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Strong Large Cap Growth Fund Inc, et al. – ‘497’ on 1/3/05

On:  Monday, 1/3/05, at 1:09pm ET   ·   Effective:  1/3/05   ·   Accession #:  840519-5-4   ·   File #s:  2-73967, 2-73968, 2-99752, 33-01932, 33-17450, 33-45108, 33-61358, 33-70762, 33-70764

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 1/03/05  Strong Large Cap Growth Fund Inc  497         1/03/05    1:55K                                    Strong Advantage Fd Inc
          Strong Opportunity Fund Inc
          Strong Equity Funds II Inc
          Strong Discovery Fund Inc
          Strong International Equity Funds Inc
          Strong Balanced Fund Inc
          Strong Conservative Equity Funds Inc
          Strong Asia Pacific Fund Inc
          Strong Equity Funds Inc

Definitive Material   —   Rule 497
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 497         Growth Merger Sticker                                 17±    75K 

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PLEASE FILE THIS STATEMENT OF ADDITIONAL INFORMATION SUPPLEMENT WITH YOUR RECORDS. STRONG ASIA PACIFIC FUND STRONG BALANCED FUND STRONG BLUE CHIP FUND STRONG DISCOVERY FUND STRONG DIVIDEND INCOME FUND STRONG DOW 30 VALUE FUND STRONG ENDEAVOR FUND STRONG ENERGY FUND STRONG ENTERPRISE FUND STRONG GROWTH FUND STRONG GROWTH 20 FUND STRONG GROWTH AND INCOME FUND STRONG LARGE CAP CORE FUND STRONG LARGE CAP GROWTH FUND STRONG LARGE COMPANY GROWTH FUND STRONG MID CAP DISCIPLINED FUND STRONG MULTI CAP VALUE FUND STRONG OPPORTUNITY FUND STRONG OVERSEAS FUND STRONG SMALL COMPANY VALUE FUND STRONG SMALL/MID CAP VALUE FUND STRONG STRATEGIC VALUE FUND STRONG TECHNOLOGY 100 FUND STRONG U.S. EMERGING GROWTH FUND STRONG VALUE FUND Supplement to the Statement of Additional Information dated May 1, 2004 ALL FUNDS Effective January 1, 2005, all references to the "Advisor" refer to Wells Fargo Funds Management, LLC, and all references to "Sub-advisor" refer either to Wells Capital Management Incorporated, Peregrine Capital Management, Inc., RCM Capital Management LLC, New Star Institutional Managers Limited, or Matrix Asset Advisors, Inc., as applicable. Effective January 1, 2005, R. Michael Parker and Dana J. Russart are added to the Directors and Officers table, as shown below, and Richard W. Smirl, Gilbert L. Southwell, and Thomas M. Zoeller are deleted from the table. [Enlarge/Download Table] --------------------------- -------------------- --------------- ---------------------------------- ------------------ DATE FIRST ELECTED OR CERTAIN OTHER POSITIONS HELD APPOINTED TO PRINCIPAL OCCUPATIONS DURING DIRECTORSHIPS NAME, ADDRESS, AND AGE WITH FUNDS OFFICE PAST 5 YEARS HELD --------------------------- -------------------- --------------- ---------------------------------- ------------------ R. Michael Parker Chief Compliance August 2004 Senior Compliance Examiner with None P.O. Box 2936 Officer the United States Securities and Milwaukee, WI 53201 Exchange Commission from April Age 59 1970 to April 2004. --------------------------- -------------------- --------------- ---------------------------------- ------------------ Dana J. Russart Vice President January 2005 Vice President of Strong None P.O. Box 2936 Financial Corporation since Milwaukee, WI 53201 December 2002; Secretary of Age 46 Strong Investor Services, Inc. since December 2004; Vice President of Strong Investments, Inc. since December 1998; Director of Retail Marketing of Strong Financial Corporation from May 1997 to December 2002. --------------------------- -------------------- --------------- ---------------------------------- ------------------ Effective January 1, 2005, the "INVESTMENT ADVISOR" section, excluding the tables, are deleted and replaced with the following: Wells Fargo Funds Management, LLC ("Advisor") provides investment advisory services for each of the Funds, which involves implementing the investment policies and guidelines for the Funds and supervising the sub-advisor who is responsible for the day-to-day portfolio management of each Fund. The Advisor is an indirect wholly owned subsidiary of Wells Fargo & Company, and was created in early 2001 to succeed to the mutual fund advisory responsibilities of Wells Fargo Bank. On May 25, 2004, Wells Fargo & Company entered into a purchase agreement ("Asset Purchase Agreement") with Strong Financial Corporation ("SFC") to acquire certain of the assets of Strong Capital Management, Inc. ("SCM"), which is an affiliate of SFC and was the previous investment advisor to the Funds. SFC's sale of assets ("Transaction") was contingent upon shareholder approval of the reorganization of each Fund into a Wells Fargo Fund ("Reorganization") for a substantial percentage of the assets covered by the Asset Purchase Agreement, among other things. On August 13, 2004, the Board approved, and on December 10, 2004, or December 22, 2004, the Fund shareholders approved 1) the Reorganization 2) an interim investment advisory agreement ("Interim Agreement") between the Advisor and the Fund to replace SCM as investment advisor to the Fund, and 3) an interim sub-advisory agreement with Wells Capital Management Incorporated, Peregrine Capital Management, Inc., New Star Institutional Managers Limited, Matrix Asset Advisors, Inc., or RCM Capital Management LLC ("Sub-advisor"), the Advisor, and the Fund ("Interim Sub-advisory Agreement") The Interim Agreement is required to be approved annually by either the Board or by vote of a majority of the Fund's outstanding voting securities (as defined in the 1940 Act). Each annual renewal must be approved by the vote of a majority of the Fund's Directors who are not parties to the Interim Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. The Interim Agreement is terminable, without penalty, on 60 days' written notice by the Board by vote of a majority of the Fund's outstanding voting securities, or by the