 43").
(2) By-Laws of Registrant, as amended, dated June 22, 1989 are incorporated
herein by reference to Exhibit 99.2 of Post-Effective Amendment No.
43.
(3) None.
(4) Specimen certificate for shares of common stock of Registrant is filed
herein a Exhibit 99.4.
(5) Investment Advisory Agreement dated July 1, 1989, between Registrant
and Stratton Management Company is incorporated herein by reference to
Exhibit 99.5 of Post-Effective Amendment No. 43.
(6) (a) Underwriting Agreement dated June 22, 1993 between Registrant and
FPS Broker Services, Inc. (formerly known as Fund/Plan Broker
Services, Inc.) is incorporated herein by reference to Exhibit
99.6 of Post-Effective Amendment No. 43.
(b) Amendment to Underwriting Agreement dated June 25, 1996 between
Registrant and FPS Broker Services, Inc. (formerly known as
Fund/Plan Broker Services, Inc.) is filed herein as
Exhibit 99.6.b.
(7) None.
<PAGE>
(8) (a) Custodian Agreement between Registrant and The Bank of New York
dated November 1, 1994 is incorporated herein by reference to
Exhibit No. 8 (a) of Post-Effective Amendment No 42 to
Registrant's Registration Statement on Form N-1A (File
No. 2-44752/811-2297), filed on September 29, 1995("Post-
Effective Amendment No. 42").
(b) Custody Administration and Agency Agreement between Registrant
and FPS Services, Inc. (formerly known as Fund/Plan Services,
Inc.) dated November 1, 1994 is incorporated herein by reference
to Exhibit No. 8 (b) of Post-Effective Amendment No 42.
(9) (a) Administration Agreement dated March 1, 1990 between Registrant
and FPS Services, Inc. (formerly known as Fund/Plan Services,
Inc.) is filed herein as Exhibit 99.9.a.
(b) Shareholder Services Agreement (formerly known as Administration
Agreement) dated September 27, 1985 between Registrant and First
Pennsylvania Bank N.A. is filed herein as Exhibit 99.9.b.
(c) Amendment No. 1 to Shareholder Services Agreement (formerly known
as Administration Agreement) dated December 11, 1985 between
Registrant and FPS Services, Inc. (formerly known as Fund/Plan
Services, Inc.) is filed herein as Exhibit 99.9.c.
(d) Amendment No. 2 to Shareholder Services Agreement (formerly known
as Administration Agreement) dated June 24, 1987 between
Registrant and FPS Services, Inc. (formerly known as Fund/Plan
Services, Inc.) is filed herein as Exhibit 99.9.d.
(e) Amendment to Shareholder Services Agreement (formerly known as
Administration Agreement) dated February 27, 1990 changing title
of September 27, 1985 Administration Agreement to Shareholder
Services Agreement is filed herein as Exhibit 99.9.e.
(f) Amendment to Shareholder Services Agreement (formerly known as
Administration Agreement) dated September 24, 1991 between
Registrant and FPS Services, Inc. (formerly known as Fund/Plan
Services, Inc.) changing signature guarantee minimum is filed
herein as Exhibit 99.9.f.
(g) Accounting Services Agreement dated June 1, 1988 between
Registrant and FPS Services, Inc. (formerly known as Fund/Plan
Services, Inc.) with notice of February 22, 1989 is filed herein
as Exhibit 99.9.g.
(10) Opinion and Consent of Counsel filed under Rule 24f-2 of the 1940
Act as part of Registrant's Rule 24f-2 Notice filed on February
28, 1997.
(11) (a) Consent of Tait, Weller & Baker filed herein as Exhibit 99.11.a.
(12) None.
(13) None.
(14) (a) Form of 403(b)(7) Retirement Plan is incorporated herein by
reference to Exhibit 99.1 of Post-Effective Amendment No. 43
to Registrant's Registration Statement on Form N-1A, filed on
September 27, 1996.
<PAGE>
(b) Form of Individual Retirement Account (I.R.A.) is filed herein
by as Exhibit 99.14.b.
(c) Form of Self-Employed Retirement Plan (Defined Contribution
Plans) as amended June 30, 1994 incorporated herein by reference
to Exhibit No. 14 (c) of Post-Effective Amendment No 42 to
Registrant's Registration Statement on Form N-1A, filed on
September 29, 1995.
(15) None.
(16) Schedule of computations of performance quotations is filed herein as
Exhibit 99.16.
(17) Financial Data Schedule is filed herein as Exhibit 27.
(18) Powers of Attorney are filed herein as Exhibit No. 18.
Item 25. Persons Controlled by or under Common Control with Registrant.
- ------------------------------------------------------------------------
Registrant is controlled by its Board of Directors
Item 26. Number of Holders of Securities.
- ------------------------------------------
<TABLE>
<CAPTION>
Number of Record Holders
Title of Class (as of February 28, 1997)
-------------- -------------------------
<S> <C>
Capital Stock
par value $0.10 1,222
per share
</TABLE>
Item 27. Indemnification.
- --------------------------
Section 2-418 of the Corporations and Associations Article of the Annotated
Code of Maryland gives Registrant the power to indemnify its directors and
officers under certain situations. Article VII, Section 3 of Registrant's
Articles of Incorporation, incorporated by reference as Exhibit (1) hereto,
and Article VII, Sections 7.01 and 7.02 of Registrant's By-Laws, as
amended, incorporated by reference as Exhibit (2) hereto, provide for the
indemnification of Registrant's directors and officers. Each
indemnification must be authorized by the Board of Directors of Registrant
by a majority of a quorum consisting of directors who were not parties to
the action, suit or proceeding, or by independent legal counsel in a
written opinion, or by the shareholders. Notwithstanding the foregoing,
Article VI Section 1 (a) of Registrant's By-Laws provides that no director
or officer of Registrant shall be indemnified against any liability to
Registrant or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of such person's duties to the corporation.
In addition, the aforesaid section of the Corporations and Associations
Article of the Annotated Code of Maryland gives Registrant the power (a) to
purchase and maintain insurance for its directors and officers against any
liability asserted against them and incurred by them in that capacity or
arising out of their status as such, whether or not Registrant would have
the power to indemnify such directors and officers under such statute, and
(b) under certain circumstances to pay the reasonable expenses incurred by
a director or officer in defending an action, suit or proceeding in advance
of the final disposition of the action, suit or proceeding.
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of
the Registrant, pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Indemnification of the Registrant's Custodian, Transfer Agent,
Accounting/Pricing Agent and Administrator against certain stated
liabilities is provided for by the following documents:
(a) Article XVII (14) of the Custodian Agreement between the Registrant and
Bank of New York is incorporated herein by reference to Exhibit
8(a)Post-effective Amendment No. 42;
(b) Section 26 of the Shareholder Services Agreement, included as Exhibit
No's. 99.9.b through 99.9.f;
(c) Section 10 of the Accounting Services Agreement, included as Exhibit
No. 99.9.g; and
(d) Section 8 of the Administration Agreement, included as Exhibit No.
99.9.a.
Item 28. Business and Other Connections of Investment Advisor.
- ---------------------------------------------------------------
Stratton Management Company provides investment advisory services
consisting of portfolio management for a variety of individuals and
institutions, and as of December 31, 1996 had approximately $1.4
billion in assets under management. It presently also acts as
investment advisor to two other registered investment companies,
Stratton Monthly Dividend Shares, Inc. and The Stratton Funds, Inc.
For information as to any other business, vocation or employment of a
substantial nature in which each director or officer of the
Registrant's investment advisor has been engaged for his own account or
in the capacity of director, officer, employee, partner or trustee,
reference is made to Form ADV (File #801-8681) filed by it under the
Investment Advisors Act of 1940, as amended.
Item 29. Principal Underwriter.
- -------------------------------
(a) FPS Broker Services, Inc. ("FPBS") (formerly known as Fund/Plan Broker
Services, Inc.) the principal underwriter for the Registrant's securities,
currently acts as principal underwriter for the following entities:
Bjurman Funds
CT&T Funds
Farrell Alpha Strategies
Trainer Wortham First Mutual Funds
Focus Trust, Inc.
IAA Trust Mutual Funds
Polynous Trust
<PAGE>
Matthews International Funds
McM Funds
Smith Breeden Series Fund
Smith Breeden Short Duration U.S. Government Fund
Smith Breeden Trust
Sage/Tso Trust
The Stratton Funds, Inc.
Stratton Growth Fund, Inc.
Stratton Monthly Dividend Shares, Inc.
The Timothy Plan, Inc.
(b) The information required by this Item 29 with respect to each Director,
Officer or Partner of FPBS is incorporated herein by reference to Form BD
filed by FPBS with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934 (Sec File No. 8-41540).
(c) Not applicable.
James W. Stratton may be considered a control person of the Underwriter due to
his direct or indirect ownership of FPS Services, Inc., (formerly known as
Fund/Plan Services, Inc.) the parent of FPBS.
Item 30. Location of Accounts and Records.
- -------------------------------------------
All records described in Section 31(a) of the 1940 Act and the Rules 17 CFR
270.31a-1 to 31a-31 promulgated thereunder, are maintained by Stratton
Management Company, the Fund's Investment Advisor, Plymouth Meeting
Executive Campus, 610 W. Germantown Pike, Suite 300, Plymouth Meeting,
Pennsylvania 19462-1050, except for those maintained by the Fund's
Custodian, The Bank of New York, 48 Wall Street, New York New York 10286,
and FPS Services, Inc., (formerly known as Fund/Plan Services, Inc.) the
Fund's Administrator, Transfer, Redemption and Dividend Disbursing Agent,
Administrator of its Retirement Plans and Accounting Services Agent, 3200
Horizon Drive, King of Prussia, Pennsylvania 19406.
Item 31. Management Services.
- ------------------------------
Not Applicable.
Item 32. Undertakings.
- -----------------------
The Registrant undertakes to provide its Annual Report upon request without
charge to any recipient of the Fund's Prospectus.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, as amended, the Registrant has duly caused this Post-
Effective Amendment No. 44 to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in Plymouth Meeting, PA, on
the 6th day of March, 1997.
-
STRATTON GROWTH FUND, INC.
---------------------------------
*James W. Stratton,
Director and Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 44 to the Registrant's Registration Statement has been signed
below by the following persons in the capacities and on the date(s) indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ James W. Stratton Director and March 6, 1997
- --------------------- Chairman of the Board
James W. Stratton
/s/ John A. Affleck President March 6, 1997
- -------------------
John A Affleck
/s/ Patricia Sloan Secretary/Treasurer March 6, 1997
- -------------------
Patricia Sloan
* Lynne M. Cannon Director March 6, 1997
* John J. Lombard, Jr. Director March 6, 1997
* Henry A. Rentschler Director March 6, 1997
* Merritt N. Rhoad, Jr. Director March 6, 1997
* Alexander F. Smith Director March 6, 1997
* Richard W. Stevens Director March 6, 1997
* By:
/s/ William J. Baltrus
- ----------------------
William J. Baltrus
as Attorney-in-Fact and Agent, pursuant to Power of Attorney
</TABLE>
<PAGE>
Exhibit (4)
NUMBER SHARES
STRATTON GROWTH FUND, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
This certifies that
(SEE REVERSE FOR CERTAIN DEFINITIONS)
is the owner of
SHARES OF CAPITAL STOCK OF
STRATTON GROWTH FUND, INC.,
fully paid and non-assessable, transferable only on the books of the Corporation
in person or by duly authorized attorney, upon the surrender of this Certificate
properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be hereunto
affixed
this__________________________ day of ________________________ A.D. 19__
Patricia L. Sloan John A. Affleck
SECRETARY PRESIDENT
STRATTON GROWTH FUND, INC.
SEAL
1985
MARYLAND
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM- as tenants in common UNIF GIFT MIN ACT- Custodian
TEN ENT- as tenants by the entireties (Cust) (Minor)
JT TEN- As joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act
in common (State)
Additional abbreviations may also be used though not in the list above.
For value received ____________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________ shares
of the capital stock represented by the within Certificate,
and do hereby irrevocably constitute and appoint
______________________________________________________ Attorney
so transfer the said stock on the books of the within named
Corporation with full power of such substitution in the premises.
Dated ________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
Exhibit 6(b)
AMENDMENT TO UNDERWRITING AGREEMENT
===================================
This AGREEMENT, dated as of the 25th day of June, 1996 made by and
---- ----------
between Stratton Growth Fund, Inc. (the "Fund") operating as an open-end
management investment company registered under the Investment Company Act of
1940, as amended, duly organized and existing under the laws of the State of
Maryland and Fund/Plan Broker Services, Inc. ("FPBS"), a corporation duly
-------------------------------
organized and existing under the laws of the State of Delaware (collectively,
the "Parties").
WITNESSETH THAT:
WHEREAS, the Fund and FPBS have entered into an Agreement dated June
22, 1993, wherein FPBS agreed to provide underwriting services and other related
services to the Fund (Underwriting Agreement); and
WHEREAS, the Parties wish to amend the Underwriting Agreement to
indicate the portion of fees payable under the Underwriting Agreement by the
Fund and the portion payable by Stratton Management Company.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties hereto, intending to be legally bound, do hereby
agree:
1. To amend the Fee Schedule to the Underwriting Agreement in the form
attached hereto.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
consisting of one typewritten page, together with an amended fee schedule, to be
signed by their duly authorized officers, as of the day and year first above
written.
Stratton Growth Fund, Inc. Fund/Plan Broker Services, Inc.
/s/ James W. Stratton /s/ Gerald J. Holland
- ------------------------------------ -------------------------------------
By: James W. Stratton, Chairman By: Gerald J. Holland, Vice President
/s/ Patricia L. Sloan /s/ Mary P. Efstration
- ------------------------------------ -------------------------------------
Attest: Patricia L. Sloan, Secretary Attest: Mary P. Efstration, Secretary
================================================================================
Amendment to Underwriting Agreement between Stratton Growth Fund, Inc. and
Fund/Plan Broker Services, Inc.
<PAGE>
FUND/PLAN BROKER SERVICES, INC.
FEE SCHEDULE
FOR
STRATTON GROWTH FUND, INC.
- --------------------------------------------------------------------------------
Underwriter will serve as sole underwriter of Stratton Growth Fund, Inc., a no-
load fund, for the exclusive purpose of facilitating the registration of its
shares of beneficial interest for sale in various states.
Fee: $3,000 per portfolio, annually
$2.00 per kit for inquiry/fulfillment with a $1,500 per month
minimum for all Funds managed by Stratton Management Company.
Fund/Plan Broker Services, Inc. in its Broker/Dealer capacity will license
employees of the Fund's Advisor, Stratton Management Company, who are engaged in
the sale of shares.
Fee: $1,000 per licensed representative, annually registered in 3
states or less
$3,500 per licensed representative, annually registered in all
states
All fees except the $3,000 annual per portfolio fee will be paid by the Fund's
Advisor, Stratton Management Company. The $3,000 annual fee per portfolio will
be paid by the Fund. Out-of-pocket expenses, including telephone, postage,
telecommunications and travel, will be billed to the Fund's Advisor separately.
================================================================================
Amendment to the Underwriting Agreement between Stratton Growth Fund, Inc. and
Fund/Plan Broker Services, Inc.
<PAGE>
Exhibit 9(a)
STRATTON GROWTH FUND, INC.
ADMINISTRATION AGREEMENT
AGREEMENT made this 1st day of March, 1990, by and between, STRATTON GROWTH
FUND, INC. a Maryland corporation (the "Fund") and FUND/PLAN SERVICES, INC., a
Delaware corporation (the "Administrator").
W I T N E S S E T H:
Whereas, the Fund is a registered open-end, investment company under the
Investment Company Act of 1940, as amended (the "Act"); and
Whereas, the Fund and the Administrator desire to enter into an agreement to
provide administration services for the Fund on the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto, intending to be legally hound, do
hereby agree as follows:
1. Appointment
The Fund hereby appoints the Administrator as administrator of the Fund for
the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. Duties and Obligations of the Administrator
(a) Subject to the succeeding provisions of this section and subject to the
direction and control of the Board of Directors of the Fund, the Administrator
shall provide certain administrative services to the Fund other than those
relating to the investment portfolio of the Fund, compliance with Subchapter M
of the Internal Revenue Code, the distribution of the Fund and the maintenance
of its financial records. A complete list of the Administrators obligations is
set forth in Appendix A to this Agreement. The Administrator shall:
(i) provide its own office space, facilities and equipment and personnel
for the performance of its duties under this Agreement.
(ii) take, on behalf of the Fund, all actions which appear to the Fund's
Board of Directors necessary to carry into effect the administration
of the Fund's affairs.
<PAGE>
(b) The Directors of the Fund shall cause the officers, Advisor,
Distributor, legal counsel, independent accountants, custodian and transfer
agent of the Fund to cooperate with the Administrator and to provide the
Administrator, upon request, with such information, documents and advice
relating to the Fund as is within the possession or knowledge of such persons,
in order to enable the Administrator to perform its duties hereunder. In
connection with its duties hereunder, the Administrator shall be entitled to
rely, and shall be held harmless by the Fund when acting in reliance, upon the
instructions, advice or any documents relating to the Fund provided to the
Administrator by any of the aforerment toned persons. Fees charged by such
persons shall he a Fund expense.
(c) Any activities performed by the Administrator under this section shall
be performed on a best efforts basis to conform, in all material respects, to
any requirements imposed by: (1) the provisions of the Investment Company Act of
1940 (the "Act") and the Securities Act of 1933 and of any rules or regulations
in force thereunder; (2) any other applicable provision of state and federal
law; (3) the provisions of the Articles of Incorporation and By-Laws of the Fund
as amended from time to time; (4) any policies and determinations of the Board
of Directors of the Fund; and (5) the fundamental policies of the Fund, as
reflected in its registration statement under the Act.
(d) Nothing in this Agreement shall prevent the Administrator or any
officer thereof fran acting as administrator for or with any other person, firm
or corporation. While the administrative services supplied to the Fund may be
different than those supplied to other persons, firms or corporations, the
Administrator shall give the Fund equitable treatment in supplying services. The
Fund recognizes that it is not to receive preferential treatment from the
Administrator as compared wi th the treatment given other persons, firms or
corporations.
(e) The Administrator will treat confidentially and as proprietary informal
ion of the Fund al1 records and other information reletive to the Fund and its
prior or present shareholders, and except as provided below, will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder. Any other use by the Administrator of the
information and records referred to above may be made only after prior
notification to and approval in writing by the Fund. Such approval shall not be
unreasonably withheld and may not be withheld where (i) the Administrator may be
exposed to civil or criminal contempt proceedings for failure to develop such
information; (ii) the Administrator is requested to divulge such information by
duly constituted authorities; or (iii) the Administrator is so required by the
Fund.
<PAGE>
3. Allocation of Expenses
All costs and expenses of the Fund shall be paid by the Fund, including,
but not limited to (i) fees paid to the Advisor and fees and out-of-pocket
expenses paid to the Administrator; (ii) interest and taxes; (iii) brokerage
fees and carrmissions; (iv) insurance premiums; (v) compensation and expenses of
its directors who are not affiliated persons of the Adviser; (vi) legal,
accounting and audit expenses; (vii) custodian and transfer agent, or
shareholder servicing agent, fees and expenses; (viii) expenses, including
clerical expenses, incident to the issuance, redemption or repurchase of its
shares, including issuance on the payment of, or reinvestment of, dividends;
(ix) fees and expenses incident to the registration under Federal or state
securities laws of the Fund or its shares; (x) expenses of preparing, setting in
type, printing and mailing prospectuses, statements of additional information,
reports and notices and proxy material to shareholders of the Fund; (xi) all
expenses incidental to holding meetings of the Fund's shareholders and
Directors; and (xii) such extraordinary expenses as may arise, including
litigation affecting the Fund and the legal obligations which the Fund may have
to indemnify its officers and Directors wi th respect thereto.
4. Compensation of the Administrator
(a) The Fund agrees to pay the Administrator, and the Administrator agrees
to accept as full compensation for all services rendered hereunder, an annual
fee of $20,000, payable in equal monthly installments and out-of-pocket expenses
incurred by the Administrator in the performance of services hereunder. Except
as hereinafter set forth, compensation under this Agreement shall be calculated
and accrued daily and the amounts of the daily accruals shall be paid monthly.
Out-of-pocket expenses shall include telecommunication charges, postage and del
ivery charges, record resent ion costs, reproduct ion charges and transportation
and lodging costs when travel on Fund business is required. The Fund authorizes
the Administrator to debit the Fund's custody account for invoices which are
rendered for the services performed hereunder. The invoices for the services
will be sent to the Fund after the debiting with indication that payment has
been made. Invoices for out-of-pocket expenses shall be reviewed by the Fund
prarr~ptly upon receipt and the Administrator shall be authorized to debit the
Fund's custody account upon approval of the invoices by the Fund. Upon any
termination of this Agreement before the end of any month, the fee for such part
of a month shall be prorated according to the proportion which such period bears
to the full monthly period and shall be provable upon the date of termination of
this Agreement.
(b) Should additional or fewer services or functions beyond those outlined
in Section 2 above, or in Appendix A attached, be desired or required of the
Administrator during the time that this contract is in effect, a written
amendment to this Administration Agreement reflecting such shall he signed by
both the Administrator and the Fund, and the carnpensation stated in Section 4
may be increased or decreased accordingly.
<PAGE>
5. Duration and Termination
(a) This Agreement shall go into effect on March 1, 1990 (the "Effective
Date") and shall continue in effect for two years from the Effective Date. This
Agreement shall continue in force from year to year thereafter, but only so long
as such continuance is approved (1) by the Administrator, (2) by vote, cast in
person at a meeting called for the purpose, of a majority of the Fund's
Directors who are not parties to this Agreement or interested persons (as
defined in the Act) of any such party, and (3) by vote of a rrejority of the
Fund's Board of Directors or a majority of the Fund ' s out s tend i ng voting
securities.
(b) This Agreement may be terminated by the Administrator at any t ime
without penalty upon giving the Fund one hundred twenty (120) days' written
notice (which notice tray be waived in writing by the Fund) and may be
terminated by the Fund at any time upon giving the Administrator one hundred
twenty (120) days' written notice (which notice may be waived in writing by the
Administrator) provided that such termination by the Fund shall be directed or
approved by the vote of a majority of all of its Directors in office at the
time.
(c) This Agreement shall autarnatically terminate in the event of its ass
ignment.
6. Amendment
The terms of this Agreement shall not be waived, altered, modi fled,
amended or supplemented in any manner whatsoever except by a written instrument
signed by the Administrator and the Fund.
7. Applicable Law
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania.
8. Limitation of Liability
(a) The execution and del ivery of this contract have been duly authorized
by the Board of Directors of the Fund and executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this Agreement shall be binding upon the assets and property of
the Fund only and shall not be binding upon any director, officer or shareholder
of the Fund individually.
(b) The Administrator, its directors, officers, employees, shareholders and
agents shal 1 not be 1 table for any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with the perforrrance of this
Agreement, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Administrator in the performance of its
obligations and duties under this Agreement.
<PAGE>
(c) Any person, even though also a director, officer, employee, shareholder
or agent of the Administrator, who may be or became an officer, director,
employee or agent of the Fund, shall be deemed, when rendering services to the
Fund or acting on any business of the Fund (other than services or business in
connection with the Administrator's duties hereunder), to be rendering such
services to or acting solely for the Fund and not as a director, officer,
employee, shareholder or agent of, or one under the control or direction of the
Administrator even though paid by it.
