UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-13
Integrity Mutual Funds, Inc.
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(Name of Registrant as Specified in Its Articles)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
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[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
ANNUAL MEETING TO BE HELD
May 30, 2003
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April 16, 2003
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at the International Inn, 1505 N. Broadway, Minot, North Dakota,
commencing at 10:00 a.m. local time on Friday, May 30, 2003.
The Secretary's Notice of Annual Meeting and the Proxy Statement, which
follow, describe the matters to come before the Meeting. During the Meeting,
we will also review the activities of the past year and items of general
interest about the Company.
We hope that you will be able to attend the Meeting in person, and we look
forward to seeing you. Please mark, date and sign the enclosed Proxy and
return it in the accompanying envelope as quickly as possible, even if you plan
to attend the Meeting. You may revoke the Proxy and vote in person at that
time if you so desire.
Sincerely,
/S/ ROBERT E. WALSTAD
----------------------
Robert E. Walstad
President, Chairman, and CEO
1
TABLE OF CONTENTS
Page
----
Notice of Annual Meeting................................................ 3
General Information..................................................... 4
Question and Answer Summary: About the Meeting......................... 5
Proposal No. 1 - Election of Directors.................................. 6
Executive Compensation.................................................. 10
Proposal No. 2 - Ratification of Selection of Independent Auditors...... 11
Proposal No. 3 - Other Matters as May Come Before the Meeting........... 11
Security Ownership of Certain Beneficial Owners and Management.......... 11
Other Matters........................................................... 13
Shareholder Proposals for Next Annual Meeting........................... 13
Notice to Banks, Broker-Dealers and Voting Trustees
and Their Nominees...................................................... 13
Proxy/Voting Instruction Card.......................................... 15
2
NOTICE OF 2003 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 30, 2003
---------------------------------------------
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the
"Meeting") of Integrity Mutual Funds, Inc., a North Dakota corporation (the
"Company"), will be held on May 30, 2003, at 10:00 a.m. local time at the
International Inn, 1505 N. Broadway, Minot, North Dakota, for the following
purposes:
1. To elect the Board of Directors of the Company.
2. To ratify the selection of Brady, Martz & Associates, P.C. as the
Company's independent auditors for the fiscal year ending December 31,
2003.
3. To transact such other business as may properly come before the Meeting
and at any postponements or adjournments thereof.
Only shareholders of record at the close of business on April 11, 2003 are
entitled to notice of and to vote at the Meeting or at any postponements or
adjournments thereof.
You are cordially invited and urged to attend the Meeting. All
shareholders, whether or not they expect to attend the Meeting in person, are
requested to complete, date and sign the enclosed form of Proxy and return it
promptly in the postage-paid, return-addressed envelope provided for that
purpose. Shareholders who attend the Meeting may revoke a prior Proxy and vote
in person as set forth in the Proxy Statement.
The Board of Directors of the Company is soliciting the enclosed Proxy.
The Board of Directors recommends that you vote in favor of the proposed items.
Your vote is important.
By Order of the Board of Directors
/S/ JACQUELINE L. CASE
------------------
Jacqueline L. Case
Secretary
Minot, North Dakota
Dated: April 16, 2003
YOUR PROXY AND RETURN ENVELOPE ARE ENCLOSED WITH THIS NOTICE. IN ORDER TO
ASSURE A QUORUM FOR THE TRANSACTION OF BUSINESS AT THE MEETING, EACH
SHAREHOLDER IS ASKED TO SIGN AND RETURN HIS OR HER PROXY IN THE ENCLOSED
ENVELOPE. EVERY PROXY IS IMPORTANT, WHETHER YOU OWN A FEW OR MANY SHARES.
PLEASE DO IT TODAY.
3
INTEGRITY MUTUAL FUNDS, INC.
1 North Main Street
Minot, ND 58703
(701) 852 - 5292
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held May 30, 2003
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GENERAL INFORMATION
The enclosed Proxy is being solicited by the Board of Directors of
Integrity Mutual Funds, Inc., a North Dakota corporation (the "Company"), for
use in connection with the annual meeting of shareholders on May 30, 2003, at
10:00 a.m. local time (the "Meeting") at the International Inn, 1505 N.
Broadway, Minot, North Dakota, and at any postponement or adjournment thereof.
Only shareholders of record as of the close of business on April 11, 2003 (the
"Record Date"), will be entitled to vote at the Meeting or any postponement or
adjournment. When the accompanying Proxy is properly executed and returned,
the shares it represents will be voted at the Meeting in the manner specified.
ANY PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED BY WRITTEN NOTICE
MAILED OR DELIVERED TO THE SECRETARY, BY A RECEIPT OF A PROXY PROPERLY SIGNED
AND DATED SUBSEQUENT TO AN EARLIER PROXY AND BY REVOCATION OF A WRITTEN PROXY
BY REQUEST IN PERSON AT THE ANNUAL MEETING OF SHAREHOLDERS. IF NOT SO REVOKED,
THE SHARES REPRESENTED BY THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE PROXY FORM.
The address of the principal executive office of the Company is 1 North
Main, Minot, North Dakota 58703. This Proxy Statement and the Board of
Directors' form of Proxy are being mailed to shareholders on or about April
16, 2003. Concurrently with the mailing of this Statement, the Company is
furnishing to shareholders its Annual Report for its fiscal year ended December
31, 2002.
The Company is bearing all costs of soliciting Proxies and expressly
reserves the right to solicit Proxies otherwise than by mail. Telephone,
telegraph, facsimile or other personal solicitations of certain shareholders
and brokers may follow the solicitation of Proxies by mail by one or more of
the directors, by officers or by employees of the Company. The Company may
make requests to trusts, banks and brokers or other similar agents or
fiduciaries for the voting instructions of beneficial owners and reimburse
the expenses incurred by such agents or fiduciaries in obtaining such
instructions. As of the date of this mailing, however, the Company has not
made any contracts or arrangements for such solicitations; hence, it cannot
identify any parties or estimate the cost of such solicitation.