Advisor, and will terminate automatically in the event of its assignment. The Interim Agreement will terminate as of the effective date of the Reorganization. In considering the Interim Agreement, the Board was provided materials relating to, and considered and evaluated, with respect to the Fund, (i) the terms of the Interim Agreement, including the nature and scope of services to be provided by the Advisor; (ii) that the fees and expenses that would be paid by the Fund under the Interim Agreement would be the same as those paid to SCM under the then current investment advisory agreement; (iii) the management fee rates and payment arrangements, (iv) the historical investment performance of the Fund and Wells Fargo Funds with similar investment objectives, as compared to the performance of other funds currently available in the market not advised or managed by the Advisor, but having a similar investment focus and asset composition; (v) the ability of the Advisor to provide high quality investment advisory services to the Fund, in light of the experience and qualifications of the Advisor and its personnel and the terms of the Interim Agreement; (vi) that the Sub-advisor was expected to employ a significant number of key SCM portfolio managers and other personnel as of the closing of the Transaction; (vii) information provided by the Advisor relating to inquiries and investigations regarding matters such as the trading of mutual fund shares and sales practices relating to mutual fund shares, and investigations of unaffiliated third parties; and (viii) the terms of the Reorganization. The Board also took into account all considerations taken into account in determining to approve the Reorganization. On the basis of its review and analysis of the foregoing information, the Board found that the terms of the Interim Agreement were fair and reasonable and in the best interest of shareholders. The Board approved certain compliance policies and procedures of the Advisor on September 29, 2004. CODE OF ETHICS The Advisor and each of the Sub-advisors have adopted a code of ethics, which contains policies on personal securities transactions by "access persons." These policies comply with Rule 17j-1 under the 1940 Act. Each code of ethics, among other things, permits access persons to invest in certain securities, subject to various restrictions and requirements. More specifically, each code of ethics either prohibits its access persons from purchasing or selling securities that may be purchased or held by a Fund or permits such access persons to purchase or sell such securities, subject to certain restrictions. For purposes of a code of ethics, an access person means (i) a director, trustee or officer of a fund or advisor; (ii) any employee of a fund or advisor (or any company in a control relationship to a fund or investment advisor) who, in connection makes, participates in, or obtains information about the purchase or sale of securities by a fund, or whose functions relate to the making of any recommendations with respect to the purchases or sales; and (iii) any natural person in a control relationship to a fund or investment advisor who obtains information concerning recommendations made to a fund regarding the purchase or sale of securities. Portfolio managers and other persons who assist in the investment process are subject to additional restrictions under Rule 17j-1. The above restrictions do not apply to purchases or sales of certain types of securities, including shares of open-end investment companies that are unaffiliated with the Strong Funds family, money market instruments and certain U.S. Government securities. To facilitate enforcement, the codes of ethics generally require that an access person, other than "disinterested" directors or trustees, submit reports to a designated compliance person regarding transactions involving securities which are eligible for purchase by a Fund. The codes of ethics for the Advisor and the Sub-advisors are on public file with, and available from, the SEC. DISCLOSURE OF FUND PORTFOLIO HOLDINGS The Advisor has adopted policies and procedures to govern the disclosure of portfolio holdings and any ongoing arrangements to make available information about portfolio holdings for the Funds. Under no circumstances do the Advisor or the Funds receive any compensation in return for the disclosure of information about a Fund's portfolio securities or for any ongoing arrangements to make available information about a Fund's portfolio securities. As required by the SEC, each Fund (except money market funds) files its complete portfolio holdings schedule in public filings made with the SEC on a quarterly basis. Each mutual fund (including money market funds) is required to file its complete portfolio schedules for the second and fourth fiscal quarter on Form N-CSR, and each mutual fund (except money market funds) is required to file its complete portfolio schedules for the first and third fiscal quarters on Form N-Q, in each instance within 60 days of the end of the fund's fiscal quarter. Through Form N-CSR and Form N-Q filings made with the SEC, the Funds' full portfolio holdings are publicly available to shareholders on a quarterly basis. Such filings are made on or shortly before the 60th day following the end of a fiscal quarter. Full holdings are also made available as of the end of a month and are posted on the Funds' website (www.strong.com) after a one-month lag. In addition, top ten holdings information for the Funds is publicly available on the Funds' website (www.strong.com) on a quarterly, 30-day delayed basis. Each Fund's complete portfolio schedule for the second and fourth fiscal quarter, required to be filed on Form N-CSR, is delivered to shareholders in the Fund's semiannual and annual reports. Each Fund's complete portfolio schedule for the first and third fiscal quarters, required to be filed on Form