(d) Notwithstanding any other provision of this Agreement, the Fund shall
indemnify and hold harmless the Administrator, its directors, officers,
employees, shareholders and agents frarn and against any and all claims,
demands, expenses and liabilities (whether with or without basis in fact or law)
of any and every nature which the Administrator may sustain or incur or which
may be asserted against the Administrator by any person by reason of, or as a
result of (i) any action taken or Knitted to be taken by the Administrator in
good faith hereunder, (ii) in reliance upon any certificate, instrument, order
or stock certificate or other document reasonably believed by it to be genuine
and to he signed, countersigned or executed by any duly authorized person, upon
the oral instructions or written instructions of an authorized person of the
Fund or upon the opinion of legal counsel for the Fund or its awn counsel; or
(iii) any action taken or omitted to be taken by the Acininistrator in
connection with its appointment in good faith in reliance upon any law, act,
regulat ion or interpretat ion of the same even though the same may thereafter
have been altered, changed, amended or repealed. However, indemnification under
this subparagraph shall not apply to actions or omissions of the A~ninistrator
or its directors, officers, employees, shareholders or agents in cases of its or
their own negligence, willful misconduct, bad faith, or reckless disregard of
its or their own duties hereunder .
(e) The Administrator shall give written notice to the Fund within ten (lo)
business days of receipt by the Administrator of a written assertion or claim of
any threatened or pending legal proceeding which may be subject to this
indemnification. However, the failure to notify the Fund of such written
assertion or claim shall not operate in any manner whatsoever to relieve the
Fund of any liability arising frarn this Section or otherwise.
(f) For any legal proceeding giving rise to this indemnification, the Fund
shall be entitled to defend or prosecute any claim in the name of the
Administrator at its awn expense and through counsel of its own choosing if it
gives written notice to the Administrator within ten (lo) business days of
receiving notice of such claim. Notwithstanding the foregoing, the Administrator
may participate in the litigation at its own expense through counsel of its own
choosing. If the Fund does choose to defend or prosecute such claim, then the
parties shall cooperate in the defense or prosecution thereof and shall furnish
such records and other information as are reasonably necessary.
<PAGE>
(g) The terms of Paragraph 8 shal] survive the termination of this
Agreement.
9. Notices
All notices, requests, consents and other communications pursuant to this
Agreement shall be in writing and shall be deemed to have been given when sent
by registered or certified mail, return receipt requested, or by personal
delivery.
(a) Notice to Administrator shall be directed to the following address:
Fund/Plan Services, Inc.
2 Elm Street
Conshohocken, Pennsylvania 19428
Attention: John D. Diederich, President
(b) Notices to Fund shall be directed to the following address:
Stratton Growth Fund, Inc.
Plymouth Meeting Executive Campus
610 W. Germantown Pike, Suite 361
Plymouth Fleeting, PA 19462
Attention: John A. Affleck, President
10. Invalidity
Any provision of this Agreement which may be determined by competent
authority to be prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11. Section Headings
Section and Paragraph headings are for convenience only and shall not be
construed as part of this Agreement.
12. Entire Agreement
This Agreement constitutes the entire Agreement of the parties hereto, and
supersedes any and all prior agreements, arrangements and understandings
relating to such services.
<PAGE>
13. Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original agreement but such counterparts shall together
constitute but one and the same instrument.
IN WITNESS I, the part ies hereto have caused the foregoing instrument to
be executed by their duly authorized officers and their seals to be hereunto
affixed, all as of the day and year first above written.
STRATTON GROWTH FUND
By /s/ James W. Stratton
Title: Chairman
(SEAL)
Attest: /s/ Patricia L. Sloan
FUND/PLAN SERVICES, Inc.
By /s/ John Deiderich
Title: President
(SEAL)
Attest /s/ J.K. Curtin
<PAGE>
APPENDIX A
FUND/PLAN SERVICES, INC.
FUND ADMINISTRATION RESPONSIBILITIES
REGULATORY COMPLIANCE
SEC
N-1A, and all Post-Effective Amendments thereto
N-SAR
24f-2
proxy, when necessary
fidelity bond, preparation, review and filing
under 17g-1
filing shareholder reports under 30b2-1
BLUE SKY
registration shares (initial/renewal)
" as issuer/dealer and renewals
" of agent and renewals interim filing of all shareholder reports
and pertinent SEC filings
CORPORATE BUSINESS
Maintain Blue Sky Calendar
Respond to all services/listing questionnaires
Update and maintain IRA Keogh/403b7 material
<PAGE>
APPENDIX B
FEES
The Fund shall pay Fund/Plan Services, Inc. $20,000 annually, payable in equal
monthly installments, to be debited to the Fund's custody account on the first
business day of each month, plus out of pocket expenses incurred by the
Administrator in the performance of its services.
<PAGE>
Exhibit 9(b)
ADMINISTRATION AGREEMENT
This Agreement, dated as of the 27 th day September , 1985, made by and between
Stratton Growth Fund, Inc., Inc. (the "Fund"), a corporation operating Ma an
open-era Investment company, duly organized and existing under the laws of the
State of Maryland and Fund/Plan Services, Inc. ("Fund/Plan"), a corporation duly
organized and existing under the laws of the Commonwealth of Pennsylvania.
WITNESSETH THAT:
WHEREAS, Fund/Plan has agreed to act as Transfer Agent of the Fund, as its
Dividend Disbursing Agent, and as Administrator of the Plans of the Fund, and
Fund/Plan also has agreed to act for the Fund in other respects as thereafter
stated.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto, intending to be legally bound, do Hereby
agree as follows
THE TRANSFER AGENCY
Section 1. The Fund hereby appoints Fund/Plan as its Transfer Agent, and
Fund/Plan accepts such appointment and agrees to act in such capacity upon the
terms set forth in this Agreement.
Section 2. The Fund shall furnish to Fund/Plan as Transfer Agent a sufficient
supply or blank Share Certificates and trod time to time will renew such supply
upon the request of Fund/Plan. Such blank snare Certificates shall be signed
manually or by facsimile signatures of officers of the Fund authorized by law or
the by-laws at the Fund to sign Share Certificates and, lt required, shall boar
the corporate seal or facsimile thereof.
Page 1 of 16
<PAGE>
Section 3. Fund/Plan, as Transfer Agent, shall make original issues of Shares
in accordance with Sections 4 and 5 below and with the Fund's Prospectus upon
the written request of the Fund and upon being furnished with (i) a certified
copy of a resolution or resolutions of the Board of Directors of the Fund
authorizing such issue (ii) an opinion of counsel as to the validity of such
additional Shares and (iii) necessary funds for the payment of any original
issue tax applicable to such additional Shares
Section 4. Prior to the dally determination of net asset value in accordance
with the Fund's Prospectus, Fund/Plan shall process all purchases~e orders
received since the last date ruination of the Fund 'a net asset value. Fund/Plan
shall calculate dally the amount available for investment in Shares at the not
asset value determined by the Fund as of the close of trading on the New York
Stock Exchange, the number of Shares and fractional Shares to be purchased and
the net asset value to be deposited with the Custodian. Fund/Plan, as agent for
the Shareholders and Plan holders, shall place a purchase order dally with the
Fund for the proper number of Shares and fractional Shares to be purchased and
confirm such number to the Fund in writing.
Section 5. Fund/Plan having made the calculations provided for in Section 4,
shall thereupon pay over the net asset value of Shares purchased to the
Custodian. She net asset value shall then bo deposited in the account maintained
under the Custodian Agreement. She proper number of Shares and fractional Shares
shall then be issued dally and credited by Fund/Plan to the Unissued Certificate
Account. She Shares and fractional Shares purchased for each Shareholder and
Plan holder will be credited by Fund/Plan to his separate account. Fund/Plan
shall mall to each Shareholder and
Page 2 of 16
<PAGE>
Plan holder a confirmation of each purchase, with copies to the Fund if
requested. Such confirmations will show the prior Share balance, the new Share
balance, the Shares held under a Plan (if any), the Shares of which Stock
Certificates are outstanding (if any), the amount invested and the price paid
for the newly purchased Shares.
Section 6. Transfer of Shares shall be registered and new Share Certificates
issued by Fund/Plan upon surrender of outstanding Share Certificates (i) in form
deemed by Fund/Plan to be properly endorsed for transfer, (ii) with all
necessary endorsers' signatures guaranteed in such manner and form as Fund/Plan
may require by a guarantor reasonably believed by Fund/Plan to be responsible,
accompanied by (iii) such assurances as Fund/Plan shall deem necessary or
appropriate to evidence the genuineness and effectiveness of each necessary
endorsement, and (iv) satisfactory evidence of compliance with all applicable
laws relating to the payment or collection of taxes.
Section 7. When mall is used for delivery of Share Certificates Fund/Plan
shall forward Share Certificates in "non-negotiable" form by first-class mail,
and Share Certificates in "negotiable" form by registered mail, all mail
deliveries to be covered while in transit to the addressee by insurance arranged
for by Fund/Plan.
Section 8. In registering transfers Fund/Plan as Transfer Agent may rely upon
the Uniform Commercial Code or any other statutes which in the opinion of
counsel protect Fund/Plan and the Fund in not requiring complete documentation,
in registering transfer without inquiry into adverse claims, in delaying
registration for purposes of such inquiry, or in refusing registration where in
its judgment an adverse claim requires such refusal.
Page 3 of 16
<PAGE>
Section 9. Fund/Plan as Transfer Agent may issue new Share Certificates in
place of Share Certificates represented to have been lost, destroyed or stolen,
upon receiving indemnity satisfactory to Fund/Plan and may issue new Share
Certificates in exchange for, and upon surrender of mutilated Share
Certificates.
Section 10. In case any officer of the Food who shall have signed manually or
whose facsimile signature shall have been affixed to blank Share Certificates
shall die, resign or be removed prior to the issuance of such Share
Certificates, Fund/Plan as Transfer Agent may issue or register such Share
Certificates as the Share Certificates of the Fund notwithstanding such death,
resignation or removal; and the Fund shall file promptly with Fund/Plan such
approval, adoption or ratification as may be required by law.
Section 11. Fund/Plan will maintain stock registry records in the usual fore
in which it will note the issuance, transfer and redemption of Shares and the
issuance and transfer of share Certificates, and is also authorized to maintain
an account entitled Unissued Certificate Account in which it will record the
Shares and fractions issued and outstanding from time to time for which issuance
of Share Certificates is deferred. Fund/Plan is authorized to keep records,
which will be part of the stock transfer records, as well as its records of the
Plans, in which it will note the names and registered addresses of Shareholders
and Plan holder~, and the number of Shares and fractions from time to time owned
by them for which no Share Certificates are outstanding. Each Shareholder or
Plan holder will be assigned a single account number even though Shares held
under each Plan and Shares for which Certificates have been issued will be
accounted for separately.
Page 4 of 16
<PAGE>
Section 12. Fund/Plan will issue Share Certificates for Shares of the Fund,
only upon receipt of a written request from a Shareholder. In all other cases,
the Fund authorizes Fund/Plan to dispense with the issuance and countersignature
of Share Certificates whenever Shares are purchased. In such case Fund/Plan, as
Transfer Agent, shall merely note on its stock registry records the issuance of
the Shares and fractions (if any), shall credit the Unissued Certificate Account
with the Shares and fractions issued and shall credit the proper number of
Shares and fractions to the respective Shareholders. Likewise, whenever
Fund/Plan has occasion to surrender for redemption Shares and fractions owned by
Shareholders, it shall be unnecessary to issue Share Certificates for redemption
purposes. The Fund authorizes Fund/Plan in such cases to process the
transactions by appropriate entries in its stock transfer records, and debiting
of the Unissued Certificate Account and the record of issued Shares outstanding.
Section 13. Fund/Plan in its capacity as Transfer Agent will, in addition to
the duties and functions above-mentioned, perform the usual duties and functions
of a stock Transfer Agent for a corporation. It will countersign for issuance or
reissuance Share Certificates representing original issue or reissued treasury
shares as directed by the Written Instructions of the Fund, and will transfer
Share Certificates registered in the name of Shareholders from one Shareholder
to another in the usual manner. Fund/Plan may rely conclusively and act without
further investigation upon any list, instruction, certification, authorization,
Share Certificate or other instrument or paper believed by it in good faith and
without negligence to be genuine and unaltered, and to have been signed,
countersigned, or executed by duly authorized person or persons, or upon the
instructions of any officer of the Fund, or upon the advice of counsel for the
Fund or for Fund/Plan. Fund/Plan may record any transfer of Share
Page 5 of 16
<PAGE>
Certificates which is believed by it in good faith and without negligence to
have been duly authorized or may refuse to record any transfer of Share
Certificates if in good faith and without negligence Fund/Plan in its capacity
as Transfer Agent deems such refusal necessary in order to avoid any liability
either to the Fund or to Fund/Plan. The Fund agrees to indemnify and hold
harmless Fund/Plan from and against Any and all losses, costs, claims, and
liability which it may suffer or incur by Lesson of so relying at acting or
refusing to act.
Section 14. In ease of any request or demand for the inspection of the share
records of the Fund, Fund/Plan, as Transfer Agent, shall endeavor to notify the
Fund and to secure instructions as to permitting or refusing such inspection.
However, Fund/Plan may exhibit such records to any person in any case where it
is advised by its counsel that it may be held liable for failure so to do.
THE DIVIDEND DISBURSEMENT AGENCY
Section 15. Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of the Fund, the Fund shall notify
Fund/Plan of the date of such declaration, the amount payable per share, the
record date for determining the Shareholders entitled to payment, the payment
and the reinvestment date price.
Section 16. On or before each payment date the Fund will transfer, or cause
the Custodian to transfer, to Fund/Plan in its capacity as Dividend Disbursing
Agent, the total amount of the dividend or distribution currently payable and
Fund/Plan in such capacity will on the designated payment date mail distribution
checks to the Shareholders for the proper amounts payable to them except as
follows:
Page 6 of 16
<PAGE>
(a) Dividends and capital gains distributions directed to be
reinvested under Plans will be transferred to Fund/Plan in its capacity as
Administrator for application as provided in Section 21.
Section 17. Fund/Plan shall, prior to the daily determination of net asset
value in accordance with the Fund's Prospectus, process all requests from
Shareholders to redeem Shares and determine the number of Shares requited to be
redeemed to make monthly payments, automatic payments or the like. Thereupon,
Fund/Plan shall advise the Fund of the total number of Shares available for
redemption and the number of Shares and fractional Shares requested to be
redeemed. The Fund shall then quote to Fund/Plan the applicable net asset value,
whereupon Fund/Plan shall furnish the Fund with an appropriate confirmation of
the redemption and process the redemption by filing with the Custodian an
appropriate statement and making the proper distribution and application of the
redemption processed in accordance with the Fund's Prospectus. The stock
registry books recording outstanding Shares, the Unissued Certificate Account
and the individual account of the Shareholder or Plan holder shall be properly
debited.
Section 18. The proceeds of redemption shall be remitted by Fund/Plan in
accordance with the Fund's Prospectus by check mailed to the Shareholder or Plan
holder at his registered address. If stock certificates have been issued for
Shares being redeemed, then such certificates and a stack power with a signature
guarantee of a commercial bank or trust company or a member firm of a recognized
securities exchange shall accompany the redemption request. If certificates have
not been issued to the redeeming shareholder, the signature of the shareholder
on the redemption request must be similarly guaranteed. The Fund may authorize
Fund/Plan to waive the signature guarantee in certain cases by written
Instructions.
Page 7 of 16
<PAGE>
ADMINISTRATION OF THE PLANS
Section 19. The Fund hereby appoints Fund/Plan as Administrator of the Plans,
and Fund/Plan accepts such appointment and agrees to act in such capacity upon
the terms set forth in this Agreement. As provided in Section 11, Fund/Plan will
maintain records, which will be part of the stock registry records as well as
its records of the administration of the Plans, in which it will note the
transactions effected for the respective Plan holders and the number of Shares
and fractions from time to time owned by them for which no Share Certificates
are outstanding.
Section 20. It will be the practice of Fund/Plan, upon receipt of the
applicable net asset value per share, to process payments by Plan holders
resolved in acceptable form until the time of the closing of the New York Stock
Exchange on each day on which said exchange is open since the same time on the
prior business day in which said exchange we open. Fund/Plan will proceed to
calculate the amount available for investment in Shares at the net asset value
determined as of the close of the New York Stock Exchange that day and the
number of Shares and fractions to be purchased. Fund/Plan, as agent for sundry
Plan holders, will place an order with the Fund for the proper number of Shares
and fractions. The proper number of Shares and fractions will then be issued and
credited to the Unissued Certificate Account, and the Shares and fractions
purchased for each Plan holder will be credited to his separate account.
Fund/Plan will thereupon mail to each Plan holder a confirmation of the purchase
with copies to the Fund. Such confirmations will show the prior and new share
balance, the Shares held under the Plans and Sharon (if any) for which Stock
Certificates are outstanding, the amount invested, the price paid and other
data.
Page 8 of 16
<PAGE>
Section 21. As and when the Fund declares dividends or capital gains
distributions, it will promptly quote to Fund/Plan the net asset value per share
at the close of business on the record date, whereupon as soon as it can
calculate the total of such dividends or distributions it will receive for
reinvestment, Fund/Plan will advise the Fund of the amount which will be
available for reinvestment on the payment date and the number of Shares and
fractions to be issued. Upon receipt of the amount of the dividends or
distributions to be reinvested under Plans, Fund/Plan will pay over such amount
to the Custodian for deposit in the Fund's principal account, whereupon the
Shares and fractions purchased for the Plans will be issued and will be credited
to the Unissued Certificate Account. Fund/Plan will credit the Shares and
fractions so purchased to the separate accounts maintained for the respective
Plan holders, and will promptly mail to each Plan holder a confirmation of the
purchase, with a copy to the Fund, showing the prior and new share balance.
Section 22. Whenever a Shareholder shall deposit Shares represented by Share
Certificates in an investment plan or systematic withdrawal plan or other plan
permitting deposit of Shares thereunder, Fund/Plan as Transfer Agent is
authorized upon receipt of Share Certificates registered in the name of the
Shareholder, or if not so registered in due time for transfer, to cancel such
Share Certificates, to debit the individual stock accounts and to credit the
Shares to the Unissued Certificate Account. Fund/Plan as Administrator of Plans
will credit the Shares so deposited to the proper plan accounts. In the event
that a Plan holder shall desire to deposit under a systematic withdrawal plan
Shared held in an investment plan or other like plan, Fund/Plan will accomplish
such deposit by proper debiting and crediting of plan accounts.
Page 9 of 16
<PAGE>
Section 23. Whenever Fund/Plan shall have received requests
from Plan holders to redeem Shares and remit proceeds, or whenever Fund/Plan is
required to redeem Shares to make withdrawal payments under systematic
withdrawal plans or the like, Fund/Plan will advise the Fund that it has Shares
for redemption, stating the number of Shares and fractions to be redeemed and
will furnish the Fund with an appropriate confirmation of the redemption. The
Custodian shall be authorized to pay over to Fund/Plan as Administrator the
total redemption price for proper distribution and application. She stock
registry books recording outstanding Shares, the Unissued Certificate Account
and the individual accounts of the Shareholders shall be properly debited.
In lieu of redemption Fund/Plan is authorized at the request of the Fund to sell
Shares to it for treasury stock, provided that in each such case the sale price
shall be not less than the applicable redemption price above mentioned. In such
cases the procedure shall be appropriately modified.
Section 24. The practices and procedures of Fund/Plan and the Fund above
outlined in Sections 19 to 23, inclusive, may be altered or modified from time
to time as may be mutually agreed by the parties to this Agreement, so long as
the intent and purposes of the Plans, as stated from time to time in the
prospectus of the Fund, are observed, For special cases the parties hereto may
adopt such procedures as may be appropriate or practical under the
circumstances, and Fund/Plan may conclusively assume that any special procedure
which has been approved by the Fund, coos not conflict with or violate any
requirements of its Articles of Incorporation, By-Laws or prospectus, or any
rule, regulation or requirement of any regulatory body.
Page 10 of 16
<PAGE>
MISCELLANEOUS
Section 25. Fund/Plan agrees to make available upon request and to preserve
for the periods prescribed In Rule 31a-2 any records relating to services
provided under this Agreement which are required to be maintained by Rule 31a-1.
Section 26. The Fund shall indemnify Fund/Plan and save it harmless from
any and against any and all Actions, suits and claims, whether groundless or
otherwise, arising directly or indirectly out of or in connection with its
performance under this Agreement as Transfer Agent, Dividend Disbursing Agent
and Administrator of Plans and from and against any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liabilities incurred by
Fund/Plan in connection with any such action, suit, or claim. Fund/Plan shall
not be under any obligation to prosecute or to defend any action, suit or claim
arising out of or in connection with its performance under this Agreement as
Transfer Agent, Dividend Disbursing Agent and Administrator of Plans, which, n
the opinion of its counsel, may Involve it in expense or liability, and the Fund
shall, so often as reasonably requested, furnish Fund/Plan with satisfactory
indemnity against such expense or liability, and upon request of Fund/Plan the
Fund shall assume the entire defense of any action, Salt, or claim subject to
the foregoing Indemnity. Provided, however, that Fund/Plan shall give the Fund
notice, and reasonable opportunity to defend, any such action, suit, or claim,
in the name of the Fund or Fund/Plan or both.
Without limitation of the foregoing:
(a) Fund/Plan may rely upon the advice of the Fund, or of counsel, who
may be counsel for the Fund or counsel for Fund/Plan and upon statements of
accountants, brokers and other persons believed by it in good faith to be expert
in the matters upon which they are consulted and for any actions taken in good
faith upon such statements, Fund/Plan shall not be liable to anyone.
Page 11 of 16
<PAGE>
(b) Fund/Plan shall not be liable for any action taken in good faith
reliance upon any Written Instruction or certified copy of any resolution of the
Board of Directors of the Fund, and Fund/Plan may rely upon the genuineness of
any such document or copy thereof believed in good faith by the Custodian to
have been validly executed.
(c) Fund/Plan may rely and shall be protected in acting upon any
signature, instruction, request, letter' of transmittal, certificate, opinion of
counsel, statement, instrument, report, notice, consent, order, or other paper
or document believed by it to be genuine and to have been signed or presented by
tho purchaser, Fund or other proper party or parties.
Notwithstanding any statement to the contrary elsewhere in this
Agreement, Fund/Plan shall be liable for its negligent acts or omissions in
connection with the performance of its duties under this Agreement.
Section 27. A request to redeem Shares must be accompanied by a
Signature guaranteed by a commercial bank or a member firm of a recognized stock
exchange.
Fund/Plan is authorized, upon receipt of written Instructions from the
Fund, to make payment upon redemption of Shares without a signature guarantee.
The Fund hereby agrees to indemnify and hold Fund/Plan, its successors and
assigns, harmless of and from any and all expenses, damages, claims, suits,
liabilities, actions, demand losses whatsoever arising out of or in connection
with a non-negligent payment by Fund/Plan upon redemption of Shares without a
signature guarantee and upon the request of Fund/Plan, the Fund shall assume the
entire defense of any action, suit or claims subject to the foregoing indemnity.
Fund/Plan shall notify the Fund of any such action, suit or claim within 30 days
after receipt by Fund/Plan of notice thereof.