N-Q, will not be delivered to shareholders. Each Fund, however, includes appropriate disclosure in its semiannual and annual reports as to how a shareholder may obtain holdings information for the Fund's first and third fiscal quarters. LIST OF APPROVED RECIPIENTS. Below is a list that describes the limited circumstances in which a Fund's portfolio holdings are disclosed to selected third parties in advance of their inclusion in the quarterly filings made with the SEC on Form N-CSR and Form N-Q. In each instance, a determination has been made that such advance disclosure is supported by a legitimate business purpose and that the recipients, where feasible, are subject to an independent duty not to disclose or trade on the nonpublic information. A. PORTFOLIO MANAGERS. Portfolio managers shall have full daily access to fund holdings for the Fund(s) for which they have direct management responsibility. Portfolio managers may also release and discuss portfolio holdings with various broker/dealers for purposes of analyzing the impact of existing and future market changes on the prices, availability/demand and liquidity of such securities, as well as for the purpose of assisting portfolio managers in the trading of such securities. B. ADVISOR. In its capacity as investment advisor to the Funds, certain Advisor personnel that deal directly with the processing, settlement, review, control, auditing, reporting, and/or valuation of portfolio trades shall have full daily access to Fund portfolio holdings. C. ADMINISTRATOR. In its capacity as administrator to the Funds, certain Strong Investor Services, Inc. personnel that deal directly with the processing, settlement, review, control, auditing, reporting, and/or valuation of portfolio trades shall have full daily access to Fund portfolio holdings. D. EXTERNAL SERVICING AGENTS. Appropriate personnel employed by entities that assist in the review and/or processing of Fund portfolio transactions, which include the fund accounting agent, the custodian and the trading settlement desk at Wells Capital Management Incorporated, shall have daily access to all Fund portfolio holdings. The Advisor utilizes the services of Institutional Shareholder Services ("ISS") and SG Constellation to assist with proxy voting and Class B share financing, respectively. Both ISS and SG Constellation may receive full Fund portfolio holdings on a weekly basis for the Funds for which they provide services. E. RATING AGENCIES. Standard & Poor's ("S&P") and Moody's Investors Services ("Moody's") receive full Fund holdings for rating purposes. S&P receives holdings information weekly on a seven-day delayed basis. Moody's receives holdings information monthly on a seven-day delayed basis. ADDITIONS TO LIST OF APPROVED RECIPIENTS. Any additions to the above list of approved recipients requires approval by the Chief Compliance Officer of the Funds based on a review of: (i) the type of fund involved; (ii) the purpose for receiving the holdings information; (iii) the intended use of the information; (iv) the frequency of the information to be provided; (v) the length of the lag, if any, between the date of the information and the date on which the information will be disclosed; (vi) the proposed recipient's relationship to the Funds; (vii) the ability of the Advisor to monitor that such information will be used by the proposed recipient in accordance with the stated purpose for the disclosure; (viii) whether a confidentiality agreement will be in place with such proposed recipient; and (ix) whether any potential conflicts exist regarding such disclosure between the interests of Fund shareholders, on the one hand, and those of the Fund's investment advisor, principal underwriter, or any affiliated person of the Fund. FOR PROXIES RELATING TO THE FUND'S PORTFOLIO SECURITIES WITH A RECORD DATE ON OR AFTER JANUARY 1, 2005, THE FOLLOWING PROXY VOTING POLICIES AND PROCEDURES ARE APPLICABLE: PROXY VOTING POLICIES AND PROCEDURES The Advisor has adopted policies and procedures ("Procedures") that are used to vote proxies relating to portfolio securities held by the Funds. The Procedures are designed to ensure that proxies are voted in the best interests of Fund shareholders. The responsibility for voting proxies relating to the Funds' portfolio securities has been delegated to the Advisor. In accordance with the Procedures, the Advisor exercises its voting responsibility with the goal of maximizing value to shareholders consistent with governing laws and the investment policies of each Fund. While the Funds do not purchase securities to exercise control or to seek to effect corporate change through share ownership, they support sound corporate governance practices within companies in which they invest and reflect that support through their proxy voting process. The Advisor has established a Proxy Voting Committee (the "Proxy Committee") that is responsible for overseeing the proxy voting process and ensuring that the voting process is implemented in conformance with the Procedures. The Advisor has retained an independent, unaffiliated nationally recognized proxy voting company, as proxy voting agent. The Proxy Committee monitors the proxy voting agent and the voting process and, in certain situations, votes proxies or directs the proxy voting agent how to vote. The Procedures set out guidelines regarding how the Advisor and the proxy voting agent will vote proxies. Where the guidelines specify a particular vote on a particular matter, the proxy voting agent handles the proxy, generally without further involvement by the Proxy Committee. Where the guidelines specify a case-by-case determination, or where a particular issue is not addressed in the guidelines, the proxy voting agent forwards the proxy to the Proxy Committee for a vote determination by the Proxy Committee. In addition, even where the guidelines specify a particular vote, the Proxy