Page 12 of 16
<PAGE>
Section 28. Fund/Plan in acting for Plan holders, or in any other capacity
set forth in this Agreement, shall not be personally liable for any taxes,
assessments, or governmental charge. which may be levied or assessed on any
bests whatsoever in connection with the administration of the Plans, excepting
only for taxes assessed against it in its corporate capacity arising out of its
compensation hereunder.
Section 29. In addition to the services as Transfer Agent, Dividend
Disbursing Agent and Administrator as above set forth, Fund/Plan will perform
other services for the Fund as agreed from time to time, including but not
limited to, preparation of and mailing Federal lO99 Fores, mailing semi-annual
reports of the Fund, preparation of one annual list of Shareholders, and mailing
notices of Shareholders' meetings, proxies and proxy statements.
Section 30. The Fund agrees to pay Fund/Plan compensation for its services
and to reimburse it for expenses, as set forth in Schedule A attached hereto, or
as shall be set forth in amendments to such Schedule approved by the Fund and
Fund/Plan.
Section 31. Nothing contained in this Agreement is intended to or shall
require Fund/Plan, in any capacity hereunder, to perform any functions or duties
on any holiday, day of special observance or any other day on which Fund/Plan or
the New York Stock Exchange are closed. Functions or duties normally scheduled
to be performed on such days shall be performed on, and as of, the next business
day on which both the New York Stock Exchange and Fund/Plan are open.
Section 32. The following terms as used in this Agreement shall have the
meaning set forth below unless the context otherwise requires:
Page 13 of 16
<PAGE>
Custodian Agreement: The term Custodian Agreement shall mean the
agreement between the Fund and First Pennsylvania Bank N.A.
Custodian: The term Custodian shall mean First Pennsylvania Bank N.A.
in its capacity as custodian under the Custodian Agreement.
Plan: The term Plan shall include such investment plans, dividend
reinvestment plans, systematic$c withdrawal plans or other types of plans, in
fond acceptable to Fund/Plan, which the Fund may from time to time adopt and
make available to its Shareholders, including plans or accounts adopted for
pensions and profit sharing plans established by self-employed individuals or
partnerships.
Plan holder. The term Plan holder shall mean a Shareholder who at the
time of reference is participating in a Plan.
Share Certificates: The term Share Certificates shall mean the stock
certificates for the Shares of the Fund.
Shareholders: The term Shareholders shall mean the registered owners
from time to time of the Shares of the Fund in accordance with the stock
registry records of the Fund.
Shares: The term Shares shall mean the issued and outstanding shares
of common stock of the Fund.
Written Instructions: The term Written Instructions shall mean an
authorized, instruction, approval, item or set of data, or information of any
kind transmitted to Fund/Plan in original writing containing original Signatures
or a copy
Page 14 of 16
<PAGE>
of such document transmitted by telecopy including transmission
of such signature, believed in good faith by Fund/Plan to be the signature of a
person authorized by a resolution of the Board of Directors of the Fund to give
Written Instructions on behalf of the Fund.
Section 33. Either the Fund or Fund/Plan may give 60 days's written
notice to the other of the termination of this Agreement, such terminator to
take effect at tie time specified in the notice.
Section 34. Any notice or other communication required by or permitted
to be given in connection with this Agreement shall be in writing, and shall be
delivered in person or sent by first class mail, postage prepaid, to the
respective parties as follows:
If to the Fund:
Stratton Monthly Dividend Shares, Inc.
Axe Wood, Butler, Skippack Pike
Blue Boll, PA 19442
If to Fund/Plan:
Fund/Plan Services, Inc.
P.O. Box 8070
Philadelphia, PA 19101
Attention: B. Heinel
Section 35. The Fund represents and warrants to Fund/Plan that the
execution and delivery of this Administration Agreement by the undersigned
officers of the Fund has been duly and validly authorized by resolution of tho
Board of Directors of the Fund.
Section 36. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same instrument.
Page 15 of 16
<PAGE>
Section 37. This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement Shall not be assignable by the Fund without the
written consent of Fund/Plan, or by Fund/Plan without the written consent of the
Fund, authorized or approved by a resolution of its Board of Directors.
Section 38. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized officers and their corporate seals hereunto duly
affixed and attested, as of the day and year first above written.
ATTEST STRATTON GROWTH FUND, INC.
(Corporate Seal)
/s/ Sharon A. Dylinski By /s/ John Affleck
Corporate Secretary Title: President
ATTEST FUND/PLAN SERVICES, Inc.
(Corporate Seal)
/s/Jim Hickey By /s/ John E Higgens
Title: Vice President
(SEAL)
Page 16 of 16
<PAGE>
Exhibit 9(c)
AMENDMENT OF THE ADMINISTRATION AGREEMENT
This Amendment of the Administration Agreement, ("Amendment") made this 11th day
of December by and between Stratton Growth Fund, Inc. ("Customer"), and First
Pennsylvania Bank N.A., a national banking association duly organized and
existing under the laws of the United States (the "Bank").
WITNESSETH:
WHEREAS, the parties have previously entered into an Administration
Agreement, (the "Agreement") whereby the Bank is providing the services
enumerated therein to the Customer; and
WHEREAS, pursuant to the Agreement, the Bank has delegated to Fund/Plan
Services, Inc. ("Fund/Plan") a wholly owned subsidiary of First Pennsylvania
Corporation, ("FPC"), the duty to furnish the services provided thereunder; and
WHEREAS, it is contemplated that all of the outstanding shares of voting
stock of Fund/Plan will be sold by FPC to FinDaTex, Inc., a Pennsylvania
Corporation, effective as of the close of business on December 31, 1985 (the
"Effective Date"); and
WHEREAS, the parties intend that Fund/Plan shall continue to provide
services in accordance with the Agreement, as amended hereby; and
NOW THEREFORE, in consideration of the premises and conditions contained
herein, the parties hereto, with intent to be legally bound hereby, agree as
follows:
1. Following the Effective Date, the Customer shall continue to purchase
and receive from Fund/Plan the services provided under the Agreement, in
accordance with the provisions of the Agreement, as amended hereby.
<PAGE>
2. From and after the Effective Date, the Customer agrees to look solely to
Fund/Plan for the performance of all duties and obligations under the Agreement,
and Fund/Plan agrees to perform all duties and obligations in accordance with
the terms and conditions of the Agreement.
3. Any reference to "First Pennsylvania Bank N.A." or the "Bank" in the
Agreement, except where the reference relates to the Bank in its capacity as
Custodian, shall, as of the Effective Date, be deleted from the Agreement, and
the name "Fund/Plan Services, Inc." shall be substituted therefor.
4. The Customer hereby releases, remises and discharges the Bank from any
and all claims, liabilities and causes of action which arise out of the
performance by Fund/Plan of its duties after the Effective Date.
5. In all other respects, the terms and conditions of the Agreement shall
remain in full force and effect between Fund/Plan and the Customer and Fund/Plan
hereby agrees to be bound by the terms and conditions of the Agreement, as
amended by this Amendment.
6. Nothing in this Amendment shall be construed to relieve the Customer of
responsibility for payment of any fees still outstanding after the Effective
Date for services rendered by the Bank prior to the Effective Date. Said fees
shall be payable to and remitted to Fund/Plan Services, Inc.
7. This Amendment of the Agreement of the Customer has been duly and
validly authorized by the parties hereto. Customer shall provide the Bank and
Fund/Plan with copies of a resolution of Customer's Board of Directors approving
or ratifying this Amendment as promptly as possible.
8. This Amendment may be executed and delivered in any number of
counterparts, each of which shall constitute an original but all together only
one Agreement.
Page 2 of 3
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective Presidents or Vice Presidents and their corporate seals hereunto duly
affixed, and attested by their respective Secretaries or Assistant Secretaries,
as of the day and year first above written.
FIRST PENNSYLVANIA BANK N.A.
ATTEST
(Corporate Seal)
/s/ Michelle Buckwatter By: /s/ Edward E Keuter
Corporate Secretary Vice President
ATTEST STRATTON GROWTH FUND, INC.
(Corporate Seal)
/s/ Sharon A. Dylinski By /s/ JOHN A AFFLECK
Corporate Secretary Title: President
ATTEST FUND/PLAN SERVICES, Inc.
(Corporate Seal)
/s/ Michelle Buckwatter By /s/ D.Watts
Title: Vice President
(SEAL)
Page 3 of 3
<PAGE>
Exhibit 9(d)
AMENDMENT OF THE ADMINISTRATION AGREEMENT
DATED 9/27/85
This Amendment of the Administration Agreement ("Amendment") and of the
Amendment of the Amendment of the Administration Agreement ("Amendment"), made
this 24th day of June 1987, by and between STRATTON GROWTH FUND ("Fund"), and
FUND/PLAN SERVICES, INC. ("Fund/Plan"), a wholly owned subsidiary of FinDaTex,
Inc., a Pennsylvania Corporation.
WITNESSETH:
NOW THEREFORE, in consideration of the premises and conditions contained
herein, the parties hereto, with intent to be legally bound hereby agree as
follows:
Fund/Plan is authorized to make payment for redemption of shares upon
receipt of a signature guarantee from a Savings and Loan Institution. The Fund
hereby agrees to indemnify and hold Fund/Plan, its successors and assigns,
harmless of and from any and all expenses, damages, claims, suits, liabilities,
actions, demands and losses whatsoever arising out of or in connection with a
payment by Fund/Plan for redemption of Shares with a signature guarantee
received from a Savings and Loan Institution. Upon the request of Fund/Plan, the
Fund shall assume the entire defense of any action, suit or claims subject to
the foregoing indemnity, except as shall arise due to the gross negligence or
willful misconduct of Fund/Plan. Fund/Plan shall notify the Fund of any such
action, suit or claim within thirty (30) days after receipt by Fund/Plan of
notice thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective Presidents or Vice Presidents and their corporate seals
hereunto duly affixed and attested by their respective Secretaries or Assistant
Secretaries, as of the day and year first above written.
Page 1 of 2
<PAGE>
ATTEST: FUND/PLAN SERVICES, INC.
(Corporate Seal)
/s/ J.K. Curtin /s/ E.F. Heffernan Jr.
- ------------------------- --------------------------------------
Corporate Secretary Title President
ATTEST: STRATTON GROWTH FUND
(Corporate Seal)
/s/ Patricia L Sloan /s/ Nancy E. Kuhn
- ------------------------- --------------------------------------
Corporate Secretary Title Vice President
Page 2 of 2
<PAGE>
Exhibit 9(e)
AMENDMENT TO THE ADMINISTRATION AGREEMENT
DATED 5/31/85
This Amendment of the Administration Agreement ("Amendment"), made this 27th day
of February, 1990, by and between STRATTON GROWTH FUND, INC. ("Fund"), and
FUND/PLAN SERVICES, INC. ("Fund/Plan"), a wholly owned subsidiary of FinDaTex,
Inc., a Delaware Corporation.
WITNESSETH:
NOW THEREFORE, in consideration of the premises and conditions contained herein,
the parties hereto, with intent to be legally bound hereby agree as follows:
The name of this agreement is changed to SHAREHOLDERS SERVICES AGREEMENT
effective immediately. This identity change more readily relates to the work
being performed under the transfer agent function.
The use of the term Administration and/or Administrator of the Plans as may
appear or be implied in Sections 19 through 23 of the Agreement is also amended
so as to refer to the Transfer Agent as "Agent" of the various Plans offered by
the Fund.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
respective Presidents or Vice Presidents and their corporate seals hereunto duly
affixed and attested by their respective Secretaries or Assistant Secretaries,
as of the day and year first above written.
Page 1 of 2
<PAGE>
STRATTON GROWTH FUND, INC.
By /s/John A. Affleck
Title: President
(SEAL)
Attest: /s/ Patricia L. Sloan
FUND/PLAN SERVICES, Inc.
By /s/ John Deiderich
Title: President
(SEAL)
Attest /s/ J.K. Curtin
Page 2 of 2
<PAGE>
Exhibit 9(f)
AMENDMENT OF THE SHAREHOLDER SERVICES AGREEMENT
DATED 9/27/85
This Amendment of the Shareholder Services Agreement (formerly known as the
Administration Agreement, hereinafter ("Amendment") and the Amendment of the
Amendment of the Administration Agreement ("Amendment"), made this 24th day of
September, 1991, by and between STRATTON GROWTH FUND, INC. ("Fund"), and
FUND/PLAN"), a wholly owned subsidiary of FinDaTex, Inc., a Pennsylvania
Corporation.
WITNESSETH;
NOW THEREFORE, in consideration of the premises and conditions contained
herein, the parties hereto, with intent to be legally bound hereby agree as
follows:
Fund/Plan is authorized to make payment upon redemption of unissued shares
without a signature guarantee only where the following conditions exist:
1) Payee of the check is the same as the shareholder registration as
contained in the Transfer Agent's records; and
2) The mailing address for the check is the same planholder's address
as contained in the Transfer Agent's records; and
3) The redemption amount does not exceed $4,999.99.
The Fund hereby agrees to indemnify and hold Fund/Plan, its successors and
assigns, harmless of and from any and all expenses, damages, claims, suits,
liabilities, actions, demands, and losses whatsoever arising out of or in
connection with a payment by Fund/Plan upon redemption of Shares without a
signature guarantee provided that the preceding three conditions are met. Upon
the request of Fund/Plan, the Fund shall assume the entire defense of any
action, suit or claims subject to the foregoing indemnity, except as shall arise
due to the gross negligence or willful misconduct of Fund/Plan. Fund/Plan shall
notify the Fund of any
Page 1 of 2
<PAGE>
such action, suit or claim within thirty (30) days after receipt by Fund/Plan of
notice thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective Presidents or Vice Presidents and their corporate seals
hereunto duly affixed and attested by their respective Secretaries or Assistant
Secretaries, as of the day and year first above written.
ATTEST: FUND/PLAN SERVICES, INC.
(Corporate Seal)
- ---------------------- -------------------------
James K. Curtin John D. Diederich
Secretary President
ATTEST: STRATTON GROWTH FUND, INC.
(Corporate Seal)
- ---------------------- --------------------------
Patricia L. Sloan John A. Affleck
Secretary President
Page 2 of 2
<PAGE>
Exhibit 9(g)
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT, dated as of the 1st day of June, 1988 made by and between
Stratton Growth Fund, Inc. (the "Fund") a corporation operating as an open-end
management investment company, duly organized and existing under the laws of the
State of Maryland, and Fund/Plan Services, Inc. (the "Company") a corporation
duly organized and existing under the laws of the State of Delaware.
WITNESSETH THAT:
WHEREAS, the Fund desires to appoint the Company as its Accounting Services
Agent to maintain and keep current the books, accounts, records, journals or
other records of original entry relating to the business of the ("Fund") as set
forth in Section 2 of this Agreement (the "Accounts and Records") and to perform
certain other functions in connection with such accounts and records; and
WHEREAS, the Company is willing to perform such functions upon the terms and
conditions set forth below; and
WHEREAS, the Fund will cause to be provided certain information to the Company
as set forth below; and
WHEREAS, the Company shall perform the duties of transfer agent, and dividend
disbursing agent pursuant to a separate agreement ("Shareholder Services
Agreement").
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto, intending to be legally bound, do hereby agree as
follows:
Section 1. The Fund shall promptly turn over to the Company such of the Accounts
and Records previously maintained by or for it as are necessary
PAGE - 1 of 10
<PAGE>
for the Company to perform its functions under this Agreement. The Fund
authorizes the Company to rely on such Accounts and Records turned over to it
and hereby indemnifies and holds the Company, its successors and assigns,
harmless of and from any and ale expenses, damages, claims, suits, liabilities,
actions, demands and losses whatsoever arising out of or in connection with any
error, omission, inaccuracy or other deficiency of such Accounts and Records or
in the failure of the Fund to provide any portion of such or to provide any
information needed by the Company to knowledgeably perform its functions.
Section 2. To the extent it receives the necessary information from the
Fund or its agents by Written or Oral Instructions, the Company shall maintain
and keep current the following Accounts and Records relating to the business of
the Fund, in such form as may be mutually agreed to between the Fund and the
Company:
(a) Cash Receipts Journal
(b) Cash Disbursements Journal
(c) Dividends Paid Record
(d) Purchase and Sales Journals - Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledgers
(g) Broker Ledger
(h) General Ledger
(i) Daily Expense Accruals
(j) Daily Interest Accruals
(k) Securities and Monies borrowed or loaned and
collateral therefore
(l) Daily Trial Balance
(m) Investment Income Journal
Unless necessary information to perform the above functions is furnished by
Written or Oral Instructions to the Company daily prior to 4:00 PM Eastern time
(the close of trading on the New York Stock Exchange) and the calculation of the
Fund's net asset value, as provided below, the Company
PAGE - 2 of 10
<PAGE>
shall incur no liability, and the Fund shall indemnify and hold harmless the
Company from and against any liability arising from any failure to provide
complete information or from any discrepancy between the information received by
the Company and used in such calculations and any subsequent information
received from the Fund or any of its designated Agents.
Section 3. The Company shall perform the ministerial calculations necessary
to calculate the Fund's net asset value daily, in accordance with the Fund's
current prospectus and utilizing the information described in this Section.
Portfolio items for which market quotations are available by the Company's use
of an automated financial information ("Service") shall be based on the closing
prices of such Service except where the Fund has given or caused to be given
specific Written or Oral Instructions to utilize a different value. All of the
portfolio securities shall be given such values as the Fund provides by Written
or Oral Instructions including all foreign securities, restricted securities and
other securities requiring valuation not readily ascertainable solely by such
Service. The Company shall have no responsibility or liability for the accuracy
of prices quoted by such Services; for the accuracy of the information supplied
by the Fund; or for any loss, liability, damage, or cost arising out of any
inaccuracy of such data. The Company shall have no responsibility or duty to
include information or valuations to be provided by the Fund in any computation
unless and until it is timely supplied to the Company in usable form. Unless the
necessary information to calculate the net asset value daily is furnished by
Written or Oral Instructions from the Fund, the Company shall incur no
liability, and the Fund shall indemnify and hold harmless the Company from and
against any liability arising from any failure to provide complete information
or from any discrepancy between the information received by the Company and used
in such calculation and any subsequent information received from the Fund or any
of its designated agents.
Section 4. For all purposes under this Agreement, the Company is authorized
to act upon receipt of the first of any Written or Oral Instruction it receives
from the Fund or its agents on behalf of the Fund. In cases where the first
instruction is an Oral Instruction that is not in the form of a
PAGE - 3 of 10
<PAGE>
document or written record, a confirmatory Written Instruction or Oral
Instruction in the form of a document or written record shall be delivered, and
in cases where the Company receives an Instruction, whether Written or Oral, to
enter a portfolio transaction on the records, the Fund shall cause the Broker-
Dealer to send a written confirmation to the Company. The Company shall be
entitled to rely-on the first Instruction received, and for any act or omission
undertaken in compliance therewith shall be free of liability and fully
indemnified and held harmless by the Fund, provided however, that in the event a
Written or Oral Instruction received by the Company is countermanded by a timely
later Written or Oral Instruction received by the Company prior to acting upon
such countermanded Instruction, the Company shall act upon such later Written or
Oral Instruction. The sole obligation of the Company with respect to any follow-
up or confirmatory Written Instruction, Oral Instruction in documentary or
written form, or Broker-Dealer written confirmation shall be to make reasonable
efforts to detect any discrepancy between the original Instruction and such
confirmation and to report such discrepancy to the Fund. The Fund shall be
responsible, at the Fund's expense, for taking any action, including any
reprocessing, necessary to correct any discrepancy or error, and to the extent
such action requires the Company to act the Fund shall give the Company specific
Written Instruction as to the action required.
Section 5. At the end of each month, the Fund shall cause the Custodian to
forward to the Company a monthly statement of cash and portfolio transactions
and a list of assets, which will be reconciled with the Company's Accounts and
Records maintained for the Fund. The Company will report any discrepancies to
the Custodian, and report any unreconciled items to the Fund.
Section 6. The Company shall promptly supply daily and periodic reports of
the Fund as requested by the Fund and agreed upon by the Company.
Section 7. The Fund shall and shall require each of its agents (including
without limitation its Transfer Agent and its Custodian) to provide the company
as of the close of each Business Day, or on such other schedule as the Fund
determines is necessary, with Written or Oral Instructions (to be delivered to
the Company by 10:00 AM the next following business day)
PAGE - 4 of 10
<PAGE>
containing all data and information necessary for the Company to maintain the
Fund's Accounts and Records and the Company may conclusively assume that the
information it receives by Written or Oral Instructions is complete and
accurate. The Fund is responsible to provide or cause to be provided to the
Company reports of share purchases, redemptions, and total shares outstanding on
the next business day after each net asset valuation.
Section 8. The Accounts and Records, in the agreed upon format, maintained
by the Company shall be the property of the Fund, and shall be made available to
the Fund promptly upon request and shall be maintained for the periods
prescribed in Rule 31(a)-2 of the Investment Company Act of 1940, as amended.
The Company shall assist the Fund's independent auditors, or upon approval of
the Fund, or upon demand, any regulatory body, in any requested review of the
Fund's Accounts and Records but shall be reimbursed for all expenses and
employee time invested in any such review of the Fund's Accounts and Records
outside of routine and normal periodic reviews. ~Jpon receipt from the Fund of
the necessary information, the Company shall supply the necessary data for the
Fund or accountant's completion of any necessary tax returns, questionnaires,
periodic reports to shareholders and such other reports and information requests
as the Fund and the Company shall agree upon from time to time.
Section 9. The Company and the Fund may from time to time adopt such
procedures as they agree upon in writing, and the Company may conclusively
assume that any procedure approved by the Fund or directed by the Fund, does not
conflict with or violate any requirements of its Prospectus, Articles of
Incorporation, By-Laws, or any rule or regulation of any regulatory body or
governmental agency. The Fund shall be responsible for notifying the Companv of
any changes in regulations or rules which might necessitate changes in the
Company's procedures, and for working out with the Company such changes.
Section 10. (a) The Company, its directors, officers, emDlovees,
shareholders and agents shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the performance
of this Agreement, except a loss resulting from willful
PAGE - 5 of 10
<PAGE>
misfeasance, bad faith or gross negligence on the part of the Company in the
performance of its obligations and duties under this Agreement.
(b) Any person, even though also a director, officer, employee,
shareholder or agent of the Company, who may be or become an officer, trustee,
employee or agent of the Fund, shall be deemed, when rendering services to the
Fund or acting on any business of the Fund (other than services or business in
connection with the Company's duties hereunder), to be rendering such services
to or acting solely for the Fund and not as a director, officer, employee,
shareholder or agent of, or one under the control or direction of the Company
even though paid by it.
(c) Nothwithstanding any other provision of this Agreement, the Fund
shall indemnify and hold harmless the Company, its directors, officers,
employees, shareholders and agents from and against any and all claims, demands,
expenses and liabilities (whether with or without basis in fact or law) of any
and every nature which the Company may sustain or incur or which may be asserted
against the Company by any person by reason of, or as a result of: (i) any
action taken or omitted to be taken by the Company in good faith hereunder; (ii)
in reliance upon any certificate, instrument, order or stock certificate or
other document reasonably believed by it to be genuine and to be signed,
countersigned or executed by any duly authorized person, upon the Oral
Instructions or Written Instructions of an authorized person of the Fund or upon
the opinion of legal counsel for the Fund or its own counsel; or (iii) any
action taken or omitted to be taken by the Company in connection with its
appointment in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter have been
altered, changed, amended or repealed. However, indemnification under this
subparagraph shall not apply to actions or omissions of the Company or its
directors, officers, employees, shareholders or agents in cases of its or their
own negligence, willful misconduct, bad faith, or reckless disregard of its or
their own duties hereunder.
(d) The Company shall give written notice to the Fund within twenty
(20) business days of receipt by the Company of a written
PAGE - 6 of 10
<PAGE>
assertion or claim of any threatened or pending legal proceeding which may be
subject to this indemnification. However, the failure to notify the Fund of such
written assertion or claim shall not operate in any manner whatsoever to relieve
the Fund of any liability arising from this Section or otherwise.
(e) For any legal proceeding giving rise to this indemnification, the
Fund shall be entitled to defend or prosecute any claim in the name of the
Company at it own expense and through counsel of its own choosing if it gives
written notice to the Company within twenty (20) business days of receiving
notice of such claim. Nothwithstanding the foregoing, the Company may
participate in the litigation at its own expense through counsel of its own
choosing. If the Fund does choose to defend or prosecute such claim, then the
parties shall cooperate in the defense or prosecution thereof and shall furnish
such records and other information as are reasonably necessary.
(f) The Fund shall not settle any claim without the Company's express
written consent which shall not be unreasonably withheld. The Company shall not
settle any claim without the Fund's express written consent which shall not be
unreasonably withheld.
Section 11. All financial data provided to, processed by, and reported by
the Company under this Agreement shall be stated in United States dollars or
currency. The Company shall have no obligation to convert to, equate, or deal in
foreign currencies or values, and expressly assumes no liability for any
currency conversion or equation computations relating to the affairs of the
Fund.
Section 12. The Fund agrees to pay Company, within 15 days from the
execution date of this Agreement, an amount equal to reasonable costs and
expenses (including counsel fees), incurred by the Company in connection with
the transfer of the services subject to this Agreement to the Company from the
Fund.
PAGE - 7 of 10
<PAGE>
Section 13. The Fund agrees to pay company compensation for its services
and to reimburse it for expenses, as set forth in Schedule A attached hereto, or
as shall be set forth in amendments to such Schedule approved bv the Fund and
Company. The Fund authorizes the Company to debit the Fund's custody account for
invoices which are rendered for the services performed for the accounting agent
function. The invoices for the service will-be sent to the Fund after the
debiting with the indication that payment has been made.
Section 14. Nothing contained in this Agreement is intended to or shall
require the Company, in any capacity hereunder, to perform any functions or
duties on any holiday, day of special observance or any other day on which the
Custodian or the New York Stock Exchange is closed. Functions or duties normally
scheduled to be performed on such days shall be performed on, and as of, the
next succeeding business day on which both the New York Stock Exchange and the
Custodian are open. Not withstanding the foregoing, the Company shall compute
the net asset value of the Fund on each day required pursuant to Rule 22c-1
promulgated under the Investment Act of 1940.
Section 15. This Agreement may be executed in two or more counterparts,
each of which, when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 16. The terms defined in Section 1 of the Shareholder Services
Agreement shall have the same meanings wherever used in this Agreement.
The Fund shall file with the Company a certified copy of each resolution of its
Board of Directors authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided in Section 1 of the Shareholder
Services Agreement.
Section 17. The Fund or the Company may give written notice to the other of
the termination of this Agreement, such termination to take effect at the time
specified in the notice not less than 1?0 days after the giving of the notice.
Upon the effective termination date, subject to payment to the Company by the
Fund of all amounts due to the Company as of said date, the
PAGE - 8 of 10
<PAGE>
Company shall make available to the Fund or its designated recordkeeping
successor, ale of the records of the Fund maintained under this Agreement then
in the Company's possession.
Section 18. Any notice or other communication required by or permitted to
be given in connection with this Agreement shall be in writing, and shall be
delivered in person or sent by first class mail, Hostage Drepaid to the
respective parties as follows:
If to the Fund:
Stratton Growth Fund
Plymouth Meeting Executive Campus
610 West Germantown Pike, Suite 361
Plymouth Meeting, PA 19462
Attention James W. Stratton, Chairman
If to the Company:
Fund/Plan Services, Inc.
P.0. Box 874
Conshohocken, PA 19428
Attention: John D. Diederich, President
Section 19. This Agreement may be amended from time to time by supplemental
agreement executed by the Fund and the Company.
Section 20. This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their
duly authorized officers and their corporate seals hereunto duly affixed and
attested, as of the day and year first above written.
PAGE - 9 of 10
<PAGE>
STRATTON GROWTH FUND
By /s/ James W. Stratton
Title: Chairman
(SEAL)
Attest: /s/ Sharon A. Drummy
FUND/PLAN SERVICES, Inc.
By /s/ John Deiderich
Title: President
(SEAL)
Attest /s/ J.K. Curtin
PAGE - 10 of 10
<PAGE>
Exhibit 11(a)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated January 13, 1997 accompanying the financial
statements of Stratton Growth Fund, Inc. which are incorporated by reference in
Part B of the Post-Effective Amendment to this Registration Statement and
Prospectus. We consent to the use of the aforementioned report in this
Registration Statement and Prospectus.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
March 10, 1997
<PAGE>
EXHIBIT 14(b)
----------------------------------
INDIVIDUAL
RETIREMENT
ACCOUNT
----------------------------------
DISCLOSURE STATEMENT
CUSTODIAL ACCOUNT
AGREEMENT
----------------------------------
<PAGE>
DISCLOSURE STATEMENT
RIGHT TO REVOKE YOUR IRA
If you receive this Disclosure Statement at the time you establish your IRA, you
have the right to revoke your IRA within seven (7) days of its establishment. If
revoked, you are entitled to a full return of the contribution you made to your
IRA. The amount returned to you would not include an adjustment for such items
as sales commissions, administrative expenses, or fluctuation in market value.
You may make this revocation only by mailing or delivering a written notice to
the Custodian at:
FPS Services, Inc.
3200 Horizon Drive
King of Prussia, PA 19406-0903
If you send your notice by first-class mail, your revocation will be deemed
mailed as of the date of the postmark.
If you have any questions about the procedure for revoking your IRA, please call
the Custodian at the telephone number listed on the Application.
REQUIREMENTS OF AN IRA
A. CASH CONTRIBUTIONS - Your contribution must be in cash, unless it is a
rollover contribution.
B. MAXIMUM CONTRIBUTION - The total amount you may contribute to an IRA for
any taxable year cannot exceed the lesser of $2,000 or 100 percent of your
compensation.
C. NONFORFEITABILITY - Your interest in your IRA is nonforfeitable.
D. ELIGIBLE CUSTODIANS - The Custodian of your IRA must be a bank, savings and
loan association, credit union, or a person approved by the Secretary of
the Treasury.
E. COMMINGLING ASSETS - The assets of your IRA cannot be commingled with other
property except in a common trust fund or common investment fund.
F. LIFE INSURANCE - No portion of your IRA may be invested in life insurance
contracts.
G. COLLECTIBLES - You may not invest the assets of your IRA in collectibles
(within the meaning of Internal Revenue Code (IRC) Section 408(m)). A
collectible is defined as any work of art, rug or antique, metal or gem,
stamp or coin, alcoholic beverage, or any other tangible personal property
specified by the Internal Revenue Service. Specially minted United States
gold and silver bullion coins and certain state-issued coins are
permissible IRA investments.
H. REQUIRED MINIMUM DISTRIBUTIONS - You are required to take minimum
distributions from your IRA at certain times in accordance with Proposed
Treasury Regulations Section 1.408-8. Below is a summary of the IRA
distribution rules.
1. You are required to take a minimum distribution from your IRA for the
year in which you reach age 70 1/2 and for each year thereafter. You
must take your first payout by your required beginning date, April 1
of the year following the year you attain age 70 1/2. The minimum
distribution for any taxable year is equal to the amount obtained by
dividing the account balance at the end of the prior year (less any
required distribution taken between January 1 and April 1 of the year
following the year you attain age 70 1/2) by the joint life expectancy
of you and your designated beneficiary. If you have not
1
<PAGE>
designated a beneficiary for your IRA by your required beginning date,
your single life expectancy will be used.
2. Your single or joint life expectancy is determined by using the IRS
unisex life expectancy tables. You can find these tables in Treasury
Regulation Section 1.72-9.
We may establish a policy dictating whether or not life expectancies
may be recalculated in determining required minimum distributions from
your IRA. Alternatively, we may allow you to elect whether or not to
recalculate your life expectancies.
You may choose (within the limits set forth in the distribution rules
and our life expectancy recalculation policy) how you want your
required minimum distributions structured. You must make your payment
elections no later than April 1 following your 70 1/2 year. If you do
not make an election by that date, we may do any one of the following:
(a) make no payment until you give us a proper payout request,
(b) pay your entire IRA to you in a single sum payment, or
(c) determine your required minimum distribution each year based on
your single life expectancy (not recalculated) and pay those
distributions to you until you direct otherwise.
3. If you name someone other than your spouse as your beneficiary, and
your beneficiary is more than 10 years younger than you, your required
minimum distributions must satisfy the Minimum Distribution Incidental
Benefit (MDIB) rule. The MDIB rule generally requires that your
required minimum distributions be calculated as if your beneficiary
were exactly 10 years younger than you.
4. If you die:
(a) on or after your required beginning date, distributions must be
made to your beneficiary or beneficiaries at least as rapidly as
under the method being used to determine minimum distributions as
of the date of your death.
(b) before your required beginning date, the entire amount remaining
in your account will, at the election of your beneficiary or
beneficiaries, either
(i) be distributed by December 31 of the year containing the
fifth anniversary of your death, or
(ii) be distributed in equal or substantially equal payments over
the life or life expectancy of your designated beneficiary
or beneficiaries.
Your beneficiary or beneficiaries must elect either option (i) or (ii)
by December 31 of the year following the year of your death. If no
election is made, distribution will be made in accordance with (ii) if
the beneficiary is your surviving spouse, and in accordance with (i)
if your beneficiary is not your surviving spouse. In the case of
distributions under (ii), distributions must commence by December 31
of the year following the year of your death. If your spouse is the
beneficiary, distributions need not commence until December 31 of the
year you would have attained age 70 1/2, if later.
2
<PAGE>
INCOME TAX CONSEQUENCES OF ESTABLISHING AN IRA
A. IRA DEDUCTIBILITY - If you have not yet reached the year in which you attain
age 70 1/2 and have earned income from services rendered, you may make an
IRA contribution of the lesser of 100 percent of compensation or $2,000.
However, the amount of the contribution for which you may take a tax
deduction will depend upon whether you (or your spouse) are an active
participant in an employer-maintained retirement plan. If you (and your
spouse) are not an active participant, your IRA contribution will be
totally deductible. If you (or your spouse) are an active participant, the
deductibility of your contribution will depend on your adjusted gross
income (AGI) for the tax year for which the contribution was made. AGI is
determined on your tax return (disregarding any deductible IRA
contribution).
DEFINITION OF ACTIVE PARTICIPANT - Generally, you will be an active
participant if you are covered by one or more of the following employer-
maintained retirement plans:
1. a qualified pension, profit sharing, 401(k), or stock bonus plan;
2. a qualified annuity plan of an employer;
3. a simplified employee pension (SEP) plan;
4. a retirement plan established by the Federal government, a State, or a
political subdivision (except certain unfunded deferred compensation
plans under IRC Section 457);
5. a tax sheltered annuity for employees of certain tax-exempt
organizations or public schools;
6. a qualified plan for self-employed individuals (H.R. 10 or Keogh Plan);
and
7. a SIMPLE IRA plan or a SIMPLE 401(k) plan.
If you do not know whether your employer maintains one of these plans or
whether you are an active participant in it, check with your employer and
your tax advisor. Also, the Form W-2 (Wage and Tax Statement) that you
receive at the end of the year from your employer will indicate whether you
are an active participant.
If you are single, your threshold AGI level is $25,000. The threshold level
if you are married and file a joint tax return is $40,000, and if you are
married but file a separate tax return, the threshold level is $0. If your
AGI is less than $10,000 above your threshold level, you will still be able
to make a deductible contribution but it may be limited in amount (but
never less than $200).
The deductible amount of your contribution is determined by taking your
threshold AGI level plus $10,000 (e.g., $50,000 if you are married and
filing jointly, $35,000 if you are single) and subtracting from it your AGI
(determined prior to taking your itemized deductions). Multiply the
resulting number by .2 to give you your personal deduction limit. You must
round up the resulting number to the next highest $10 if the number is not
a multiple of 10.
B. TAX-DEFERRED EARNINGS - The investment earnings of your IRA are not subject
to federal income tax until distributions are made (or, in certain
instances, when distributions are deemed to be made).
C. NONDEDUCTIBLE CONTRIBUTIONS - You may make nondeductible contributions to
your IRA to the extent that deductible contributions are not allowed. The
sum of your deductible and nondeductible IRA contributions cannot exceed
your contribution limit (the lesser of $2,000 or 100 percent of
compensation). You may elect to
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treat deductible IRA contributions as nondeductible contributions.
If you make nondeductible contributions for a particular tax year, you must
report the amount of the nondeductible contribution on your federal income
tax return (using IRS Form 8606).
If you overstate the amount of designated nondeductible contributions for
any taxable year, you are subject to a $100 penalty unless reasonable cause
for the overstatement can be shown. Failure to file any for required by the
IRS to report nondeductible contributions (eg., IRS Form 8606) will result
in a $50 per failure penalty.
D. TAXATION OF DISTRIBUTIONS - The taxation of IRA distributions depends on
whether or not you have ever made nondeductible IRA contributions. If you
have only made deductible contributions, any IRA distribution will be fully
included in income.
If you have ever made nondeductible contributions to any IRA, the following
formula must be used to determine the amount of any IRA distribution
excluded from income:
(Aggregate Nondeductible Contributions)
x (Amount Withdrawn) = Amount Excluded
----------------------
Aggregate IRA Balance From Income
NOTE: Aggregate nondeductible contributions include all nondeductible
contributions made by you through the end of the year of the distribution
(which have not previously been withdrawn and excluded from income). Also
note that aggregate IRA balance includes the total balance of all of your
IRAs as of the end of the year of distribution and any distributions
occurring during the year.
E. ROLLOVERS - Your IRA may be rolled over to an IRA of yours, or may receive
rollover contributions, provided that all of the applicable rollover rules
are followed. Rollover is a term used to describe a tax-free movement of
cash or other property to your IRA from any of your IRAs, or from your
employer's Qualified Retirement Plan or Tax Sheltered Annuity. SIMPLE IRA
funds may not be rolled to your IRA during the first two years you
participate in your employer's SIMPLE IRA plan. The rollover rules are
generally summarized below. These transactions are often complex. If you
have any questions regarding a rollover, please see a competent tax
advisor.
1. IRA TO IRA ROLLOVERS - Funds distributed from your IRA may be rolled
over to an IRA of yours if the requirements of IRC Section 408(d)(3)
are met. A proper IRA to IRA rollover is completed if all or part of
the distribution is rolled over not later than 60 days after the
distribution is received. You may not have completed another IRA to
IRA rollover from the distributing IRA during the 12 months preceding
the date you receive the distribution. Further, you may roll the same
dollars or assets only once every 12 months.
2. QUALIFIED PLAN (OR TAX-SHELTERED ANNUITY) TO IRA ROLLOVERS - Effective
for qualified plan distributions received after January 1, 1993, you
may roll over, directly or indirectly, any eligible rollover
distribution. An eligible rollover distribution is defined generally
as any distribution from a qualified plan (other than distributions to
nonspouse beneficiaries) unless it is part of certain series of
substantially equal periodic payments, after-tax dollars or a required
minimum distribution.
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If you elect to receive your rollover distribution prior to placing it
in an IRA, thereby conducting an indirect rollover, your plan
administrator will generally be required to withhold 20 percent of
your distribution as a prepayment of income taxes. When completing the
rollover, you may make up the amount withheld, out of pocket, and roll
over the full amount distributed from your qualified plan balance, if
you so choose. To qualify as a rollover, your eligible rollover
distribution must be rolled over to your IRA not later than 60 days
after you receive it. Alternatively, you may claim the withheld amount
as income and pay the applicable income tax and, if you are under age
59 1/2, the 10 percent early distribution penalty (unless an exception
to the penalty applies). As an alternative to the indirect rollover,
your employer generally must give you the option of directly rolling
your qualified plan balance over to an IRA. If you elect the direct
rollover option, your eligible rollover distribution will be paid
directly to the IRA (or other qualified plan) that you designate. The
20 percent withholding requirements do not apply to direct rollovers.
If you place your rollover contribution in a separate (i.e., conduit)
IRA plan which holds just those dollars, you preserve the right to
later roll the money originating from the qualified plan into another
qualified plan.
3. WRITTEN ELECTION - At the time you make a proper rollover to an IRA,
you must designate to the Custodian, in writing, your election to
treat that contribution as a rollover. Once made, the rollover
election is irrevocable.
F. CARRYBACK CONTRIBUTIONS - A contribution is deemed to have been made on the
last day of the preceding taxable year if you make a contribution by the
deadline for filing your income tax return (not including extensions), and
you designate that contribution as a contribution for the preceding taxable
year. For example, if you are a calendar year taxpayer and you make your
IRA contribution on or before April 15, your contribution is considered to
have been made for the previous tax year if you designated it as such.
LIMITATIONS AND RESTRICTIONS
A. SEP PLANS - Under a Simplified Employee Pension (SEP) Plan that meets the
requirements of IRC Section 408(k), your employer may make contributions to
your IRA. Your employer is required to provide you with information which
describes the terms of your employer's SEP Plan.
B. SPOUSAL IRA - If you are married, you may make payments to an IRA
established for the benefit of your spouse. Your spouse must not have
attained age 70 1/2 in that year, or any prior year, even if you are age 70
1/2 or older. You must file a joint tax return for the year for which the
contribution is made.
The amount you may contribute to your IRA and your spouse's IRA is the
lesser of $4,000 or 100 percent of your combined compensation. However, you
may not contribute more than $2,000 to any one IRA.
C. DEDUCTION OF ROLLOVERS AND TRANSFERS - A deduction is not allowed for
rollover or transfer contributions.
D. ESTATE TAX EXCLUSION - The $100,000 federal estate tax exclusion previously
available has been repealed for individuals dying after 12/31/84. No
exclusion will be allowed for individuals dying after that date. Transfers
of
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your IRA assets to a named beneficiary made during your life and at your request
or because of your failure to instruct otherwise, may be subject to federal gift
tax under IRC Section 2501 if made after October 22, 1986.
E. SPECIAL TAX TREATMENT - Capital gains treatment and the favorable five or ten
year forward averaging tax authorized by IRC Section 402 do not apply to IRA
distributions.
F. INCOME TAX TREATMENT - Any withdrawal from your IRA, except a direct
transfer, is subject to federal income tax withholding. You may, however,
elect not to have withholding apply to your IRA withdrawal. If withholding is
applied to your withdrawal, not less than 10 percent of the amount withdrawn
must be withheld.
G. PROHIBITED TRANSACTIONS - If you or your beneficiary engage in a prohibited
transaction with your IRA, as described in IRC Section 4975, your IRA will
lose its tax-exempt status and you must include the value of your account in
your gross income for that taxable year.
H. PLEDGING - If you pledge any portion of your IRA as collateral for a loan,
the amount so pledged will be treated as a distribution and will be included
in your gross income for that year.
FEDERAL TAX PENALTIES
A. EARLY DISTRIBUTION PENALTY - If you are under age 59 1/2 and receive an IRA
distribution, an additional tax of 10 percent will apply, unless made on
account of death, disability, a qualifying rollover, a direct transfer, the
timely withdrawal of an excess contribution; or if the distribution is part
of a series of substantially equal periodic payments (at least annual
payments) made over your life expectancy or the joint life expectancy of you
and your beneficiary. Beginning January 1, 1997, payments made to pay medical
expenses which exceed 7.5 percent of your adjusted gross income and
distributions to pay for insurance by an individual who has separated from
employment and who has received unemployment compensation under a federal or
state program for at least 12 weeks are also exempt from the 10 percent tax.
This additional tax will apply only to the portion of a distribution which is
includible in your income.
B. EXCESS CONTRIBUTION PENALTY - An excise tax of 6 percent is imposed upon any
excess contribution you make to your IRA. This tax will apply each year in
which an excess remains in your IRA. An excess contribution is any
contribution amount which exceeds your contribution limit, excluding rollover
and direct transfer amounts. Your contribution limit is the lesser of $2,000
or 100 percent of your compensation for the taxable year.
C. EXCESS ACCUMULATION PENALTY - One of the requirements listed above is that
you are required to take a minimum distribution by April 1 of the year
following the year you attain age 70 1/2 and by the end of each year
thereafter and that your designated beneficiary(ies) is required to take
certain minimum distributions after your death. An additional tax of 50
percent is imposed on the amount of the required minimum distribution which
should have been taken but was not. This tax is referred to as an excess
accumulation penalty tax.
D. EXCESS DISTRIBUTION PENALTY - You will be taxed an additional 15 percent on
any amount received and included in income during a calendar year from
qualified retirement plans, tax-sheltered annuities and IRAs which exceeds
$112,500 (indexed each year for the cost of
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living). Certain exceptions may apply. If you receive an excess distribution as
described above, you should see your tax advisor to determine if these
exceptions apply to you. This tax is referred to as an excess distribution
penalty. However, this penalty is suspended for payments received during 1997,
1998 and 1999 as a result of the Small Business Job Protection Act of 1996.
E. EXCESS RETIREMENT ACCUMULATION PENALTY - Your estate will have to pay
additional federal estate tax if you die with an excess retirement
accumulation. The increased estate tax will be equal to 15 percent of the
excess retirement accumulation. An excess retirement accumulation exists if,
at the time of your death, the value of all of your interests in qualified
plans, tax-sheltered annuities and IRAs exceeds the present value of an
annuity with annual payments of $112,500 (indexed each year for the cost of
living), payable over your life expectancy immediately before your death.
This tax is referred to as an excess retirement accumulation tax penalty.
F. PENALTY REPORTING - You must file Form 5329 with the Internal Revenue Service
to report and remit any penalties or excise taxes.
CUSTODIAN/PLAN ADMINISTRATOR
The Custodian of your IRA is identified in the Individual Retirement Account
Application. If FPS Services, Inc. is not the Custodian, FPS Services, Inc.
serves as the Plan Administrator, and in such capacity is responsible for all
record keeping, applicable tax reporting and fee collection in connection with
IRA accounts. FPS Services, Inc. is also the transfer agent for the Funds.
FEES
The custodial fee currently in effect is an annual maintenance fee of $12 per
Fund account.
Your first annual maintenance fee may be paid at the same time that you mail
your IRA Application to FPS Services, Inc. Forward a separate check for $12,
made payable to FPS Services, Inc.
In subsequent years, you may pay the annual maintenance fee by forwarding a
check to FPS Services, Inc. If you do not forward payment for the annual
maintenance fee by August 31 of each year, FPS Services, Inc. will obtain
payment directly from your IRA by redeeming a sufficient number of the Fund
shares held in your IRA.
The Custodial Fees may be modified upon 30 days' written notice from the
Custodian of your IRA.