Committee may exercise a discretionary vote if it determines that a case-by-case review of a particular matter is warranted. The Procedures set forth the Advisor's general position on various proposals, such as: o ROUTINE ITEMS - The Advisor will generally vote for the ratification of auditors, uncontested director or trustee nominees, changes in company name, and other procedural matters related to annual meetings. o CORPORATE GOVERNANCE - The Advisor will generally vote for charter and bylaw amendments proposed solely to conform with modern business practices or for purposes of simplification. o ANTI-TAKEOVER MATTERS - The Advisor generally will vote for proposals that require shareholder o ratification of poison pills, and on a case-by-case basis on proposals to redeem a company's poison pill. o MERGERS/ACQUISITIONS AND CORPORATE RESTRUCTURINGS - The Advisor's Proxy Committee will examine these items on a case-by-case basis. o SHAREHOLDER RIGHTS - The Advisor will generally vote against proposals that may restrict shareholder rights. In all cases where the Proxy Committee makes the decision regarding how a particular proxy should be voted, the Proxy Committee exercises its voting discretion in accordance with the voting philosophy of the Funds and in the best interests of Fund shareholders. In deciding how to vote, the Proxy Committee may rely on independent research, input and recommendations from third parties including independent proxy services, other independent sources, investment sub-advisors, company managements and shareholder groups as part of its decision-making process. In most cases, any potential conflicts of interest involving the Advisor or any affiliate regarding a proxy are avoided through the strict and objective application of the Funds' voting guidelines. However, when the Proxy Committee is aware of a material conflict of interest regarding a matter that would otherwise be considered on a case-by-case basis by the Proxy Committee, either the Proxy Committee will instruct the proxy voting agent to vote in accordance with the recommendation the proxy voting agent makes to its clients generally, or the Fund's Board will exercise its authority to vote on the matter. In addition, the Proxy Committee does not permit its votes to be influenced by any conflict of interest that exists for any other affiliated person of the Funds (such as a sub-advisor or principal underwriter) and the Proxy Committee votes all such matters without regard to the conflict. The Procedures may reflect voting positions that differ from practices followed by other companies or subsidiaries of Wells Fargo & Company. In order to not hinder possible economic benefits to the Funds and Fund shareholders, the Advisor will generally refrain from voting proxies on foreign securities that are subject to share blocking restrictions. In addition, securities on loan will typically not be recalled to facilitate voting. However, if the Proxy Committee determines that the importance of the matter to be voted upon outweighs any potential loss of benefits or revenue, the security will be recalled for voting. After August 31, 2004, an annual record of all proxy votes cast for the Fund during the most recent 12-month period ended June 30, can be obtained (1) without charge, upon request, by calling 1-800-368-3863, and (2) on the SEC's web site at www.sec.gov, filed on form N-PX. FOR PROXIES RELATING TO THE FUND'S PORTFOLIO SECURITIES WITH A RECORD DATE PRIOR TO JANUARY 1, 2005, THE PREVIOUS INVESTMENT ADVISOR'S PROXY VOTING POLICIES AND PROCEDURES ARE APPLICABLE AS FOLLOWS: PROXY VOTING POLICIES AND PROCEDURES The following summary describes how the Advisor, as investment advisor to the Strong Family of Funds, generally intends to vote on proxy issues for the securities held in Fund portfolios. The Advisor has been delegated the right and the obligation to vote proxies relating to the Funds' portfolio securities, subject to the oversight of the Board. In addition, the Advisor is responsible for establishing proxy voting policies and procedures, and reviewing and updating them as necessary. GENERAL PRINCIPLE. The Advisor votes any proxy or other beneficial interest in an equity security prudently and solely in the best long-term economic interest of advisory clients and their beneficiaries, considering all relevant factors and without undue influence from individuals or groups who may have an economic interest in the outcome of a proxy vote. THE PROXY COMMITTEE. The Advisor has established a Proxy Committee that meets as needed to administer, revise, and update the Proxy Voting Policy. In addition, the Proxy Committee meets when necessary to discuss and determine the votes for issues that do not fall into a category described in the Proxy Voting Policy, applying the general principles noted above. For issues that do not fall within predetermined voting guidelines, the Proxy Committee or its delegates may consult with the Portfolio Manager (or a member of the Portfolio Manager's investment team) of the account holding the relevant security for assistance in determining how to cast the vote. PROCESS. In order to apply the general policy noted above in a timely and consistent manner, the Proxy Committee has delegated its voting authority to a third-party voting service ("Voting Delegate"). Subject to the oversight of the Proxy Committee, the Voting Delegate follows the written voting guidelines provided by the Advisor. The Voting Delegate reviews the issues on each voting ballot and itemizes them according to the written voting guidelines. Based on the standing instructions given by the Advisor to the Voting Delegate regarding how to vote, the Voting Delegate places and records the votes. When the voting policy relating to a specific issue is not clearly defined in the written voting guidelines, the Voting Delegate refers the vote decision to the Advisor for review.