One or more of the mutual funds available for investment through your IRA may be
subject to sales charges. Such charges, if any, are listed in the prospectus of
that fund.
OTHER
A. IRS PLAN APPROVAL - The Agreement used to establish this IRA has been
approved by the Internal Revenue Service. The Internal Revenue Service
approval is a determination only as to form. It is not an endorsement of the
plan in operation or of the investments offered.
B. ADDITIONAL INFORMATION - You may obtain further information on IRAs from your
District Office of the Internal Revenue Service. In particular, you may wish
to obtain IRS Publication 590, Individual Retirement Arrangements.
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INDIVIDUAL RETIREMENT CUSTODIAL ACCOUNT
Form 5305-S Under Section 408(a) of the Internal Revenue Code
The depositor whose name appears on the attached is establishing an Individual
Retirement Account under section 408(a) to provide for his or her retirement and
for the support of his or her beneficiaries after death.
The Custodian named on the attached Application has given the Depositor the
disclosure statement required under Regulations section 1.408-6.
The Depositor has assigned the custodial account the sum indicated on the
Application.
The Depositor and the Custodian make the following agreement:
ARTICLE I
The Custodian may accept additional cash contributions on behalf of the
Depositor for a tax year of the Depositor. The total cash contributions are
limited to $2,000 for the tax year unless the contribution is a rollover
contribution described in Section 402(c) (but only after December 31, 1992),
403(a)(4), 403(b)(8), 408(d)(3) or an employer contribution to a Simplified
Employee Pension Plan as described in Section 408(k). Rollover contributions
before January 1, 1993, include rollovers described in Section 402(a)(5),
402(a)(6), 402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer
contribution to a Simplified Employee Pension Plan described in Section 408(k).
ARTICLE II
The Depositor's interest in the balance in the Custodial account is
nonforfeitable.
ARTICLE III
1. No part of the Custodial funds may be invested in life insurance contracts,
nor may the assets of the Custodial account be commingled with other property
except in a common trust fund or common investment fund (within the meaning
of Section 408(a)(5)).
2. No part of the Custodial funds may be invested in collectibles (within the
meaning of Section 408(m)) except as otherwise permitted by Section 408(m)(3)
which provides an exception for certain gold and silver coins and coins
issued under the laws of any state.
ARTICLE IV
1. Notwithstanding any provision of this agreement to the contrary, the
distribution of the Depositor's interest in the Custodial account shall be
made in accordance with the following requirements and shall otherwise comply
with Section 408(a)(6) and Proposed Regulations Section 1.408-8, including
the incidental death benefit provisions of Proposed Regulations Section
1.401(a)(9)-2, the provisions of which are herein incorporated by reference.
2. Unless otherwise elected by the time distributions are required to begin to
the Depositor under paragraph 3, or to the surviving spouse under paragraph
4, other than in the case of a life annuity, life expectancies shall be
recalculated annually. Such election shall be irrevocable as to the Depositor
and the surviving spouse and shall apply to all subsequent years. The life
expectancy of a nonspouse beneficiary may not be recalculated.
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<PAGE>
3. The Depositor's entire interest in the Custodial account must be, or begin to
be, distributed by the Depositor's required beginning date (April 1 following
the calendar year end in which the Depositor reaches age 701/2). By that
date, the Depositor may elect, in a manner acceptable to the Custodian, to
have the balance in the Custodial account distributed in:
(a) A single sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of
the Depositor and his or her designated beneficiary.
(d) Equal or substantially equal annual payments over a specified period that
may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period that
may not be longer than the joint life and last survivor expectancy of the
Depositor and his or her designated beneficiary.
4. If the Depositor dies before his or her entire interest is distributed to him
or her, the entire remaining interest will be distributed as follows:
a. If the Depositor dies on or after distribution of his or her interest has
begun, distribution must continue to be made in accordance with paragraph
3.
b. If the Depositor dies before distribution of his or her interest has
begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
beneficiary or beneficiaries, either
i. Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
ii. Be distributed in equal or substantially equal payments over the life
or life expectancy of the designated beneficiary or beneficiaries
starting by December 31 of the year following the year of the
Depositor's death. If, however, the beneficiary is the Depositor's
surviving spouse, then this distribution is not required to begin
before December 31 of the year in which the Depositor would have
turned age 70 1/2.
c. Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually
have been made before that date.
d. If the Depositor dies before his or her entire interest has been
distributed and if the beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in
the account.
5. In the case of a distribution over life expectancy in equal or substantially
equal annual payments, to determine the minimum annual payment for each year,
divide the Depositor's entire interest in the Custodial account as of the
close of business on December 31 of the preceding year by the life expectancy
of the Depositor (or the joint life and last survivor expectancy of the
Depositor and the Depositor's designated beneficiary, or the life expectancy
of the designated beneficiary, whichever applies). In the case of
distributions under paragraph 3, determine the initial life expectancy (or
joint life and last survivor expectancy) using the attained
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ages of the Depositor and designated beneficiary as of their birthdays in the
year the Depositor reaches age 70 1/2. In the case of a distribution in
accordance with paragraph 4(b)(ii), determine life expectancy using the attained
age of the designated beneficiary as of the beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy
the minimum distribution requirements described above. This method permits
an individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for
another.
ARTICLE V
1. The Depositor agrees to provide the Custodian with information necessary
for the Custodian to prepare any reports required under Section 408(i) and
Regulations Sections 1.408-5 and 1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service and
the Depositor as prescribed by the Internal Revenue Service.
ARTICLE VI
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through III and this sentence will be controlling. Any
additional articles that are not consistent with Section 408(a) and related
regulations will be invalid.
ARTICLE VII
This Agreement will be amended from time to time to comply with the provisions
of the Code and related regulations. Other amendments may be made with the
consent of the persons whose signatures appear on the Application.
ARTICLE VIII
1. Contributions. The Custodian is under no duty to compel the Depositor to
make any contributions to the Custodial account (the "Account"). The
Depositor must certify to the Custodian (in form satisfactory to it) that
any contribution other than a regular contribution is:
(a) A rollover contribution under Section 402(a)(5), 402(a)(7), 403(a)(4),
403(b)(8) or 408(d)(3) of the Code, or
(b) A direct transfer from another individual retirement account (as
defined in Section 7701(a)(37) of the Code permitted under Article I
of this agreement.
2. Investments. The Depositor shall direct the Custodian with respect to the
investment of all contributions. However, such direction shall be limited
to the purchase of shares of the Fund or Funds. Investments received
without direction may be returned or held uninvested without liability for
loss of income, interest or appreciation while directions are obtained. All
dividends and capital gain distributions received on shares held in the
Account shall be reinvested in additional shares of the issuing Fund(s).
3. Cash Contributions. The Custodian shall not accept any contribution or
direct transfer from another individual retirement account qualified under
Section 408 of the Code unless it is made in cash (or its equivalent).
4. Notices and Voting. The Custodian shall deliver to the Depositor (or, in
the event of the Depositor's death, the Depositor's designated beneficiary)
all shareholder notices and reports, prospectuses, financial statements,
proxy material and other materials as they are received
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from the Fund(s). The Custodian shall vote at all shareholder meetings of the
Fund in accordance with written instructions of the Depositor which will be
secured by the Custodian.
5. Fees and Taxes. The Custodian shall receive, and the Depositor hereby
agrees to pay, such reasonable compensation for its services ("fees") as
set forth in the currently effective Disclosure Statement for the Account.
The Custodian may substitute a different fee schedule at any time upon 30
days' notice in writing to the Depositor. Such fees may be paid by the
Depositor; however, they shall constitute a charge upon the assets of the
Account until paid. Unless otherwise paid, the Custodian shall have the
right to redeem sufficient Fund shares in the Account and to apply the
proceeds to the payment of its annual fees. Any income taxes or other taxes
of any kind that may be levied or assessed against the Account may be
similarly paid from the assets of the Account and shall not be an
obligation of the Custodian.
6. Custodian's Duties and Obligations. If FPS Services, Inc. is not the
Custodian, FPS Services, Inc. serves as the Plan Administrator for the
Custodian and in such capacity is responsible for all record keeping,
applicable tax reporting and fee collection in connection with IRA
accounts. FPS Services, Inc. also serves as transfer agent for the Fund(s).
The Custodian shall be under no duty whatsoever except such duties as are
specifically set forth in this Agreement, and, notwithstanding Article IV
of this Agreement, shall be under no duty to make any distribution from the
Account in the absence of specific directions from the Depositor or, upon
the death of the Depositor, the Depositor's designated beneficiary, whether
or not the Depositor has attained age 70 1/2 or is deceased. Neither the
Custodian, the Plan Administrator, the Sponsor, the Fund(s) nor any of
their respective affiliates shall have any duty:
(a) To ascertain whether a rollover contribution described in Article I of
this Agreement or a direct transfer from another IRA is properly made
in accordance with applicable provisions of the Code or any other
plan, IRA or other retirement arrangement;
(b) To ascertain whether any distribution is sufficient for purposes of
the rules described in Article IV of this Agreement;
(c) To make distributions in the form of an annuity contract under Article
IV of this Agreement;
(d) To confirm the existence of a disability;
(e) To review or make suggestions regarding the investment of the assets
of the Account; or
(f) To invest, reinvest or dispose of any assets held in the Account
except in accordance with Section 2 or 3 of this Article VIII.
Whenever the Depositor is responsible for any direction, notice,
warranty, representation, or instruction under this Agreement, the
Custodian shall be entitled to assume the truth of any statement made,
or believed to have been made, by the Depositor, and the Custodian
shall be under no duty of further inquiry and shall have no liability
with respect to any action taken in reliance upon the truth of such
statement.
7. Depositor's Warranties. The Depositor hereby agrees that it is not
intended that any fiduciary duties be conferred (by implication or
otherwise) upon the Custodian under this Agreement, and he or she
shall look solely to the assets of his or her Account for the payment
of any benefits to which he or she may become entitled under this
Agreement. The Depositor hereby acknowledges his or her understanding
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that taxes and penalties may be imposed under the Code for:
(a) Excess contributions;
(b) Premature distributions made before the Depositor dies, becomes
disabled (as defined in Section 72(m) of the Code) or reaches age
59 1/2, except in the case of:
(i) Rollovers or transfers to other IRAs or rollovers to eligible
retirement plans in accordance with applicable provisions of the Code
and related regulations; or
(ii) A series of substantially equal periodic payments (as defined in
Section 72(t) of the Code);
(c) Distributions which are less than the minimum amounts required under
Sections 401(a)(9), 408(a)(6) and 4974 of the Code; and
(d) Prohibited transactions under Section 4975 of the Code.
Any and all such taxes and penalties shall be paid by the Depositor.
8. Amendment. The Depositor hereby delegates to the Custodian the power to amend
this Agreement, and the Depositor shall be deemed to have consented to any
such amendment. The Custodian shall adopt amendments only in accordance with
directions made by the Sponsor. The Depositor shall be furnished a copy of
any such amendment. Notwithstanding the foregoing, the Custodian may not
amend this Agreement in such manner as to permit or cause assets of the
Account to be diverted to purposes other than for the exclusive benefit of
the Depositor and his or her beneficiaries, except to the extent that any
such amendment is necessary to conform this Agreement to any applicable law,
governmental regulation or ruling or to satisfy the requirements of the Code.
9. Termination. This Agreement shall terminate upon the complete distribution of
the Account to the Depositor or his or her beneficiaries or to another IRA.
The Custodian shall have the right to terminate this Account upon 30 days'
notice in writing to the Depositor or (in the event of his or her death) to
the Depositor's beneficiaries. In such event and upon expiration of such
period, the Custodian shall distribute the Account:
(a) To such other IRA as the Depositor (or his or her beneficiaries) shall
designate;
(b) In the absence of such direction, to the Depositor; or
(c) In the event of the Depositor's death, to the beneficiaries, as their
interests shall appear.
10.Resignation. The Custodian may resign at any time, upon 30 days' notice in
writing to the Depositor, and may be removed by the Depositor or the Sponsor
at any time, upon 30 days' notice in writing to the Custodian. Upon such
resignation or removal, the Depositor or the Sponsor (as appropriate) shall
appoint a qualified successor custodian which shall be a bank, within the
meaning of Section 408(n) of the Code, or another person who has satisfied
the requirements of Section 408(a)(2) of the Code and related regulations.
11.Successor Custodian. Upon receipt by the Custodian of written acceptance of
such appointment by the successor custodian, the Custodian shall transfer and
pay over to the successor custodian the assets of the Account and all records
pertaining thereto. The Custodian is authorized, however, to reserve such sum
of money or assets as it may deem advisable for payment of all of its fees,
compensation, costs and expenses, or for payment of any other liabilities
constituting a
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charge on or against the assets of the Account or on or against the
Custodian with respect to the Account; and any balance of such reserve
remaining after the payment of all such items shall be paid over to the
successor custodian. If assets are retained in accordance with this Section
11, they may be disposed of in accordance with the provisions of Section 5
of this Article VIII. The successor custodian shall hold the assets paid
over to it under terms which are consistent with Section 408 of the Code
and related regulations.
12. Failure of Appointment. It shall be a condition of the removal of the
Custodian that the Depositor or the Sponsor shall have appointed a
qualified successor custodian. In the event of the resignation of the
Custodian and the failure to appoint a qualified successor custodian, the
Custodian may itself appoint such successor, unless it elects to terminate
this Agreement pursuant to Section 9 of this Article VIII, and the costs of
such appointment shall be treated in the same manner as fees under Section
5 of this Article VIII.
13. Required Appointment of Successor Custodian. The Depositor may remove the
Custodian and appoint a successor custodian upon notification by the
Commissioner of Internal Revenue Service that the Custodian has failed to
comply with the applicable requirements of Section 1.401-12(n) or
applicable successor provisions of the Income Tax Regulations or is not
keeping such records, making such returns or rendering such statements as
are required by applicable Treasury Regulations or by forms prescribed by
the Internal Revenue Service.
14. Beneficiaries. By separate written document attached as the Beneficiary
Designation to this Agreement, the Depositor may designate a method for
payment of benefits in accordance with Article IV of this Agreement and
designate a beneficiary for the receipt of such benefits in the event of
the Depositor's death. Should the Depositor die without an effective
designation of method of distribution or beneficiary, the assets of the
Account shall be distributed to the surviving spouse in such manner as the
Depositor's spouse shall designate under Article IV of this Agreement. In
the absence of a surviving spouse or surviving designated beneficiary, the
assets of the Account shall be distributed to the Depositor's estate in a
lump sum.
15. Indemnification. The Depositor agrees to indemnify and hold harmless the
Custodian, the Plan Administrator (if applicable), the Sponsor, the Fund(s)
and their respective affiliates, agents, employees, successors and assigns,
from and against any claim or liability arising in connection with the
Depositor's Account, except in the case of gross negligence or willful
misconduct.
16. Governing Laws. Except to the extent preempted by the Code or other
applicable federal law, this Agreement shall be governed by and construed
and administered under the laws of the Commonwealth of Pennsylvania.
17. Severability. If any provision of this Agreement is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any
other provision of this Agreement, and this Agreement shall be construed
and enforced as if such provision had not been included.
18. Captions. The captions contained in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit,
enlarge or describe the scope or intent of this Agreement nor in any way
shall
13
<PAGE>
affect the construction of any provision of this Agreement.
19. Definitions. For purposes of this Article VIII, "Sponsor" means the
institution identified as such in the IRA Application; and "Fund" or
"Funds" means the regulated investment company or companies, the
investment advisor to which, or the principal underwriter of which, is the
Sponsor.
INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
Form 5305-A is a model Custodial account agreement that meets the requirements
of Section 408(a) and has been automatically approved by the IRS. An individual
retirement account (IRA) is established after the form is fully executed by both
the individual (Depositor) and the Custodian and must be completed no later than
the due date of the individual's income tax return for the tax year (without
regard to extensions). This account must be created in the United States for
the exclusive benefit of the Depositor or his or her beneficiaries.
Individuals may rely on regulations for Tax Reform Act of 1986 to the extent
specified in those regulations.
Do not file Form 5305-A with the IRS. Instead, keep it for your records.
For more information on IRAs, including the required disclosure you can get from
your Custodian, get Pub. 590, Individual Retirement Accounts (IRAs).
DEFINITIONS
Custodian: The Custodian must be a bank or savings and loan association, as
defined in Section 408(n), or other person who has the approval of the IRS to
act as Custodian.
Depositor: The Depositor is the person who establishes the Custodial account.
IDENTIFYING NUMBER
The Depositor's social security number will serve as the identification number
of his or her IRA. An employer identification number is required only for an
IRA for which a return is filed to report unrelated business taxable income. An
employer identification number is required for a common fund created for IRAs.
IRA FOR NON-WORKING SPOUSE
Form 5305-A may be used to establish the IRA Custodial account for a nonworking
spouse.
Contributions to an IRA Custodial account for a nonworking spouse must be made
to a separate IRA Custodial account established by the nonworking spouse.
SPECIFIC INSTRUCTIONS
Article IV: Distributions made under this Article may be made in a single sum,
periodic payment, or a combination of both. The distribution option should be
reviewed in the year the Depositor reaches age 70 1/2 to ensure that the
requirements of Section 408(a)(6) have been met.
Article VIII: Article VIII and any that follow it may incorporate additional
provisions that are agreed upon by the Depositor and Custodian to complete the
Agreement. They may include, for example,
14
<PAGE>
definitions, investment powers, voting rights, exculpatory provisions, amendment
and termination, removal of Custodian, Custodian's fees, State law requirements,
beginning date of distributions, accepting only cash, treatment of excess
contributions, prohibited transactions with the Depositor, etc. Use additional
pages if necessary and attach them to this form.
REQUESTING DISTRIBUTION
A request for a distribution from the IRA must be submitted in writing to:
FPS Services, Inc.
Retirement Plans -- Liquidation Desk
3200 Horizon Drive
King of Prussia, PA 19406-0903
If a request does not contain all necessary information, FPS Services, Inc. will
notify the Depositor in writing as to its incompleteness, requesting the
additional information, including signature guarantee if required by the Fund.
When the distribution instructions are in proper order, only then will the
shares be redeemed and the monies distributed.
NOTE: Form 5305-A may be reproduced and
reduced in size for adoption to passbook purposes.
15
<PAGE>
Exhibit 16
<TABLE>
<CAPTION>
TOTAL RETURN PERFORMANCE - SGF
- -----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL DIVIDENDS
- -----------------------------------------------------------------------------------------------------------------------------
Date N.A.V. Desc. Invstmnt # Shares Value Div/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Sep-72 $6.33 $10,000 1579.779 $10,000.00 $0.00 0.000 $0.00
31-Oct-72 $6.61 $0 1579.779 $10,442.34 $0.00 0.000 $0.00
30-Nov-72 $6.87 $0 1579.779 $10,853.08 $0.00 0.000 $0.00
31-Dec-72 $7.20 $0 1579.779 $11,374.41 $0.00 0.000 $0.00
31-Jan-73 $6.70 $0 1579.779 $10,584.52 $0.00 0.000 $0.00
28-Feb-73 $6.14 $0 1579.779 $9,699.84 $0.00 0.000 $0.00
30-Mar-73 $5.87 $0 1579.779 $9,273.30 $0.00 0.000 $0.00
30-Apr-73 $5.28 $0 1579.779 $8,341.23 $0.00 0.000 $0.00
25-May-73 $5.15 DIV $0 1579.779 $8,135.86 0.029 $45.81 $45.81 8.896 8.896 $45.81
31-May-73 $5.04 $0 1579.779 $7,962.09 $45.81 8.896 $44.84
30-Jun-73 $5.04 $0 1579.779 $7,962.09 $45.81 8.896 $44.84
31-Jul-73 $5.52 $0 1579.779 $8,720.38 $45.81 8.896 $49.11
31-Aug-73 $5.35 $0 1579.779 $8,451.82 $45.81 8.896 $47.59
30-Sep-73 $5.78 $0 1579.779 $9,131.12 $45.81 8.896 $51.42
31-Oct-73 $6.01 $0 1579.779 $9,494.47 $45.81 8.896 $53.46
30-Nov-73 $5.16 $0 1579.779 $8,151.66 $45.81 8.896 $45.90
31-Dec-73 $5.48 $0 1579.779 $8,657.19 $45.81 8.896 $48.75
31-Jan-74 $5.52 $0 1579.779 $8,720.38 $45.81 8.896 $49.11
28-Feb-74 $5.59 $0 1579.779 $8,830.96 $45.81 8.896 $49.73
30-Mar-74 $5.39 $0 1579.779 $8,515.01 $45.81 8.896 $47.95
30-Apr-74 $5.20 $0 1579.779 $8,214.85 $45.81 8.896 $46.26
31-May-74 $4.83 $0 1579.779 $7,630.33 $45.81 8.896 $42.97
30-Jun-74 $4.86 $0 1579.779 $7,677.73 $45.81 8.896 $43.23
02-Jul-74 $4.70 DIV $0 1579.779 $7,424.96 0.070 $111.21 $157.02 23.661 32.557 $153.02
31-Jul-74 $4.86 $0 1579.779 $7,677.73 $157.02 32.557 $158.23
31-Aug-74 $4.89 $0 1579.779 $7,725.12 $157.02 32.557 $159.20
30-Sep-74 $4.44 $0 1579.779 $7,014.22 $157.02 32.557 $144.55
31-Oct-74 $5.22 $0 1579.779 $8,246.45 $157.02 32.557 $169.95
30-Nov-74 $4.72 $0 1579.779 $7,456.56 $157.02 32.557 $153.67
31-Dec-74 $4.48 $0 1579.779 $7,077.41 $157.02 32.557 $145.86
31-Jan-75 $5.11 $0 1579.779 $8,072.67 $157.02 32.557 $166.37
28-Feb-75 $5.28 $0 1579.779 $8,341.23 $157.02 32.557 $171.90
31-Mar-75 $5.54 $0 1579.779 $8,751.97 $157.02 32.557 $180.37
30-Apr-75 $5.86 $0 1579.779 $9,257.50 $157.02 32.557 $190.78
31-May-75 $6.24 $0 1579.779 $9,857.82 $157.02 32.557 $203.16
30-Jun-75 $6.53 $0 1579.779 $10,315.96 $157.02 32.557 $212.60
02-Jul-75 $6.38 DIV $0 1579.779 $10,078.99 0.125 $201.54 $358.56 31.590 64.147 $409.26
31-Jul-75 $6.13 $0 1579.779 $9,684.04 $358.56 64.147 $393.22
31-Aug-75 $6.01 $0 1579.779 $9,494.47 $358.56 64.147 $385.52
30-Sep-75 $5.76 $0 1579.779 $9,099.53 $358.56 64.147 $369.48
31-Oct-75 $5.75 $0 1579.779 $9,083.73 $358.56 64.147 $368.84
30-Nov-75 $5.89 $0 1579.779 $9,304.90 $358.56 64.147 $377.82
31-Dec-75 $5.91 $0 1579.779 $9,336.49 $358.56 64.147 $379.11
31-Jan-76 $6.94 $0 1579.779 $10,963.67 $358.56 64.147 $445.18
28-Feb-76 $7.15 $0 1579.779 $11,295.42 $358.56 64.147 $458.65
31-Mar-76 $7.45 $0 1579.779 $11,769.35 $358.56 64.147 $477.89
30-Apr-76 $7.24 $0 1579.779 $11,437.60 $358.56 64.147 $464.42
31-May-76 $7.14 $0 1579.779 $11,279.62 $358.56 64.147 $458.01
30-Jun-76 $7.54 $0 1579.779 $11,911.53 $358.56 64.147 $483.67
08-Jul-76 $7.33 DIV $0 1579.779 $11,579.78 0.140 $230.15 $588.71 31.398 95.545 $700.34
31-Jul-76 $7.39 $0 1579.779 $11,674.57 $588.71 95.545 $706.08
31-Aug-76 $7.32 $0 1579.779 $11,563.98 $588.71 95.545 $699.39
30-Sep-76 $7.42 $0 1579.779 $11,721.96 $588.71 95.545 $708.94
31-Oct-76 $7.32 $0 1579.779 $11,563.98 $588.71 95.545 $699.39
30-Nov-76 $7.52 $0 1579.779 $11,879.94 $588.71 95.545 $718.50
31-Dec-76 $8.11 $0 1579.779 $12,812.01 $588.71 95.545 $774.87
31-Jan-77 $8.12 $0 1579.779 $12,827.80 $588.71 95.545 $775.82
28-Feb-77 $7.88 $0 1579.779 $12,448.66 $588.71 95.545 $752.89
31-Mar-77 $7.99 $0 1579.779 $12,622.43 $588.71 95.545 $763.40
30-Apr-77 $8.19 $0 1579.779 $12,938.39 $588.71 95.545 $782.51
31-May-77 $8.10 $0 1579.779 $12,796.21 $588.71 95.545 $773.91
30-Jun-77 $8.48 $0 1579.779 $13,396.52 $588.71 95.545 $810.22
<CAPTION>
- --------------------------------------------------------------------------------------------
CAPITAL GAINS TOTALS
- --------------------------------------------------------------------------------------------
CG/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh Shares Value Date
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00 0.000 $0.00 1579.779 $10,000.00 30-Sep-72
$0.00 0.000 $0.00 1579.779 $10,442.34 31-Oct-72
$0.00 0.000 $0.00 1579.779 $10,853.08 30-Nov-72
$0.00 0.000 $0.00 1579.779 $11,374.41 31-Dec-72
$0.00 0.000 $0.00 1579.779 $10,584.52 31-Jan-73
$0.00 0.000 $0.00 1579.779 $9,699.84 28-Feb-73
$0.00 0.000 $0.00 1579.779 $9,273.30 30-Mar-73
$0.00 0.000 $0.00 1579.779 $8,341.23 30-Apr-73
$0.000 $0.00 $0.00 0.000 $0.00 1588.675 $8,181.67 25-May-73
$0.00 0.000 $0.00 1588.675 $8,006.92 31-May-73
$0.00 0.000 $0.00 1588.675 $8,006.92 30-Jun-73
$0.00 0.000 $0.00 1588.675 $8,769.48 31-Jul-73
$0.00 0.000 $0.00 1588.675 $8,499.41 31-Aug-73
$0.00 0.000 $0.00 1588.675 $9,182.54 30-Sep-73
$0.00 0.000 $0.00 1588.675 $9,547.93 31-Oct-73
$0.00 0.000 $0.00 1588.675 $8,197.56 30-Nov-73
$0.00 0.000 $0.00 1588.675 $8,705.94 31-Dec-73
$0.00 0.000 $0.00 1588.675 $8,769.48 31-Jan-74
$0.00 0.000 $0.00 1588.675 $8,880.69 28-Feb-74
$0.00 0.000 $0.00 1588.675 $8,562.96 30-Mar-74
$0.00 0.000 $0.00 1588.675 $8,261.11 30-Apr-74
$0.00 0.000 $0.00 1588.675 $7,673.30 31-May-74
$0.00 0.000 $0.00 1588.675 $7,720.96 30-Jun-74
$0.000 $0.00 $0.00 0.000 $0.00 1612.336 $7,577.98 02-Jul-74
$0.00 0.000 $0.00 1612.336 $7,835.95 31-Jul-74
$0.00 0.000 $0.00 1612.336 $7,884.32 31-Aug-74
$0.00 0.000 $0.00 1612.336 $7,158.77 30-Sep-74
$0.00 0.000 $0.00 1612.336 $8,416.39 31-Oct-74
$0.00 0.000 $0.00 1612.336 $7,610.22 30-Nov-74
$0.00 0.000 $0.00 1612.336 $7,223.26 31-Dec-74
$0.00 0.000 $0.00 1612.336 $8,239.04 31-Jan-75
$0.00 0.000 $0.00 1612.336 $8,513.13 28-Feb-75
$0.00 0.000 $0.00 1612.336 $8,932.34 31-Mar-75
$0.00 0.000 $0.00 1612.336 $9,448.29 30-Apr-75
$0.00 0.000 $0.00 1612.336 $10,060.98 31-May-75
$0.00 0.000 $0.00 1612.336 $10,528.55 30-Jun-75
$0.000 $0.00 $0.00 0.000 $0.00 1643.925 $10,488.24 02-Jul-75
$0.00 0.000 $0.00 1643.925 $10,077.26 31-Jul-75
$0.00 0.000 $0.00 1643.925 $9,879.99 31-Aug-75
$0.00 0.000 $0.00 1643.925 $9,469.01 30-Sep-75
$0.00 0.000 $0.00 1643.925 $9,452.57 31-Oct-75
$0.00 0.000 $0.00 1643.925 $9,682.72 30-Nov-75
$0.00 0.000 $0.00 1643.925 $9,715.60 31-Dec-75
$0.00 0.000 $0.00 1643.925 $11,408.84 31-Jan-76
$0.00 0.000 $0.00 1643.925 $11,754.07 28-Feb-76
$0.00 0.000 $0.00 1643.925 $12,247.24 31-Mar-76
$0.00 0.000 $0.00 1643.925 $11,902.02 30-Apr-76
$0.00 0.000 $0.00 1643.925 $11,737.63 31-May-76
$0.00 0.000 $0.00 1643.925 $12,395.20 30-Jun-76
$0.000 $0.00 $0.00 0.000 $0.00 1675.324 $12,280.12 08-Jul-76
$0.00 0.000 $0.00 1675.324 $12,380.64 31-Jul-76
$0.00 0.000 $0.00 1675.324 $12,263.37 31-Aug-76
$0.00 0.000 $0.00 1675.324 $12,430.90 30-Sep-76
$0.00 0.000 $0.00 1675.324 $12,263.37 31-Oct-76
$0.00 0.000 $0.00 1675.324 $12,598.43 30-Nov-76
$0.00 0.000 $0.00 1675.324 $13,586.88 31-Dec-76
$0.00 0.000 $0.00 1675.324 $13,603.63 31-Jan-77
$0.00 0.000 $0.00 1675.324 $13,201.55 28-Feb-77
$0.00 0.000 $0.00 1675.324 $13,385.84 31-Mar-77
$0.00 0.000 $0.00 1675.324 $13,720.90 30-Apr-77
$0.00 0.000 $0.00 1675.324 $13,570.12 31-May-77
$0.00 0.000 $0.00 1675.324 $14,206.75 30-Jun-77
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOTAL RETURN PERFORMANCE - SGF
- -----------------------------------------------------------------------------------------------------------------------------
PRINCIPAL DIVIDENDS
- -----------------------------------------------------------------------------------------------------------------------------
Date N.A.V. Desc. Invstmnt # Shares Value Div/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05-Jul-77 $8.31 DIV $0 1579.779 $13,127.96 0.200 $335.06 $923.78 40.321 135.866 $1,129.04
31-Jul-77 $8.06 $0 1579.779 $12,733.02 $923.78 135.866 $1,095.08
31-Aug-77 $7.87 $0 1579.779 $12,432.86 $923.78 135.866 $1,069.26
30-Sep-77 $7.94 $0 1579.779 $12,543.44 $923.78 135.866 $1,078.77
31-Oct-77 $7.60 $0 1579.779 $12,006.32 $923.78 135.866 $1,032.58
30-Nov-77 $7.99 $0 1579.779 $12,622.43 $923.78 135.866 $1,085.57
31-Dec-77 $8.04 $0 1579.779 $12,701.42 $923.78 135.866 $1,092.36
31-Jan-78 $7.64 $0 1579.779 $12,069.51 $923.78 135.866 $1,038.01
28-Feb-78 $7.76 $0 1579.779 $12,259.08 $923.78 135.866 $1,054.32
31-Mar-78 $8.04 $0 1579.779 $12,701.42 $923.78 135.866 $1,092.36
30-Apr-78 $8.63 $0 1579.779 $13,633.49 $923.78 135.866 $1,172.52
31-May-78 $8.96 $0 1579.779 $14,154.82 $923.78 135.866 $1,217.36
30-Jun-78 $8.90 $0 1579.779 $14,060.03 $923.78 135.866 $1,209.20
03-Jul-78 $8.69 DIV $0 1579.779 $13,633.49 0.235 $403.18 $1,326.95 46.718 182.584 $1,575.70
31-Jul-78 $9.07 $0 1579.779 $14,328.59 $1,326.95 182.584 $1,656.03
31-Aug-78 $9.60 $0 1579.779 $15,165.88 $1,326.95 182.584 $1,752.80
30-Sep-78 $9.67 $0 1579.779 $15,276.46 $1,326.95 182.584 $1,765.58
31-Oct-78 $7.98 $0 1579.779 $12,606.64 $1,326.95 182.584 $1,457.02
30-Nov-78 $8.33 $0 1579.779 $13,159.56 $1,326.95 182.584 $1,520.92
31-Dec-78 $8.39 $0 1579.779 $13,254.34 $1,326.95 182.584 $1,531.88
31-Jan-79 $9.09 $0 1579.779 $14,360.19 $1,326.95 182.584 $1,659.68
28-Feb-79 $8.65 $0 1579.779 $13,665.09 $1,326.95 182.584 $1,579.35
30-Mar-79 $9.22 $0 1579.779 $14,565.56 $1,326.95 182.584 $1,683.42
30-Apr-79 $9.41 $0 1579.779 $14,865.72 $1,326.95 182.584 $1,718.11
31-May-79 $9.10 $0 1579.779 $14,375.99 $1,326.95 182.584 $1,661.51
30-Jun-79 $9.62 $0 1579.779 $15,197.47 $1,326.95 182.584 $1,756.45
02-Jul-79 $9.21 DIV $0 1579.779 $14,549.76 0.260 $458.21 $1,785.17 49.752 232.335 $2,139.81
31-Jul-79 $9.54 $0 1579.779 $15,071.09 $1,785.17 232.335 $2,216.48
31-Aug-79 $10.19 $0 1579.779 $16,097.95 $1,785.17 232.335 $2,367.50
30-Sep-79 $10.01 $0 1579.779 $15,813.59 $1,785.17 232.335 $2,325.68
31-Oct-79 $8.97 $0 1579.779 $14,170.62 $1,785.17 232.335 $2,084.05
30-Nov-79 $9.38 $0 1579.779 $14,818.33 $1,785.17 232.335 $2,179.31
31-Dec-79 $9.65 $0 1579.779 $15,244.87 $1,785.17 232.335 $2,242.04
31-Jan-80 $10.11 $0 1579.779 $15,971.56 $1,785.17 232.335 $2,348.91
28-Feb-80 $9.80 $0 1579.779 $15,481.83 $1,785.17 232.335 $2,276.89
31-Mar-80 $8.42 $0 1579.779 $13,301.74 $1,785.17 232.335 $1,956.26
30-Apr-80 $8.79 $0 1579.779 $13,886.26 $1,785.17 232.335 $2,042.23
31-May-80 $9.24 $0 1579.779 $14,597.16 $1,785.17 232.335 $2,146.78
30-Jun-80 $9.48 $0 1579.779 $14,976.30 $1,785.17 232.335 $2,202.54
02-Jul-80 $9.37 DIV $0 1579.779 $14,802.53 0.310 $561.76 $2,346.92 59.953 292.288 $2,738.74
31-Jul-80 $10.19 $0 1579.779 $16,097.95 $2,346.92 292.288 $2,978.41
31-Aug-80 $10.44 $0 1579.779 $16,492.89 $2,346.92 292.288 $3,051.49
30-Sep-80 $10.98 $0 1579.779 $17,345.97 $2,346.92 292.288 $3,209.32
31-Oct-80 $11.09 $0 1579.779 $17,519.75 $2,346.92 292.288 $3,241.47
30-Nov-80 $12.77 $0 1579.779 $20,173.78 $2,346.92 292.288 $3,732.52
31-Dec-80 $12.36 $0 1579.779 $19,526.07 $2,346.92 292.288 $3,612.68
31-Jan-81 $11.45 $0 1579.779 $18,088.47 $2,346.92 292.288 $3,346.70
28-Feb-81 $11.59 $0 1579.779 $18,309.64 $2,346.92 292.288 $3,387.62
30-Mar-81 $12.21 $0 1579.779 $19,289.10 $2,346.92 292.288 $3,568.84
30-Apr-81 $12.06 $0 1579.779 $19,052.13 $2,346.92 292.288 $3,524.99
31-May-81 $12.34 $0 1579.779 $19,494.47 $2,346.92 292.288 $3,606.83
30-Jun-81 $11.83 $0 1579.779 $18,688.78 $2,346.92 292.288 $3,457.77
09-Jul-81 $11.42 DIV $0 1579.779 $18,041.07 0.280 $524.18 $2,871.10 45.900 338.188 $3,862.11
31-Jul-81 $11.72 $0 1579.779 $18,515.01 $2,871.10 338.188 $3,963.56
31-Aug-81 $11.03 $0 1579.779 $17,424.96 $2,871.10 338.188 $3,730.21
30-Sep-81 $10.53 $0 1579.779 $16,635.07 $2,871.10 338.188 $3,561.12
31-Oct-81 $11.28 $0 1579.779 $17,819.91 $2,871.10 338.188 $3,814.76
30-Nov-81 $11.44 $0 1579.779 $18,072.67 $2,871.10 338.188 $3,868.87
31-Dec-81 $11.26 $0 1579.779 $17,788.31 $2,871.10 338.188 $3,808.00
31-Jan-82 $10.74 $0 1579.779 $16,966.82 $2,871.10 338.188 $3,632.14
28-Feb-82 $10.25 $0 1579.779 $16,192.73 $2,871.10 338.188 $3,466.43
31-Mar-82 $10.16 $0 1579.779 $16,050.55 $2,871.10 338.188 $3,435.99
30-Apr-82 $11.11 $0 1579.779 $17,551.34 $2,871.10 338.188 $3,757.27
31-May-82 $10.95 $0 1579.779 $17,298.58 $2,871.10 338.188 $3,703.16
30-Jun-82 $11.04 $0 1579.779 $17,440.76 $2,871.10 338.188 $3,733.60
<CAPTION>
- -----------------------------------------------------------------------------------------------
CAPITAL GAINS TOTALS
- -----------------------------------------------------------------------------------------------
CG/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh Shares Value Date
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$0.000 $0.00 $0.00 0.000 $0.00 1715.644 $14,257.01 05-Jul-77
$0.00 0.000 $0.00 1715.644 $13,828.09 31-Jul-77
$0.00 0.000 $0.00 1715.644 $13,502.12 31-Aug-77
$0.00 0.000 $0.00 1715.644 $13,622.22 30-Sep-77
$0.00 0.000 $0.00 1715.644 $13,038.90 31-Oct-77
$0.00 0.000 $0.00 1715.644 $13,708.00 30-Nov-77
$0.00 0.000 $0.00 1715.644 $13,793.78 31-Dec-77
$0.00 0.000 $0.00 1715.644 $13,107.52 31-Jan-78
$0.00 0.000 $0.00 1715.644 $13,313.40 28-Feb-78
$0.00 0.000 $0.00 1715.644 $13,793.78 31-Mar-78
$0.00 0.000 $0.00 1715.644 $14,806.01 30-Apr-78
$0.00 0.000 $0.00 1715.644 $15,372.17 31-May-78
$0.00 0.000 $0.00 1715.644 $15,269.24 30-Jun-78
$0.000 $0.00 $0.00 0.000 $0.00 1762.362 $15,209.19 03-Jul-78
$0.00 0.000 $0.00 1762.362 $15,984.63 31-Jul-78
$0.00 0.000 $0.00 1762.362 $16,918.68 31-Aug-78
$0.00 0.000 $0.00 1762.362 $17,042.04 30-Sep-78
$0.00 0.000 $0.00 1762.362 $14,063.65 31-Oct-78
$0.00 0.000 $0.00 1762.362 $14,680.48 30-Nov-78
$0.00 0.000 $0.00 1762.362 $14,786.22 31-Dec-78
$0.00 0.000 $0.00 1762.362 $16,019.87 31-Jan-79
$0.00 0.000 $0.00 1762.362 $15,244.43 28-Feb-79
$0.00 0.000 $0.00 1762.362 $16,248.98 30-Mar-79
$0.00 0.000 $0.00 1762.362 $16,583.83 30-Apr-79
$0.00 0.000 $0.00 1762.362 $16,037.50 31-May-79
$0.00 0.000 $0.00 1762.362 $16,953.93 30-Jun-79
$0.000 $0.00 $0.00 0.000 $0.00 1812.114 $16,689.57 02-Jul-79
$0.00 0.000 $0.00 1812.114 $17,287.57 31-Jul-79
$0.00 0.000 $0.00 1812.114 $18,465.44 31-Aug-79
$0.00 0.000 $0.00 1812.114 $18,139.26 30-Sep-79
$0.00 0.000 $0.00 1812.114 $16,254.66 31-Oct-79
$0.00 0.000 $0.00 1812.114 $16,997.63 30-Nov-79
$0.00 0.000 $0.00 1812.114 $17,486.90 31-Dec-79
$0.00 0.000 $0.00 1812.114 $18,320.47 31-Jan-80
$0.00 0.000 $0.00 1812.114 $17,758.72 28-Feb-80
$0.00 0.000 $0.00 1812.114 $15,258.00 31-Mar-80
$0.00 0.000 $0.00 1812.114 $15,928.48 30-Apr-80
$0.00 0.000 $0.00 1812.114 $16,743.94 31-May-80
$0.00 0.000 $0.00 1812.114 $17,178.84 30-Jun-80
$0.000 $0.00 $0.00 0.000 $0.00 1872.067 $17,541.27 02-Jul-80
$0.00 0.000 $0.00 1872.067 $19,076.36 31-Jul-80
$0.00 0.000 $0.00 1872.067 $19,544.38 31-Aug-80
$0.00 0.000 $0.00 1872.067 $20,555.29 30-Sep-80
$0.00 0.000 $0.00 1872.067 $20,761.22 31-Oct-80
$0.00 0.000 $0.00 1872.067 $23,906.29 30-Nov-80
$0.00 0.000 $0.00 1872.067 $23,138.75 31-Dec-80
$0.00 0.000 $0.00 1872.067 $21,435.16 31-Jan-81
$0.00 0.000 $0.00 1872.067 $21,697.25 28-Feb-81
$0.00 0.000 $0.00 1872.067 $22,857.94 30-Mar-81
$0.00 0.000 $0.00 1872.067 $22,577.13 30-Apr-81
$0.00 0.000 $0.00 1872.067 $23,101.30 31-May-81
$0.00 0.000 $0.00 1872.067 $22,146.55 30-Jun-81
$0.000 $0.00 $0.00 0.000 $0.00 1917.967 $21,903.18 09-Jul-81
$0.00 0.000 $0.00 1917.967 $22,478.57 31-Jul-81
$0.00 0.000 $0.00 1917.967 $21,155.17 31-Aug-81
$0.00 0.000 $0.00 1917.967 $20,196.19 30-Sep-81
$0.00 0.000 $0.00 1917.967 $21,634.67 31-Oct-81
$0.00 0.000 $0.00 1917.967 $21,941.54 30-Nov-81
$0.00 0.000 $0.00 1917.967 $21,596.31 31-Dec-81
$0.00 0.000 $0.00 1917.967 $20,598.96 31-Jan-82
$0.00 0.000 $0.00 1917.967 $19,659.16 28-Feb-82
$0.00 0.000 $0.00 1917.967 $19,486.54 31-Mar-82
$0.00 0.000 $0.00 1917.967 $21,308.61 30-Apr-82
$0.00 0.000 $0.00 1917.967 $21,001.74 31-May-82
$0.00 0.000 $0.00 1917.967 $21,174.35 30-Jun-82
</TABLE>
<PAGE>
TOTAL RETURN PERFORMANCE-SGF
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL DIVIDENDS
- -----------------------------------------------------------------------------------------------------------------------------------
Date N.A.V. Desc. Invstmnt # Shares Value Div/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
02-Jul-82 $10.49DIV $0 1579.779 $16,571.88 0.290 $556.21 $3,427.31 53.023 391.211 $4,103.80
31-Jul-82 $10.24 $0 1579.779 $16,176.94 $3,427.31 391.211 $4,006.00
31-Aug-82 $11.36 $0 1579.779 $17,946.29 $3,427.31 391.211 $4,444.16
30-Sep-82 $11.59 $0 1579.779 $18,309.64 $3,427.31 391.211 $4,534.13
31-Oct-82 $13.22 $0 1579.779 $20,884.68 $3,427.31 391.211 $5,171.81
30-Nov-82 $14.07 $0 1579.779 $22,227.49 $3,427.31 391.211 $5,504.34
31-Dec-82 $14.52 $0 1579.779 $22,938.39 $3,427.31 391.211 $5,680.38
31-Jan-83 $15.23 $0 1579.779 $24,060.03 $3,427.31 391.211 $5,958.14
28-Feb-83 $16.32 $0 1579.779 $25,781.99 $3,427.31 391.211 $6,384.56
31-Mar-83 $16.67 $0 1579.779 $26,334.91 $3,427.31 391.211 $6,521.49
30-Apr-83 $17.81 $0 1579.779 $28,135.86 $3,427.31 391.211 $6,967.47
31-May-83 $17.92 $0 1579.779 $28,309.64 $3,427.31 391.211 $7,010.50
30-Jun-83 $18.80 $0 1579.779 $29,699.84 $3,427.31 391.211 $7,354.77
05-Jul-83 $18.57 DIV $0 1579.779 $29,336.49 0.130 $256.23 $3,683.54 13.798 405.009 $7,521.02
31-Jul-83 $18.24 $0 1579.779 $28,815.17 $3,683.54 405.009 $7,387.36