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ROUTINE CORPORATE ADMINISTRATIVE ITEMS. The Advisor generally is willing to vote with management on matters of a routine administrative nature. The Advisor believes management should be allowed to make those decisions that are essential to the ongoing operation of the company and which are not expected to have a major economic impact on the corporation and its shareholders. Examples of issues on which the Advisor will normally vote with management's recommendation include: o Appointment or election of auditors; o Increases in authorized common or preferred shares (unless management intends to use the additional shares to implement a takeover defense, in which case the proposal will be analyzed on a case-by-case basis); o Routine election or re-election of unopposed directors; o Director's liability and indemnification; o Incentive plans, restricted stock plans and bonus plans, when 10% or fewer of the outstanding shares have been allocated to the company's incentive plans, PROVIDED, HOWEVER, the Proxy Committee may approve an allocation over 10% when the members believe such higher percentage is in the best interest of the Advisor's advisory clients given the facts and circumstances surrounding the proposal including, for example, whether a particular industry traditionally requires a company to allocate a higher percentage in order to be competitive; o Stock option plans, when 10% or fewer of the outstanding shares have been allocated to the company's plans, (including subsidiary plans, share option and share award plans, equity incentive plans and share options), PROVIDED, HOWEVER, the Proxy Committee may approve an allocation over 10% when the members believe such higher percentage is in the best interest of the Advisors' advisory clients given the facts and circumstances surrounding the proposal including, for example, whether a particular industry traditionally requires a company to allocate a higher percentage in order to be competitive; o Employee stock purchase or ownership plans; o Name changes; and o The time and location of the annual meeting. The Advisor generally opposes minimum share ownership requirements for directors because the Advisor feels that a director can serve a company well regardless of the extent of his or her share ownership. The Advisor generally abstains from voting for an item denoting "such other business as may come before the meeting" because the Advisor will not vote "for" or "against" issues of which it is not aware. SPECIAL INTEREST ISSUES. While there are many social, religious, political, and other special interest issues that are worthy of public attention, the Advisor believes that the burden of social responsibility generally rests with management. Because the Advisor's primary responsibility in voting proxies is to provide for the greatest long-term shareholder value, the Advisor is generally opposed to special interest proposals that involve an economic cost to the corporation or that restrict the freedom of management to operate in the best interest of the corporation and its shareholders. Accordingly, the Advisor will vote with management's recommendation on issues such as: o Restrictions on military contracting; o Restrictions on the marketing of controversial products; o Restrictions on corporate political activities; o Restrictions on charitable contributions; o Restrictions on doing business with foreign countries; o A general policy regarding human rights; o A general policy regarding employment practices; o A general policy regarding animal rights; o A general policy regarding nuclear power plants; o Compensation plans; and o Rotating the location of the annual meeting among various cities. RESOLVING MATERIAL CONFLICTS OF INTEREST. The SEC rule describes a potential conflict of interest as occurring when there is a vote between the interests of Fund shareholders, on the one hand, and those of the Advisor, principal underwriter, or an affiliated person of the Fund, its Advisor, or principal underwriter, on the other. To eliminate or minimize material conflicts of interest, the Advisor may follow one or more of the following procedures: a) use predetermined voting guidelines, b) use the recommendations of an independent third party, or c) refer conflicts of interest to the Proxy Committee for a decision. PROXY VOTING RECORD RETENTION. The Advisor retains the following records for a minimum of five years: (1) proxy voting policies and procedures; (2) proxy statements; (3) records of votes cast on behalf of clients; (4) records of clients' requests for proxy voting information; and (5) any documents prepared on behalf of the Advisor that were material in making the decision on how to vote. After August 31, 2004, an annual record of all proxy votes cast for the Fund during the most recent 12-month period ended June 30, can be obtained (1) without charge, upon request, by calling 1-800-368-3863, and (2) on the SEC's web site at www.sec.gov, filed on form N-PX. Effective January 1, 2005, the following paragraphs are added to the "INVESTMENT SUB-ADVISORS" section: Effective January 1, 2005, the Advisor has engaged Wells Capital Management Incorporated, Peregrine Capital Management, Inc., RCM Capital Management LLC, New Star Institutional Managers Limited, and Matrix Asset Advisors, Inc., (individually a "Sub-advisor") to serve as investment Sub-advisors to the Funds as listed in the tables below. Subject to the direction of the Board and the overall supervision and control of the Advisor, the Sub-advisor is responsible for the day-to-day investment and management of the Funds' assets. The Sub-advisor furnishes to the Advisor periodic reports on the investment activity and performance of the Funds, as well as such additional reports and information as the Advisor or the Board and officers may reasonably request. Under each Interim Sub-advisory Agreement, ("Sub-advisory Agreement") the Sub-advisor is responsible for investment decisions and supplies investment research and portfolio management services. The Sub-advisor is responsible for the purchase and sale of securities for the Funds, broker-dealer selection, and negotiation of brokerage commission rates. The Funds shall bear all expenses incurred by each sub-advisor in connection with the provisions of services under each Interim