31-Aug-83 $17.94 $0 1579.779 $28,341.23 $3,683.54 405.009 $7,265.86
30-Sep-83 $18.30 $0 1579.779 $28,909.95 $3,683.54 405.009 $7,411.66
31-Oct-83 $17.43 $0 1579.779 $27,535.55 $3,683.54 405.009 $7,059.31
30-Nov-83 $18.51 $0 1579.779 $29,241.71 $3,683.54 405.009 $7,496.72
31-Dec-83 $18.21 $0 1579.779 $28,767.77 $3,683.54 405.009 $7,375.21
31-Jan-84 $17.32 $0 1579.779 $27,361.77 $3,683.54 405.009 $7,014.75
28-Feb-84 $16.24 $0 1579.779 $25,655.61 $3,683.54 405.009 $6,577.34
31-Mar-84 $16.55 $0 1579.779 $26,145.34 $3,683.54 405.009 $6,702.90
30-Apr-84 $16.43 $0 1579.779 $25,955.77 $3,683.54 405.009 $6,654.30
31-May-84 $15.67 $0 1579.779 $24,755.13 $3,683.54 405.009 $6,346.49
30-Jun-84 $16.21 $0 1579.779 $25,608.21 $3,683.54 405.009 $6,565.19
02-Jul-84 $15.34 DIV/CG $0 1579.779 $24,233.81 0.140 $277.87 $3,961.41 18.114 423.123 $6,490.71
31-Jul-84 $15.11 $0 1579.779 $23,870.46 $3,961.41 423.123 $6,393.39
31-Aug-84 $16.96 $0 1579.779 $26,793.05 $3,961.41 423.123 $7,176.17
30-Sep-84 $16.55 $0 1579.779 $26,145.34 $3,961.41 423.123 $7,002.69
31-Oct-84 $16.32 $0 1579.779 $25,781.99 $3,961.41 423.123 $6,905.37
30-Nov-84 $15.87 $0 1579.779 $25,071.09 $3,961.41 423.123 $6,714.96
31-Dec-84 $16.45 $0 1579.779 $25,987.36 $3,961.41 423.123 $6,960.37
31-Jan-85 $18.13 $0 1579.779 $28,641.39 $3,961.41 423.123 $7,671.22
28-Feb-85 $18.42 $0 1579.779 $29,099.53 $3,961.41 423.123 $7,793.93
31-Mar-85 $17.83 $0 1579.779 $28,167.46 $3,961.41 423.123 $7,544.28
30-Apr-85 $17.49 $0 1579.779 $27,630.33 $3,961.41 423.123 $7,400.42
31-May-85 $18.84 $0 1579.779 $29,763.03 $3,961.41 423.123 $7,971.64
30-Jun-85 $19.41 $0 1579.779 $30,663.51 $3,961.41 423.123 $8,212.82
01-Jul-85 $18.65 DIV/CG $0 1579.779 $29,462.88 0.200 $418.69 $4,380.11 22.450 445.573 $8,309.94
31-Jul-85 $18.50 $0 1579.779 $29,225.91 $4,380.11 445.573 $8,243.10
30-Aug-85 $18.30 $0 1579.779 $28,909.95 $4,380.11 445.573 $8,153.99
30-Sep-85 $17.08 $0 1579.779 $26,982.62 $4,380.11 445.573 $7,610.39
31-Oct-85 $17.88 $0 1579.779 $28,246.45 $4,380.11 445.573 $7,966.85
30-Nov-85 $19.36 $0 1579.779 $30,584.52 $4,380.11 445.573 $8,626.30
31-Dec-85 $20.09 $0 1579.779 $31,737.76 $4,380.11 445.573 $8,951.56
31-Jan-86 $20.69 $0 1579.779 $32,685.62 $4,380.11 445.573 $9,218.91
28-Feb-86 $22.50 $0 1579.779 $35,545.02 $4,380.11 445.573 $10,025.40
31-Mar-86 $23.71 $0 1579.779 $37,456.56 $4,380.11 445.573 $10,564.54
30-Apr-86 $23.62 $0 1579.779 $37,314.38 $4,380.11 445.573 $10,524.44
31-May-86 $24.25 $0 1579.779 $38,309.64 $4,380.11 445.573 $10,805.15
27-Jun-86 $22.28 DIV/CG $0 1579.779 $35,197.47 0.280 $611.63 $4,991.74 27.452 473.025 $10,539.00
30-Jun-86 $22.34 $0 1579.779 $35,292.26 $4,991.74 473.025 $10,567.38
31-Jul-86 $21.02 $0 1579.779 $33,206.95 $4,991.74 473.025 $9,942.99
31-Aug-86 $21.98 $0 1579.779 $34,723.54 $4,991.74 473.025 $10,397.09
30-Sep-86 $20.41 $0 1579.779 $32,243.29 $4,991.74 473.025 $9,654.44
31-Oct-86 $21.00 $0 1579.779 $33,175.36 $4,991.74 473.025 $9,933.53
30-Nov-86 $20.88 $0 1579.779 $32,985.78 $4,991.74 473.025 $9,876.76
11-Dec-86 $20.41 CG $0 1579.779 $32,243.29 0.000 $0.00 $4,991.74 0.000 473.025 $9,654.44
31-Dec-86 $20.02 $0 1579.779 $31,627.17 $4,991.74 473.025 $9,469.96
30-Jan-87 $22.02 $0 1579.779 $34,786.73 $4,991.74 473.025 $10,416.01
28-Feb-87 $23.54 $0 1579.779 $37,187.99 $4,991.74 473.025 $11,135.01
31-Mar-87 $23.84 $0 1579.779 $37,661.93 $4,991.74 473.025 $11,276.92
30-Apr-87 $22.99 $0 1579.779 $36,319.12 $4,991.74 473.025 $10,874.85
29-May-87 $22.24 $0 1579.779 $35,134.28 $4,991.74 473.025 $10,520.08
--------------------------------------------------------------------------------------------------------------------
CAPITAL GAINS TOTALS
--------------------------------------------------------------------------------------------------------------------
CG/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh Shares Value Date
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$0.000 $0.00 $0.00 0.000 $0.00 1970.990 $20,675.68 02-Jul-82
$0.00 0.000 $0.00 1970.990 $20,182.94 31-Jul-82
$0.00 0.000 $0.00 1970.990 $22,390.44 31-Aug-82
$0.00 0.000 $0.00 1970.990 $22,843.77 30-Sep-82
$0.00 0.000 $0.00 1970.990 $26,056.48 31-Oct-82
$0.00 0.000 $0.00 1970.990 $27,731.83 30-Nov-82
$0.00 0.000 $0.00 1970.990 $28,618.77 31-Dec-82
$0.00 0.000 $0.00 1970.990 $30,018.17 31-Jan-83
$0.00 0.000 $0.00 1970.990 $32,166.55 28-Feb-83
$0.00 0.000 $0.00 1970.990 $32,856.40 31-Mar-83
$0.00 0.000 $0.00 1970.990 $35,103.33 30-Apr-83
$0.00 0.000 $0.00 1970.990 $35,320.14 31-May-83
$0.00 0.000 $0.00 1970.990 $37,054.61 30-Jun-83
$0.000 $0.00 $0.00 0.000 $0.00 1984.788 $36,857.51 05-Jul-83
$0.00 0.000 $0.00 1984.788 $36,202.53 31-Jul-83
$0.00 0.000 $0.00 1984.788 $35,607.09 31-Aug-83
$0.00 0.000 $0.00 1984.788 $36,321.62 30-Sep-83
$0.00 0.000 $0.00 1984.788 $34,594.85 31-Oct-83
$0.00 0.000 $0.00 1984.788 $36,738.42 30-Nov-83
$0.00 0.000 $0.00 1984.788 $36,142.98 31-Dec-83
$0.00 0.000 $0.00 1984.788 $34,376.52 31-Jan-84
$0.00 0.000 $0.00 1984.788 $32,232.95 28-Feb-84
$0.00 0.000 $0.00 1984.788 $32,848.24 31-Mar-84
$0.00 0.000 $0.00 1984.788 $32,610.06 30-Apr-84
$0.00 0.000 $0.00 1984.788 $31,101.62 31-May-84
$0.00 0.000 $0.00 1984.788 $32,173.41 30-Jun-84
$0.700 $1,389.35 $1,389.35 90.570 90.570 $1,389.35 2093.472 $32,113.87 02-Jul-84
$1,389.35 90.570 $1,368.52 2093.472 $31,632.37 31-Jul-84
$1,389.35 90.570 $1,536.08 2093.472 $35,505.29 31-Aug-84
$1,389.35 90.570 $1,498.94 2093.472 $34,646.97 30-Sep-84
$1,389.35 90.570 $1,478.11 2093.472 $34,165.47 31-Oct-84
$1,389.35 90.570 $1,437.35 2093.472 $33,223.41 30-Nov-84
$1,389.35 90.570 $1,489.88 2093.472 $34,437.62 31-Dec-84
$1,389.35 90.570 $1,642.04 2093.472 $37,954.65 31-Jan-85
$1,389.35 90.570 $1,668.31 2093.472 $38,561.76 28-Feb-85
$1,389.35 90.570 $1,614.87 2093.472 $37,326.61 31-Mar-85
$1,389.35 90.570 $1,584.08 2093.472 $36,614.83 30-Apr-85
$1,389.35 90.570 $1,706.35 2093.472 $39,441.02 31-May-85
$1,389.35 90.570 $1,757.97 2093.472 $40,634.30 30-Jun-85
$0.610 $1,277.02 $2,666.37 68.473 159.043 $2,966.16 2184.395 $40,738.97 01-Jul-85
$2,666.37 159.043 $2,942.30 2184.395 $40,411.31 31-Jul-85
$2,666.37 159.043 $2,910.49 2184.395 $39,974.43 30-Aug-85
$2,666.37 159.043 $2,716.46 2184.395 $37,309.47 30-Sep-85
$2,666.37 159.043 $2,843.69 2184.395 $39,056.99 31-Oct-85
$2,666.37 159.043 $3,079.08 2184.395 $42,289.89 30-Nov-85
$2,666.37 159.043 $3,195.18 2184.395 $43,884.50 31-Dec-85
$2,666.37 159.043 $3,290.61 2184.395 $45,195.14 31-Jan-86
$2,666.37 159.043 $3,578.47 2184.395 $49,148.89 28-Feb-86
$2,666.37 159.043 $3,770.92 2184.395 $51,792.01 31-Mar-86
$2,666.37 159.043 $3,756.60 2184.395 $51,595.42 30-Apr-96
$2,666.37 159.043 $3,856.80 2184.395 $52,971.59 31-May-86
$1.420 $3,101.84 $5,768.21 139.221 298.264 $6,645.33 2351.068 $52,381.80 27-Jun-86
$5,768.21 298.264 $6,663.22 2351.068 $52,522.86 30-Jun-86
$5,768.21 298.264 $6,269.51 2351.068 $49,419.45 31-Jul-86
$5,768.21 298.264 $6,555.85 2351.068 $51,676.48 31-Aug-86
$5,768.21 298.264 $6,087.57 2351.068 $47,985.30 30-Sep-86
$5,768.21 298.264 $6,263.55 2351.068 $49,372.43 31-Oct-86
$5,768.21 298.264 $6,227.76 2351.068 $49,090.30 30-Nov-86
$0.650 $1,528.19 $7,296.41 74.875 373.139 $7,615.77 2425.943 $49,513.50 11-Dec-86
$7,296.41 373.139 $7,470.24 2425.943 $48,567.38 31-Dec-86
$7,296.41 373.139 $8,216.52 2425.943 $53,419.26 30-Jan-87
$7,296.41 373.139 $8,783.69 2425.943 $57,106.70 28-Feb-87
$7,296.41 373.139 $8,895.63 2425.943 $57,834.48 31-Mar-87
$7,296.41 373.139 $8,578.47 2425.943 $55,772.43 30-Apr-87
$7,296.41 373.139 $8,298.61 2425.943 $53,952.97 29-May-87
</TABLE>
<PAGE>
TOTAL RETURN PERFORMANCE - SGF
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL DIVIDENDS
- ------------------------------------------------------------------------------------------------------------------------------------
Date N.A.V. Desc. Invstmnt # Shares Value Div/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Jun-87 $22.86 $0 1579.779 $36,113.74 $4,991.74 473.025 $10,813.35
01-Jul-87 $21.23 DIV/CG $0 1579.779 $33,538.70 0.380 $921.86 $5,913.59 43.422 516.448 $10,964.18
31-Jul-87 $21.84 $0 1579.779 $34,502.37 $5,913.59 516.448 $11,279.21
31-Aug-87 $23.09 $0 1579.779 $36,477.09 $5,913.59 516.448 $11,924.77
30-Sep-87 $22.38 $0 1579.779 $35,355.45 $5,913.59 516.448 $11,558.10
30-Oct-87 $17.47 $0 1579.779 $27,598.74 $5,913.59 516.448 $9,022.34
30-Nov-87 $16.66 $0 1579.779 $26,319.12 $5,913.59 516.448 $8,604.02
11-Dec-87 $16.25 DIV/CG $0 1579.779 $25,671.41 0.320 $835.17 $6,748.77 51.395 567.843 $9,227.45
31-Dec-87 $17.23 $0 1579.779 $27,219.59 $6,748.77 567.843 $9,783.93
29-Jan-88 $18.43 $0 1579.779 $29,115.32 $6,748.77 567.843 $10,465.34
29-Feb-88 $19.34 $0 1579.779 $30,552.92 $6,748.77 567.843 $10,982.08
31-Mar-88 $19.49 $0 1579.779 $30,789.89 $6,748.77 567.843 $11,067.26
29-Apr-88 $19.64 $0 1579.779 $31,026.86 $6,748.77 567.843 $11,152.43
31-May-88 $19.48 $0 1579.779 $30,774.09 $6,748.77 567.843 $11,061.58
30-Jun-88 $20.40 $0 1579.779 $32,227.49 $6,748.77 567.843 $11,583.99
01-Jul-88 $19.20 DIV/CG $0 1579.779 $30,331.75 0.260 $704.47 $7,453.24 36.691 604.534 $11,607.05
29-Jul-88 $19.17 $0 1579.779 $30,284.36 $7,453.24 604.534 $11,588.92
31-Aug-88 $19.10 $0 1579.779 $30,173.78 $7,453.24 604.534 $11,546.60
30-Sep-88 $19.67 $0 1579.779 $31,074.25 $7,453.24 604.534 $11,891.18
31-Oct-88 $19.98 $0 1579.779 $31,563.98 $7,453.24 604.534 $12,078.59
30-Nov-88 $19.57 $0 1579.779 $30,916.27 $7,453.24 604.534 $11,830.73
09-Dec-88 $19.10 DIV/CG $0 1579.779 $30,173.78 0.270 $773.86 $8,227.09 40.516 645.050 $12,320.46
30-Dec-88 $19.06 $0 1579.779 $30,110.58 $8,227.09 645.050 $12,294.65
31-Jan-89 $20.11 $0 1579.779 $31,769.35 $8,227.09 645.050 $12,971.96
28-Feb-89 $19.83 $0 1579.779 $31,327.01 $8,227.09 645.050 $12,791.34
31-Mar-89 $20.18 $0 1579.779 $31,879.94 $8,227.09 645.050 $13,017.11
28-Apr-89 $21.03 $0 1579.779 $33,222.75 $8,227.09 645.050 $13,565.40
31-May-89 $21.84 $0 1579.779 $34,502.37 $8,227.09 645.050 $14,087.89
30-Jun-89 $21.45 $0 1579.779 $33,886.26 $8,227.09 645.050 $13,836.32
03-Jul-89 $20.09 DIV/CG $0 1579.779 $31,737.76 0.280 $840.75 $9,067.85 41.849 686.899 $13,799.81
31-Jul-89 $21.15 $0 1579.779 $33,412.32 $9,067.85 686.899 $14,527.92
31-Aug-89 $21.93 $0 1579.779 $34,644.55 $9,067.85 686.899 $15,063.70
29-Sep-89 $21.86 $0 1579.779 $34,533.97 $9,067.85 686.899 $15,015.62
31-Oct-89 $21.18 $0 1579.779 $33,459.72 $9,067.85 686.899 $14,548.53
30-Nov-89 $21.71 $0 1579.779 $34,297.00 $9,067.85 686.899 $14,912.59
08-Dec-89 $20.04 DIV/CG $0 1579.779 $31,658.77 0.430 $1,381.13 $10,448.98 68.919 755.818 $15,146.60
29-Dec-89 $20.24 $0 1579.779 $31,974.72 $10,448.98 755.818 $15,297.76
31-Jan-90 $19.16 $0 1579.779 $30,268.56 $10,448.98 755.818 $14,481.48
28-Feb-90 $19.13 $0 1579.779 $30,221.17 $10,448.98 755.818 $14,458.80
30-Mar-90 $19.15 $0 1579.779 $30,252.76 $10,448.98 755.818 $14,473.92
30-Apr-90 $18.48 $0 1579.779 $29,194.31 $10,448.98 755.818 $13,967.52
31-May-90 $19.66 $0 1579.779 $31,058.45 $10,448.98 755.818 $14,859.39
29-Jun-90 $19.60 $0 1579.779 $30,963.67 $10,448.98 755.818 $14,814.04
02-Jul-90 $18.76 DIV/CG $0 1579.779 $29,636.65 0.410 $1,435.18 $11,884.16 76.502 832.320 $15,614.33
31-Jul-90 $18.65 $0 1579.779 $29,462.88 $11,884.16 832.320 $15,522.77
31-Aug-90 $17.61 $0 1579.779 $27,819.91 $11,884.16 832.320 $14,657.16
28-Sep-90 $17.20 $0 1579.779 $27,172.20 $11,884.16 832.320 $14,315.91
31-Oct-90 $16.84 $0 1579.779 $26,603.48 $11,884.16 832.320 $14,016.27
30-Nov-90 $17.68 $0 1579.779 $27,930.49 $11,884.16 832.320 $14,715.42
07-Dec-90 $17.51 DIV $0 1579.779 $27,661.93 0.410 $1,501.74 $13,385.90 85.764 918.085 $16,075.66
31-Dec-90 $17.63 $0 1579.779 $27,851.50 $13,385.90 918.085 $16,185.83
31-Jan-91 $17.89 $0 1579.779 $28,262.24 $13,385.90 918.085 $16,424.54
28-Feb-91 $18.90 $0 1579.779 $29,857.82 $13,385.90 918.085 $17,351.80
28-Mar-91 $19.29 $0 1579.779 $30,473.93 $13,385.90 918.085 $17,709.86
30-Apr-91 $19.26 $0 1579.779 $30,426.54 $13,385.90 918.085 $17,682.31
31-May-91 $19.75 $0 1579.779 $31,200.63 $13,385.90 918.085 $18,132.17
28-Jun-91 $19.05 $0 1579.779 $30,094.79 $13,385.90 918.085 $17,489.52
01-Jul-91 $18.90 DIV/CG $0 1579.779 $29,857.82 0.345 $1,293.24 $14,679.14 68.426 986.510 $18,645.05
31-Jul-91 $19.16 $0 1579.779 $30,268.56 $14,679.14 986.510 $18,901.54
30-Aug-91 $19.43 $0 1579.779 $30,695.10 $14,679.14 986.510 $19,167.90
30-Sep-91 $19.35 $0 1579.779 $30,568.72 $14,679.14 986.510 $19,088.98
31-Oct-91 $20.13 $0 1579.779 $31,800.95 $14,679.14 986.510 $19,858.45
29-Nov-91 $19.26 $0 1579.779 $30,426.54 $14,679.14 986.510 $19,000.19
06-Dec-91 $18.68 DIV/CG $0 1579.779 $29,510.27 0.380 $1,453.08 $16,132.22 77.788 1064.299 $19,881.10
31-Dec-91 $20.27 $0 1579.779 $32,022.12 $16,132.22 1064.299 $21,573.33
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
CAPITAL GAINS TOTALS
- -------------------------------------------------------------------------------------------------------------------
CG/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh Shares Value Date
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$7,296.41 373.139 $8,529.96 2425.943 $55,457.06 30-Jun-87
$1.230 $2,983.91 $10,280.31 140.552 513.691 $10,905.65 2609.917 $55,408.54 01-Jul-87
$10,280.31 513.691 $11,219.00 2609.917 $57,000.59 31-Jul-87
$10,280.31 513.691 $11,861.11 2609.917 $60,262.98 31-Aug-87
$10,280.31 513.691 $11,496.39 2609.917 $58,409.94 30-Sep-87
$10,280.31 513.691 $8,974.17 2609.917 $45,595.25 30-Oct-87
$10,280.31 513.691 $8,558.08 2609.917 $43,481.22 30-Nov-87
$0.300 $782.98 $11,063.29 48.183 561.874 $9,130.45 2709.495 $44,029.30 11-Dec-87
$11,063.29 561.874 $9,681.08 2709.495 $46,684.60 31-Dec-87
$11,063.29 561.874 $10,355.33 2709.495 $49,936.00 29-Jan-88
$11,063.29 561.874 $10,866.64 2709.495 $52,401.64 29-Feb-88
$11,063.29 561.874 $10,950.92 2709.495 $52,808.06 31-Mar-88
$11,063.29 561.874 $11,035.20 2709.495 $53,214.49 29-Apr-88
$11,063.29 561.874 $10,945.30 2709.495 $52,780.97 31-May-88
$11,063.29 561.874 $11,462.22 2709.495 $55,273.70 30-Jun-88
$0.850 $2,303.07 $13,366.36 119.952 681.825 $13,091.04 2866.138 $55,029.85 01-Jul-88
$13,366.36 681.825 $13,070.59 2866.138 $54,943.87 29-Jul-88
$13,366.36 681.825 $13,022.86 2866.138 $54,743.24 31-Aug-88
$13,366.36 681.825 $13,411.50 2866.138 $56,376.93 30-Sep-88
$13,366.36 681.825 $13,622.87 2866.138 $57,265.44 31-Oct-88
$13,366.36 681.825 $13,343.32 2866.138 $56,090.32 30-Nov-88
$0.640 $1,834.33 $15,200.69 96.038 777.863 $14,857.19 3002.692 $57,351.42 09-Dec-88
$15,200.69 777.863 $14,826.08 3002.692 $57,231.31 30-Dec-88
$15,200.69 777.863 $15,642.83 3002.692 $60,384.14 31-Jan-89
$15,200.69 777.863 $15,425.03 3002.692 $59,543.39 28-Feb-89
$15,200.69 777.863 $15,697.28 3002.692 $60,594.33 31-Mar-89
$15,200.69 777.863 $16,358.47 3002.692 $63,146.62 28-Apr-89
$15,200.69 777.863 $16,988.54 3002.692 $65,578.80 31-May-89
$15,200.69 777.863 $16,685.17 3002.692 $64,407.75 30-Jun-89
$1.120 $3,363.02 $18,563.70 167.397 945.261 $18,990.29 3211.939 $64,527.86 03-Jul-89
$18,563.70 945.261 $19,992.27 3211.939 $67,932.51 31-Jul-89
$18,563.70 945.261 $20,729.57 3211.939 $70,437.82 31-Aug-89
$18,563.70 945.261 $20,663.40 3211.939 $70,212.99 29-Sep-89
$18,563.70 945.261 $20,020.63 3211.939 $68,028.87 31-Oct-89
$18,563.70 945.261 $20,521.61 3211.939 $69,731.20 30-Nov-89
$1.370 $4,400.36 $22,964.06 219.579 1164.840 $23,343.38 3500.437 $70,148.75 08-Dec-89
$22,964.06 1164.840 $23,576.35 3500.437 $70,848.84 29-Dec-89
$22,964.06 1164.840 $22,318.33 3500.437 $67,068.37 31-Jan-90
$22,964.06 1164.840 $22,283.38 3500.437 $66,963.35 28-Feb-90
$22,964.06 1164.840 $22,306.68 3500.437 $67,033.36 30-Mar-90
$22,964.06 1164.840 $21,526.23 3500.437 $64,688.07 30-Apr-90
$22,964.06 1164.840 $22,900.75 3500.437 $68,818.58 31-May-90
$22,964.06 1164.840 $22,830.85 3500.437 $68,608.56 29-Jun-90
$0.460 $1,610.20 $24,574.26 85.832 1250.671 $23,462.59 3662.770 $68,713.57 02-Jul-90
$24,574.26 1250.671 $23,325.02 3662.770 $68,310.67 31-Jul-90
$24,574.26 1250.671 $22,024.32 3662.770 $64,501.38 31-Aug-90
$24,574.26 1250.671 $21,511.54 3662.770 $62,999.65 28-Sep-90
$24,574.26 1250.671 $21,061.30 3662.770 $61,681.05 31-Oct-90
$24,574.26 1250.671 $22,111.87 3662.770 $64,757.78 30-Nov-90
$0.000 $0.00 $24,574.26 0.000 1250.671 $21,899.25 3748.535 $65,636.84 07-Dec-90
$24,574.26 1250.671 $22,049.33 3748.535 $66,086.67 31-Dec-90
$24,574.26 1250.671 $22,374.51 3748.535 $67,061.29 31-Jan-91
$24,574.26 1250.671 $23,637.68 3748.535 $70,847.31 28-Feb-91
$24,574.26 1250.671 $24,125.45 3748.535 $72,309.24 28-Mar-91
$24,574.26 1250.671 $24,087.93 3748.535 $72,196.78 30-Apr-91
$24,574.26 1250.671 $24,700.75 3748.535 $74,033.56 31-May-91
$24,574.26 1250.671 $23,825.29 3748.535 $71,409.59 28-Jun-91
$0.035 $131.20 $24,705.46 6.942 1257.613 $23,768.88 3823.902 $72,271.75 01-Jul-91
$24,705.46 1257.613 $24,095.86 3823.902 $73,265.96 31-Jul-91
$24,705.46 1257.613 $24,435.42 3823.902 $74,298.42 30-Aug-91
$24,705.46 1257.613 $24,334.81 3823.902 $73,992.51 30-Sep-91
$24,705.46 1257.613 $25,315.75 3823.902 $76,975.15 31-Oct-91
$24,705.46 1257.613 $24,221.62 3823.902 $73,648.35 29-Nov-91
$0.400 $1,529.56 $26,235.02 81.882 1339.495 $25,021.77 3983.573 $74,413.14 06-Dec-91
$26,235.02 1339.495 $27,151.57 3983.573 $80,747.02 31-Dec-91
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOTAL RETURN PERFORMANCE - SGF
- ----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL DIVIDENDS
- ----------------------------------------------------------------------------------------------------------------------------------