Sub-advisory Agreement. Each Interim Sub-advisory Agreement shall become effective with respect to a Fund after it is approved in accordance with the requirements of the 1940 Act and executed by the Fund. Once approved, each Interim Sub-advisory Agreement is required to be approved annually by either the Board or by vote of a majority of the Fund's outstanding voting securities (as defined in the 1940 Act). In either case, each annual renewal must be approved by the vote of a majority of the Fund's Directors who are not parties to the Interim Sub-advisory Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Each Interim Sub-advisory Agreement is terminable, without penalty, on 60 days' written notice by the Board by vote of a majority of the Fund's outstanding voting securities, or by the Advisor or Sub-advisor, and will terminate automatically in the event of its assignment. The Sub-advisory Agreement will terminate as of the effective date of the Reorganization. In considering the Interim Sub-advisory Agreement, the Board was provided materials relating to, and considered and evaluated, with respect to the Fund, (i) the terms of the Interim Sub-advisory Agreement; (ii) that the fees under the Interim Sub-advisory Agreement would be paid by the Advisor; and (iii) that the Sub-advisor is expected to employ a significant number of key SCM portfolio managers and other personnel as of the closing of the Transaction; and (iv) the terms of the Reorganization. On the basis of its review and analysis of the foregoing, among other things, the Board found that the terms of the Interim Sub-advisory Agreement were fair and reasonable and in the best interest of shareholders. The Board approved certain compliance policies and procedures of the Sub-advisor on September 29, 2004. As compensation for its sub-advisory services to each Fund, the Sub-advisor is entitled to a fee based on the following fee schedule: [Enlarge/Download Table] ---------------------------- ---------------------------------- -------------------------------- ----------- FUND SUB-ADVISOR FUND ASSETS FEE ---------------------------- ---------------------------------- -------------------------------- ----------- Asia Pacific Wells Capital Management $0-200 million 0.45% Incorporated Over $200 million 0.35% ---------------------------- ---------------------------------- -------------------------------- ----------- Balanced Wells Capital Management $0-1,000 million 0.25% Incorporated Over $1,000 million 0.20% ---------------------------- ---------------------------------- -------------------------------- ----------- Discovery Wells Capital Management $0-200 million 0.35% Enterprise Incorporated Over $200 million 0.30% Mid Cap Disciplined Multi Cap Value Opportunity Small Company Value Small/Mid Cap Value U.S. Emerging Growth ---------------------------- ---------------------------------- -------------------------------- ----------- Dividend Income Wells Capital Management $0-200 million 0.35% Dow 30 Value Incorporated Next $200 million 0.30% Endeavor Over $400 million 0.25% Energy Growth 20 Growth Large Cap Growth Large Company Growth Strategic Value ---------------------------- ---------------------------------- -------------------------------- ----------- Blue Chip Peregrine Capital Management, $0-25 million 0.75% Inc. More than $25 million but less than or equal to $50 million 0.60% More than $50 million but less than or equal to $275 million 0.50% Greater than $275 million 0.30% ---------------------------- ---------------------------------- -------------------------------- ----------- Overseas New Star Institutional Managers $0-50 million 0.35% Limited Next $500 million 0.29% Over $550 million 0.20% ---------------------------- ---------------------------------- -------------------------------- ----------- Growth and Income Matrix Asset Advisors, Inc. $0-50 million 0.20% Large Cap Core Over $50 million 0.16% Value ---------------------------- ---------------------------------- -------------------------------- ----------- Technology 100 RCM Capital Management LLC N/A 0.70% ---------------------------- ---------------------------------- -------------------------------- ----------- Effective January 1, 2005, the following paragraph is added under the "CUSTODIAN" section: Effective on or about February 18, 2005, for the Strong Blue Chip Fund, Strong Technology 100 Fund, and Strong U.S. Emerging Growth Fund; February 25, 2005, for the Strong Asia Pacific Fund, Strong Small/Mid Cap Value Fund, Strong Small Company Value Fund, and Strong Overseas Fund; March 4, 2005, for the Strong Discovery Fund, Strong Enterprise Fund, Strong Large Cap Growth Fund, Strong Mid Cap Disciplined Fund, and Strong Opportunity Fund; and March 18, 2005 for the Strong Balanced Fund; Wells Fargo Bank, N.A. will become custodian of each Fund's assets and have custody of all securities and cash of the Fund, deliver and receive payment for securities sold, receive and pay for securities purchased, collect income from investments, and perform other duties, all as directed by officers of the Fund. In addition, the Fund, with the approval of the Board and subject to the rules of the SEC, may have subcustodians in those foreign countries in which their respective assets may be invested. The custodian and, if applicable, the subcustodian are in no way responsible for any of the investment policies or decisions of the Fund. For its services as custodian, Wells Fargo Bank, N.A. is entitled to receive fees as described in the following tables: [Enlarge/Download Table] DOMESTIC CUSTODY (BASED ON TOTAL RELATIONSHIP) ---------------------------------- ------------------------------------------------------------------------- 0.30 basis points First $50 billion ---------------------------------- ------------------------------------------------------------------------- ---------------------------------- ------------------------------------------------------------------------- 0.25 basis points Above $50 billion ---------------------------------- ------------------------------------------------------------------------- ---------------------------------- ------------------------------------------------------------------------- $ 7.00 Per Depository Trust Company or Federal Reserve System Trade, Automated and Non-automated ---------------------------------- ------------------------------------------------------------------------- ---------------------------------- ------------------------------------------------------------------------- $25.00 Per Definitive Security (Physical) ---------------------------------- ------------------------------------------------------------------------- ---------------------------------- ------------------------------------------------------------------------- $ 7.00 Per Commercial Paper Trade ---------------------------------- ------------------------------------------------------------------------- ---------------------------------- ------------------------------------------------------------------------- $ 6.00 Per Principle Reduction on Pass-Through Certificates ---------------------------------- ------------------------------------------------------------------------- ---------------------------------- ------------------------------------------------------------------------- $35.00 Per Option/Futures Contract ---------------------------------- ------------------------------------------------------------------------- ---------------------------------- ------------------------------------------------------------------------- $10.00 Per Fed Wire Deposit or Withdrawal - includes Third Party Time Deposits ---------------------------------- ------------------------------------------------------------------------- GLOBAL CUSTODY ------------------------------------------------------------------------ 0.05 basis points ------------------------------------------------------------------------ ------------------------------------------------------------------------ $30/per transaction ------------------------------------------------------------------------ Effective January 1, 2005, the following paragraphs are added to the "DISTRIBUTOR" section: The Fund and the Distributor have adopted a Code of Ethics ("Code") that governs the personal trading activities of all "Access Persons" of the Fund and the Distributor. Access Persons include every Director and officer of the Fund and the Distributor, and will include those employees of the Administrator and the Distributor who have access to information relating to the purchase or sale of securities by the Fund. The Code is based upon the principle that such Access Persons have a fiduciary duty to place the interests of the Fund and the Distributor's other clients ahead of their own. The Code requires Access Persons (other than the Fund Directors) to, among other things, pre-clear their securities transactions (with limited exceptions, such as transactions in shares of mutual funds, gifting or transferring securities, direct obligations of the U.S. Government, and certain options on broad-based securities market indexes) and to execute such transactions through an electronic account. The Code also requires Access Persons to annually report all securities transactions, including transactions in shares of Strong Funds. The Code, which applies to all Access Persons (other than the Fund Directors), includes a ban on acquiring any securities in an initial public offering, other than a new offering of a registered open-end investment company, and a prohibition from profiting on short-term trading in securities. In addition, no Access Person may purchase or sell any security that is contemporaneously being purchased or sold, or to the knowledge of the Access Person, is being considered for purchase or sale, by the Fund. Finally, the Code provides for a trading "black out" period of seven calendar days prior to and after the purchase or sale of the same or equivalent security by the Fund, with the exception of those purchases or sales deemed as, and defined by the Code as, program trades. Exceptions to the requirements of the Code of Ethics are to be handled on a case-by-case basis and will only be granted if the proposed conduct involves negligible opportunity for abuse. The Fund has also adopted a Senior Officers' Code of Ethics (the "Officers' Code") to encourage its principal executive officers, senior financial officers, and persons performing a similar function ("Senior Officers") to act in a manner consistent with the highest principles of ethical conduct. The Senior Officers are responsible for conducting the Fund's business in a manner that demonstrates a commitment to the highest standards of integrity. The purposes of the Officers' Code are to promote: o Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Fund files with, or submits to, the SEC and in other public communications the Fund makes; o Fund compliance with applicable governmental laws, rules and regulations; o The prompt internal reporting to an appropriate person identified in the Officers' Code of violations of this Officer's Code; and o Accountability for adherence to this Officers' Code. Effective January 1, 2005, the "PORTFOLIO TRANSACTIONS AND BROKERAGE" section, excluding the tables, is deleted and replaced with the following: PORTFOLIO TRANSACTIONS The Fund has no obligation to deal with any broker-dealer or group of broker-dealers in the execution of transactions in portfolio securities. Subject to the supervision of the Fund's Board and the supervision of the Advisor, the Fund's Sub-advisor is responsible for the Fund's portfolio decisions and the placing of portfolio transactions. In placing orders, it is the policy of the Sub-advisor to obtain the best overall results taking into account various factors, including, but not limited to, the size and type of transaction involved; the dealer's risk in positioning the securities involved; the nature and character of the market for the security; the confidentiality, speed and certainty of effective execution required for the transaction; the general execution and operational capabilities of the broker-dealer; the reputation, reliability, experience and financial condition of the firm; the value and quality of the services rendered by the firm in this and other transactions; and the reasonableness of the spread or commission, if any. While the Sub-advisor generally seeks reasonably competitive spreads or commissions, the Fund will not necessarily be paying the lowest spread or commission available. Purchases and sales of non-equity securities usually will be principal transactions. Portfolio securities normally will be purchased or sold from or to broker-dealers