Date N.A.V. Desc. Invstmnt # shares Value Div/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
31-Jan-92 $20.31 $0 1579.779 $32,085.31 $16,132.22 1064.299 $21,615.90
28-Feb-92 $20.47 $0 1579.779 $32,338.07 $16,132.22 1064.299 $21,786.19
31-Mar-92 $20.30 $0 1579.779 $32,069.51 $16,132.22 1064.299 $21,605.26
30-Apr-92 $20.63 $0 1579.779 $32,590.84 $16,132.22 1064.299 $21,956.48
29-May-92 $20.55 $0 1579.779 $32,464.45 $16,132.22 1064.299 $21,871.34
30-Jun-92 $20.23 $0 1579.779 $31,958.93 $16,132.22 1064.299 $21,530.76
01-Jul-92 $19.43 DIV/CG $0 1579.779 $30,695.10 0.265 $1,055.65 $17,187.87 54.331 1118.629 $21,734.97
31-Jul-92 $19.87 $0 1579.779 $31,390.21 $17,187.87 1118.629 $22,227.17
31-Aug-92 $19.49 $0 1579.779 $30,789.89 $17,187.87 1118.629 $21,802.09
30-Sep-92 $19.61 $0 1579.779 $30,979.46 $17,187.87 1118.629 $21,936.32
31-Oct-92 $19.68 $0 1579.779 $31,090.05 $17,187.87 1118.629 $22,014.63
30-Nov-92 $20.28 $0 1579.779 $32,037.91 $17,187.87 1118.629 $22,685.80
15-Dec-92 $20.09 DIV/CG $0 1579.779 $31,737.76 0.300 $1,255.96 $18,443.83 62.517 1181.146 $23,729.23
31-Dec-92 $20.19 $0 1579.779 $31,895.73 $18,443.83 1181.146 $23,847.34
29-Jan-93 $20.14 $0 1579.779 $31,816.75 $18,443.83 1181.146 $23,788.28
26-Feb-93 $20.32 $0 1579.779 $32,101.11 $18,443.83 1181.146 $24,000.89
31-Mar-93 $20.91 $0 1579.779 $33,033.18 $18,443.83 1181.146 $24,697.77
30-Apr-93 $20.70 $0 1579.779 $32,701.42 $18,443.83 1181.146 $24,449.73
28-May-93 $20.89 $0 1579.779 $33,001.58 $18,443.83 1181.146 $24,674.14
30-Jun-93 $20.80 $0 1579.779 $32,859.40 $18,443.83 1181.146 $24,567.84
01-Jul-93 $20.23 DIV/CG $0 1579.779 $31,958.93 0.260 $1,109.63 $19,553.47 54.851 1235.997 $25,004.22
30-Jul-93 $20.16 $0 1579.779 $31,848.34 $19,553.47 1235.997 $24,917.70
31-Aug-93 $21.30 $0 1579.779 $33,649.29 $19,553.47 1235.997 $26,326.74
30-Sep-93 $21.24 $0 1579.779 $33,554.50 $19,553.47 1235.997 $26,252.58
29-Oct-93 $21.31 $0 1579.779 $33,665.09 $19,553.47 1235.997 $26,339.10
30-Nov-93 $20.78 $0 1579.779 $32,827.80 $19,553.47 1235.997 $25,684.02
13-Dec-93 $20.06 DIV/CG $0 1579.779 $31,690.36 0.250 $1,096.75 $20,650.22 54.674 1290.671 $25,890.85
31-Dec-93 $20.05 $0 1579.779 $31,674.57 $20,650.22 1290.671 $25,877.95
31-Jan-94 $20.66 $0 1579.779 $32,638.23 $20,650.22 1290.671 $26,665.26
28-Feb-94 $20.32 $0 1579.779 $32,101.11 $20,650.22 1290.671 $26,226.43
31-Mar-94 $19.84 $0 1579.779 $31,342.81 $20,650.22 1290.671 $25,606.91
29-Apr-94 $20.28 $0 1579.779 $32,037.91 $20,650.22 1290.671 $26,174.80
31-May-94 $20.65 $0 1579.779 $32,622.43 $20,650.22 1290.671 $26,652.35
30-Jun-94 $20.57 $0 1579.779 $32,496.05 $20,650.22 1290.671 $26,549.09
01-Jul-94 $19.25 DIV/CG $0 1579.779 $30,410.74 0.260 $1,188.95 $21,839.17 61.764 1352.434 $26,034.36
29-Jul-94 $19.70 $0 1579.779 $31,121.64 $21,839.17 1352.434 $26,642.96
31-Aug-94 $20.96 $0 1579.779 $33,112.16 $21,839.17 1352.434 $28,347.03
30-Sep-94 $20.66 $0 1579.779 $32,638.23 $21,839.17 1352.434 $27,941.30
31-Oct-94 $20.39 $0 1579.779 $32,211.69 $21,839.17 1352.434 $27,576.14
30-Nov-94 $19.79 $0 1579.779 $31,263.82 $21,839.17 1352.434 $26,764.68
12-Dec-94 $19.21 DIV/CG $0 1579.779 $30,347.55 0.280 $1,373.20 $23,212.37 71.484 1423.918 $27,353.47
30-Dec-94 $19.61 $0 1579.779 $30,979.46 $23,212.37 1423.918 $27,923.03
31-Jan-95 $19.75 $0 1579.779 $31,200.63 $23,212.37 1423.918 $28,122.38
28-Feb-95 $20.54 $0 1579.779 $32,448.66 $23,212.37 1423.918 $29,247.28
31-Mar-95 $21.17 $0 1579.779 $33,443.92 $23,212.37 1423.918 $30,144.35
28-Apr-95 $21.59 $0 1579.779 $34,107.42 $23,212.37 1423.918 $30,742.39
31-May-95 $22.35 $0 1579.779 $35,308.06 $23,212.37 1423.918 $31,824.57
30-Jun-95 $22.77 $0 1579.779 $35,971.56 $23,212.37 1423.918 $32,422.62
03-Jul-95 $21.88 DIV/CG $0 1579.779 $34,565.56 0.260 $1,302.99 $24,515.37 59.552 1483.470 $32,458.32
31-Jul-95 $22.75 $0 1579.779 $35,939.97 $24,515.37 1483.470 $33,748.94
31-Aug-95 $23.13 $0 1579.779 $36,540.28 $24,515.37 1483.470 $34,312.66
29-Sep-95 $23.77 $0 1579.779 $37,551.34 $24,515.37 1483.470 $35,262.08
31-Oct-95 $23.35 $0 1579.779 $36,887.84 $24,515.37 1483.470 $34,639.02
30-Nov-95 $25.17 $0 1579.779 $39,763.03 $24,515.37 1483.470 $37,338.94
15-Dec-95 $24.90 DIV/CG $0 1579.779 $39,336.49 0.280 $1,464.47 $25,979.84 58.814 1542.284 $38,402.87
29-Dec-95 $25.33 $0 1579.779 $40,015.80 $25,979.84 1542.284 $39,066.05
31-Jan-96 $25.94 $0 1579.779 $40,979.46 $25,979.84 1542.284 $40,006.85
29-Feb-96 $26.21 $0 1579.779 $41,406.00 $25,979.84 1542.284 $40,423.26
29-Mar-96 $26.73 $0 1579.779 $42,227.49 $25,979.84 1542.284 $41,225.25
30-Apr-96 $26.88 $0 1579.779 $42,464.45 $25,979.84 1542.284 $41,456.59
31-May-96 $27.18 $0 1579.779 $42,938.39 $25,979.84 1542.284 $41,919.28
28-Jun-96 $26.48 $0 1579.779 $41,832.54 $25,979.84 1542.284 $40,839.68
01-Jul-96 $25.23 DIV/CG $0 1579.779 $39,857.82 0.27 $1,442.23 $27,422.06 57.163 1599.447 $40,354.05
31-Jul-96 $24.27 $0 1579.779 $38,341.23 $27,422.06 1599.447 $38,818.58
31-Aug-96 $24.56 $0 1579.779 $38,799.37 $27,422.06 1599.447 $39,282.42
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
CAPITAL GAINS TOTALS
- -----------------------------------------------------------------------------------------------------------
CG/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh Shares Value Date
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$26,235.02 1339.495 $27,205.15 3983.573 $80,906.36 31-Jan-92
$26,235.02 1339.495 $27,419.47 3983.573 $81,543.73 28-Feb-92
$26,235.02 1339.495 $27,191.75 3983.573 $80,866.52 31-Mar-92
$26,235.02 1339.495 $27,633.78 3983.573 $82,181.10 30-Apr-92
$26,235.02 1339.495 $27,526.63 3983.573 $81,862.42 29-May-92
$26,235.02 1339.495 $27,097.99 3983.573 $80,587.67 30-Jun-92
$0.725 $2,888.09 $29,123.11 148.641 1488.136 $28,914.48 4186.544 $81,344.55 01-Jul-92
$29,123.11 1488.136 $29,569.26 4186.544 $83,186.63 31-Jul-92
$29,123.11 1488.136 $29,003.77 4186.544 $81,595.74 31-Aug-92
$29,123.11 1488.136 $29,182.35 4186.544 $82,098.13 30-Sep-92
$29,123.11 1488.136 $29,286.51 4186.544 $82,391.19 31-Oct-92
$29,123.11 1488.136 $30,179.40 4186.544 $84,903.11 30-Nov-92
$0.090 $376.79 $29,499.90 18.755 1506.891 $30,273.44 4267.816 $85,740.42 15-Dec-92
$29,499.90 1506.891 $30,424.13 4267.816 $86,167.20 31-Dec-92
$29,499.90 1506.891 $30,348.78 4267.816 $85,953.81 29-Jan-93
$29,499.90 1506.891 $30,620.02 4267.816 $86,722.02 26-Feb-93
$29,499.90 1506.891 $31,509.09 4267.816 $89,240.03 31-Mar-93
$29,499.90 1506.891 $31,192.64 4267.816 $88,343.79 30-Apr-93
$29,499.90 1506.891 $31,478.95 4267.816 $89,154.68 28-May-93
$29,499.90 1506.891 $31,343.33 4267.816 $88,770.57 30-Jun-93
$0.305 $1,301.68 $30,801.58 64.344 1571.235 $31,786.09 4387.011 $88,749.23 01-Jul-93
$30,801.58 1571.235 $31,676.10 4387.011 $88,442.14 30-Jul-93
$30,801.58 1571.235 $33,467.31 4387.011 $93,443.33 31-Aug-93
$30,801.58 1571.235 $33,373.04 4387.011 $93,180.11 30-Sep-93
$30,801.58 1571.235 $33,483.02 4387.011 $93,487.21 29-Oct-93
$30,801.58 1571.235 $32,650.27 4387.011 $91,162.09 30-Nov-93
$0.600 $2,632.21 $33,433.79 131.217 1702.452 $34,151.18 4572.901 $91,732.40 13-Dec-93
$33,433.79 1702.452 $34,134.16 4572.901 $91,686.67 31-Dec-93
$33,433.79 1702.452 $35,172.66 4572.901 $94,476.14 31-Jan-94
$33,433.79 1702.452 $34,593.82 4572.901 $92,921.36 28-Feb-94
$33,433.79 1702.452 $33,776.65 4572.901 $90,726.36 31-Mar-94
$33,433.79 1702.452 $34,525.72 4572.901 $92,738.44 29-Apr-94
$33,433.79 1702.452 $35,155.63 4572.901 $94,430.41 31-May-94
$33,433.79 1702.452 $35,019.44 4572.901 $94,064.58 30-Jun-94
$1.135 $5,190.24 $38,624.03 269.623 1972.075 $37,962.44 4904.288 $94,407.55 01-Jul-94
$38,624.03 1972.075 $38,849.88 4904.288 $96,614.48 29-Jul-94
$38,624.03 1972.075 $41,334.69 4904.288 $102,793.88 31-Aug-94
$38,624.03 1972.075 $40,743.07 4904.288 $101,322.59 30-Sep-94
$38,624.03 1972.075 $40,210.61 4904.288 $99,998.44 31-Oct-94
$38,624.03 1972.075 $39,027.36 4904.288 $97,055.86 30-Nov-94
$0.140 $686.60 $39,310.63 35.742 2007.817 $38,570.16 5011.514 $96,271.18 12-Dec-94
$39,310.63 2007.817 $39,373.29 5011.514 $98,275.78 30-Dec-94
$39,310.63 2007.817 $39,654.38 5011.514 $98,977.39 31-Jan-95
$39,310.63 2007.817 $41,240.56 5011.514 $102,936.49 28-Feb-95
$39,310.63 2007.817 $42,505.48 5011.514 $106,093.74 31-Mar-95
$39,310.63 2007.817 $43,348.76 5011.514 $108,198.58 28-Apr-95
$39,310.63 2007.817 $44,874.70 5011.514 $112,007.33 31-May-95
$39,310.63 2007.817 $45,717.99 5011.514 $114,112.17 30-Jun-95
$0.695 $3,483.00 $42,793.64 159.187 2167.003 $47,414.03 5230.252 $114,437.91 03-Jul-95
$42,793.64 2167.003 $49,299.32 5230.252 $118,988.23 31-Jul-95
$42,793.64 2167.003 $50,122.79 5230.252 $120,975.73 31-Aug-95
$42,793.64 2167.003 $51,509.67 5230.252 $124,323.09 29-Sep-95
$42,793.64 2167.003 $50,599.53 5230.252 $122,126.38 31-Oct-95
$42,793.64 2167.003 $54,543.47 5230.252 $131,645.44 30-Nov-95
$0.250 $1,307.56 $44,101.20 52.513 2219.516 $55,265.94 5341.579 $133,005.31 15-Dec-95
$44,101.20 2219.516 $56,220.34 5341.579 $135,302.19 29-Dec-95
$44,101.20 2219.516 $57,574.24 5341.579 $138,560.55 31-Jan-96
$44,101.20 2219.516 $58,173.51 5341.579 $140,002.78 29-Feb-96
$44,101.20 2219.516 $59,327.66 5341.579 $142,780.40 29-Mar-96
$44,101.20 2219.516 $59,660.59 5341.579 $143,581.64 30-Apr-96
$44,101.20 2219.516 $60,326.44 5341.579 $145,184.11 31-May-96
$44,101.20 2219.516 $58,772.78 5341.579 $141,445.00 28-Jun-96
1.21 $6,463.31 $50,564.51 256.176 2475.691 $62,461.69 5654.917 $142,673.57 01-Jul-96
$50,564.51 2475.691 $60,085.03 5654.917 $137,244.85 31-Jul-96
$50,564.51 2475.691 $60,802.98 5654.917 $138,884.77 31-Aug-96
</TABLE>
<PAGE>
TOTAL RETURN PERFORMANCE-SGF
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL DIVIDENDS
- -----------------------------------------------------------------------------------------------------------------------------------
Date N.A.V. Desc. Invstmnt # Shares Value Div/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30-Sep-96 $25.59 $0 1579.779 $40,426.54 $27,422.06 1599.447 $40,929.85
31-Oct-96 $25.95 $0 1579.779 $40,995.26 $27,422.06 1599.447 $41,505.65
29-Nov-96 $27.36 $0 1579.779 $43,222.75 $27,422.06 1599.447 $43,760.87
16-Dec-96 $26.35 DIV/CG $0 1579.779 $41,627.17 0.31 $1,753.02 $29,175.09 66.528 1665.976 $43,898.46
31-Dec-96 $27.00 $0 1579.779 $42,654.03 $29,175.09 1665.976 $44,981.34
<CAPTION>
- -------------------------------------------------------------------------------------------------------
CAPITAL GAINS TOTALS
- -------------------------------------------------------------------------------------------------------
CG/Sh Total $ Cuml $ Sh Reinv Cuml Sh Value Sh Shares Value Date
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$50,564.51 2475.691 $63,352.94 5654.917 $144,709.34 30-Sep-96
$50,564.51 2475.691 $64,244.19 5654.917 $146,745.11 31-Oct-96
$50,564.51 2475.691 $67,734.92 5654.917 $154,718.54 29-Nov-96
0.00 $0.00 $50,564.51 0.000 2475.691 $65,234.47 5721.446 $150,760.10 16-Dec-96
$50,564.51 2475.691 $66,843.67 5721.446 $154,479.04 31-Dec-96
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
PERFORMANCE AVERAGE ANNUAL
- --------------------------------------------------------------------------------------------------------------------------
1 year FYTD Agg. Incept 3 Year 5 Year 10 Year 15 Year 20 Year Since Incep
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
29.62% 29.62% 1351.84%
23.95% -2.58% 1314.45%
24.67% -1.73% 1326.74%
15.34% -5.47% 1272.45%
14.80% -4.34% 1288.85%
16.40% -0.33% 1347.09%
20.16% 1.08% 1367.45%
17.53% 6.57% 1447.19%
13.35% 3.84% 1407.60%
14.17% 6.40% 1444.79% 18.99% 13.85% 12.27% 14.02% 12.92% 11.94% 0.04
</TABLE>
<PAGE>
Exhibit 18
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as James W. Stratton might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
-------------------------------------
James W. Stratton
Chairman of the Board of Directors
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by James W. Stratton, Chairman of the Board of Directors of the Stratton
Growth Fund, Inc.
- ---------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
----------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as Lynne M. Cannon might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of May, 1995.
--------------------------------------
Lynne M. Cannon
Director
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of May,
1995 by Lynne M. Cannon, Director of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as John J. Lombard, Jr. might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
-------------------------------------
John J. Lombard, Jr.
Director
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by John J. Lombard, Jr., Director of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as Rose J. Randall might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
-------------------------------------
Rose J. Randall
Director
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by Rose J. Randall, Director of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as Henry A. Rentschler might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
-------------------------------------
Henry A. Rentschler
Director
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by Henry A. Rentschler, Director of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as Alexander F. Smith might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
-------------------------------------
Alexander F. Smith
Director
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by Alexander F. Smith, Director of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as Richard W. Stevens might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
--------------------------------------
Richard W. Stevens
Director
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by Richard W. Stevens, Director of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as John A. Affleck might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
--------------------------------------
John A. Affleck
President
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by John A. Affleck, President of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as Merritt N. Rhoad, Jr. might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
-------------------------------------
Merritt N. Rhoad, Jr.
Director
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by Merritt N. Rhoad, Jr., Director of the Stratton Growth Fund, Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<PAGE>
===================
POWER OF ATTORNEY
===================
KNOW ALL MEN BY THESE PRESENTS, that the undersigned constitutes and appoints
Joseph M. O'Donnell, Gerald J. Holland, and William J. Baltrus and each of them,
with full power to act without the other, as true and lawful attorney-in-fact
and agent, with full and several power of substitution, to sign any Post-
Effective Amendment to the Registration Statement of the Stratton Growth Fund,
Inc. (the "Fund") to be filed with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission; granting to such
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act requisite and necessary to be done in connection
therewith, as fully as Patricia L. Sloan might or could do in person, hereby
ratifying and confirming all that such attorneys-in-fact and agents or any of
them, or their or his/her substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney on the
____ day of March, 1995.
--------------------------------------
Patrica L. Sloan
Secretary and Treasurer
ACKNOWLEDGEMENT
---------------
State of ________________ )
) ss:
County of ________________ )
The foregoing instrument was acknowledged before me on this ____ day of March,
1995 by Patricia L. Sloan, Secretary and Treasurer of the Stratton Growth Fund,
Inc.
- ----------------------------------------------
NOTARY PUBLIC
In and for the County of
------------------
State of
---------------------
My Commission Expires:
------------------
(NOTARIAL SEAL)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000094825
<NAME> STRATTON GROWTH FUND, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 7-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 30,575
<INVESTMENTS-AT-VALUE> 44,722
<RECEIVABLES> 67
<ASSETS-OTHER> 71
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 44,860
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 59
<TOTAL-LIABILITIES> 59
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,901
<SHARES-COMMON-STOCK> 1,659
<SHARES-COMMON-PRIOR> 1,577
<ACCUMULATED-NII-CURRENT> 9
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 744
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,147
<NET-ASSETS> 44,801
<DIVIDEND-INCOME> 684
<INTEREST-INCOME> 120
<OTHER-INCOME> 0
<EXPENSES-NET> 290
<NET-INVESTMENT-INCOME> 514
<REALIZED-GAINS-CURRENT> 750
<APPREC-INCREASE-CURRENT> 1,415
<NET-CHANGE-FROM-OPS> 2,679
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 936
<DISTRIBUTIONS-OF-GAINS> 1,910
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 84
<NUMBER-OF-SHARES-REDEEMED> 98
<SHARES-REINVESTED> 96
<NET-CHANGE-IN-ASSETS> 1,921
<ACCUMULATED-NII-PRIOR> 431
<ACCUMULATED-GAINS-PRIOR> 1,904
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 178
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 290
<AVERAGE-NET-ASSETS> 42,616
<PER-SHARE-NAV-BEGIN> 27.18
<PER-SHARE-NII> 0.312
<PER-SHARE-GAIN-APPREC> 1.298
<PER-SHARE-DIVIDEND> 0.580
<PER-SHARE-DISTRIBUTIONS> 1.210
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 27.0
<EXPENSE-RATIO> 1.17
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