serving as market makers for the securities at a net price. Each of the Funds also will purchase portfolio securities in underwritten offerings and may purchase securities directly from the issuer. Generally, municipal obligations and taxable money market securities are traded on a net basis and do not involve brokerage commissions. The cost of executing a Fund's portfolio securities transactions will consist primarily of broker-dealer spreads and underwriting commissions. Under the 1940 Act, persons affiliated with the Fund are prohibited from dealing with the Fund as a principal in the purchase and sale of securities unless an exemptive order allowing such transactions is obtained from the SEC or an exemption is otherwise available. The Fund may purchase securities from underwriting syndicates of which the Advisor is a member under certain conditions in accordance with the provisions of a rule adopted under the 1940 Act and in compliance with procedures adopted by the Board. In placing orders for portfolio securities of a Fund, the Sub-advisor is required to give primary consideration to obtaining the most favorable price and efficient execution. This means that the Sub-advisor will seek to execute each transaction at a price and commission, if any, that provide the most favorable total cost or proceeds reasonably attainable in the circumstances. Commission rates are established pursuant to negotiations with the broker-dealer based, in part, on the quality and quantity of execution services provided by the broker-dealer and in the light of generally prevailing rates. Furthermore, the Advisor oversees the Sub-advisor's trade execution procedures to ensure that such procedures are in place, that they are adhered to, and that adjustments are made to the procedures to address ongoing changes in the marketplace. The Sub-advisor may, in circumstances in which two or more broker-dealers are in a position to offer comparable results for a Fund portfolio transaction, give preference to a broker-dealer that has provided statistical or other research services to the Sub-advisor. In selecting a broker-dealer under these circumstances, the Sub-advisor will consider, in addition to the factors listed above, the quality of the research provided by the broker-dealer. The Sub-advisor may pay higher commissions than those obtainable from other broker-dealers in exchange for such research services. The research services generally include (1) furnishing advice as to the value of securities, the advisability of investing in, purchasing, or selling securities, and the advisability of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts; and (3) effecting securities transactions and performing functions incidental thereto. By allocating transactions in this manner, the Sub-advisor is able to supplement its research and analysis with the views and information of securities firms. Information so received will be in addition to, and not in lieu of, the services required to be performed by the Sub-advisor under the advisory contracts, and the expenses of the Sub-advisor will not necessarily be reduced as a result of the receipt of this supplemental research information. Furthermore, research services furnished by broker-dealers through which the Sub-advisor places securities transactions for a Fund may be used by the Sub-advisor in servicing its other accounts, and not all of these services may be used by the Sub-advisor in connection with advising the Funds. Effective March 11, 2005, Boston Financial Data Services ("BFDS"), 2 Heritage Drive, North Quincy, Massachusetts 02171, will act as transfer agent and dividend-disbursing agent for the Fund. Effective January 1, 2005, the paragraph under "INDEPENDENT AUDITORS" is deleted and replaced with the following: Effective November 1, 2004, KPMG, LLP, 303 East Wacker Drive, Chicago, IL 60601-5212 are the independent auditors for the Funds, providing audit services and assistance and consultation with respect to the preparation of filings with the SEC. STRONG SMALL/MID CAP VALUE FUND Effective immediately, the first investment policy under "Investment Policies and Techniques" on page 18 is deleted and replaced with the following: o Under normal conditions, the Fund will invest at least 80% of its net assets in equity securities, including common stocks, preferred stocks, and securities that are convertible into common or preferred stocks, such as warrants and convertible bonds, of small- and medium-capitalization companies.
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STRONG GROWTH FUND Effective May 10, 2004, the following is added to the "CDSC Waivers" section beginning on page 128 in "APPENDIX C - SHARE CLASSES." 9. Redemptions of shares acquired by investments through certain dealers (including registered investment advisors and financial planners) that have established certain operational arrangements with the Administrator that include a requirement that such shares be sold for the sole benefit of clients participating in a "wrap" account, mutual fund "supermarket" account, or a similar program under which such clients pay a fee to such dealer. STRONG LARGE COMPANY GROWTH FUND Effective June 7, 2004, the first investment policy under "Investment Policies and Techniques" on page 15 is deleted and replaced with the following: o Under normal conditions, the Fund will invest at least 80% of its net assets in securities of large-capitalization companies, which, for purposes of this Fund, are those companies with a market capitalization substantially similar to that of companies in the S&P 500 Composite Stock Price Index at the time of investment. Effective June 7, 2004, the second and sixth investment policies under "Investment Policies and Techniques" on page 15, as shown below, are deleted. o Under normal conditions, at least 60% of the Fund's net assets will be invested in income-producing equity securities, consisting of common and preferred stocks and securities convertible into common stock (e.g., convertible bonds and convertible preferred stocks). o The Fund expects to remain within 5% of the sector allocation proportions in the Russell 1000 Growth Index on a weekly basis. The date of this statement of additional information supplement is January 3, 2005. RT48479 01-05 GRWS105/WH4163 01-05

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