As of April 11, 2003, the Company had outstanding 13,060,480 shares, with
each share being entitled to one vote, except for the election of directors
when shareholders are entitled to cumulate their votes. Representation of a
majority of the Company's shares outstanding on such date, either in person or
by Proxy, constitutes a quorum for the Meeting. When a quorum is present, the
vote by the holders of a majority of the shares present and entitled to vote
at the Meeting shall decide the proposals to be voted upon at the Meeting. A
shareholder voting through a Proxy who abstains with respect to a certain
proposal is considered to be present and entitled to vote on such proposal at
the Meeting and is, in effect, casting a negative vote, but a shareholder
(including a broker) who does not give authority to a Proxy to vote or
withholds authority to vote on a certain proposal shall not be considered
present and entitled to vote on such proposal.
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Because many of the Company's shareholders may be unable to attend the
Meeting in person, our Board of Directors solicits Proxies by mail to give each
shareholder an opportunity to vote on all matters presented at the Meeting.
Shareholders are urged to:
(1) read this Proxy Statement carefully;
(2) specify their choice in each matter by marking the appropriate box on
the enclosed Proxy; and
(3) sign, date and return the Proxy by mail in the postage-paid, return-
addressed envelope provided for that purpose.
QUESTION AND ANSWER SUMMARY: ABOUT THE MEETING
What is being voted on at the Meeting?
Our Board of Directors is asking shareholders to consider two items at this
Meeting:
* To elect directors to our Board of Directors;
* To ratify the selection of Brady, Martz & Associates, P.C. as our
independent auditors for the fiscal year ending December 31, 2003;
* Additionally, the shareholders may be asked to transact such other
business as may properly come before the Meeting and at any
postponements or adjournments thereof.
Who can vote at the Meeting?
Our Board of Directors has set April 11, 2003, as the Record Date for the
Meeting. Only persons holding shares of record at the close of business on the
Record Date will be entitled to receive notice of and to vote at the Meeting.
Each share will be entitled to one vote on each matter properly submitted for
vote to our shareholders at the Meeting. On the Record Date, there were
approximately 13,060,480 shares outstanding held by a total of 655 shareholders
of record. Therefore, there are a total of approximately 13,060,480 votes
that will be entitled to be cast at the Meeting.
What constitutes a quorum for the Meeting?
A quorum for the Meeting is based on the number of votes that can be cast
rather than the number of actual shares that are represented, because each
share has one vote per share. To have a quorum, we need more than fifty
percent (50+%) of the votes entitled to be cast to be present, in person or
by proxy, including votes as to which authority to vote on any proposal is
withheld, shares abstaining as to any proposal and broker non-votes (where a
broker submits a Proxy but does not have authority to vote a customer's shares
on one or more matters) on any proposal, all of which will be considered
present at the Meeting for purposes of establishing a quorum for the
transaction of business at the Meeting. Each will be tabulated separately.
How do I vote?
5
If you complete and properly sign the accompanying Proxy card and return it
to us, it will be voted as you direct, unless you later revoke the Proxy.
Unless instructions to the contrary are marked or if no instructions are
specified, shares represented by a Proxy will be voted for the proposals set
forth on the Proxy, and in the discretion of the persons named as proxies, on
such other matters as may properly come before the Meeting. If you are a
registered shareholder, that is, if you hold your shares in certificate form,
and you attend the Meeting, you may deliver your completed Proxy card in
person. If you hold your shares in "street name," that is, if you hold your
shares through a broker or other nominee, and you wish to vote in person at
the Meeting, you will need to obtain a Proxy form from the institution that
holds your shares.
Can I change my vote after I return my Proxy card?
Yes. Even after you have submitted your Proxy, you may change your vote at
any time before the Proxy is exercised by filing with our Secretary, at the
address indicated above, either a written notice of revocation or a duly
executed Proxy bearing a later date or you may vote in person at the Meeting.
The powers of the Proxy holders will be suspended if you attend the Meeting in
person and so request. However, attendance at the Meeting will not by itself
revoke a previously granted Proxy.
Any written notice of revocation sent to us must include the shareholder's
name and must be received prior to the Meeting to be effective.
What vote is required to approve each item?
Election of Directors. The election of each director nominee (Item 1)
requires the affirmative vote of a plurality of the votes cast in the election
of directors at the Meeting. Our shareholders are entitled to cumulate votes
with respect to the election of directors only in accordance with the procedure
described under Proposal No. 1 herein.
Other Proposals. An affirmative vote of a majority of the votes cast at the
Meeting is required for ratification of the selection of Brady, Martz &
Associates, P.C. as our independent auditors (Item 2).
While affirmative abstentions are counted in tabulations of the votes cast
on proposals presented to shareholders with respect to Proposals No. 2, broker
non-votes are not counted for purposes of determining whether a proposal has
been approved. Therefore, for all matters presented at the Meeting,
affirmative abstentions will have the same effect as a vote against the
proposal.
Votes cast by Proxy will be tabulated by an automated system administered
by ND Resources, Inc., our transfer agent. The independent persons appointed
by the Company to act as election inspectors for the Meeting will count votes
cast by Proxy or in person at the Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Meeting to be held on May 30, 2003, and at any and all postponements
or adjournments thereof, it is intended that the Company's shares represented
by properly executed proxies that are enclosed herewith (each, a "Proxy") will
be voted to elect the director nominees, unless authority so to vote is
withheld. Each nominee is currently a member of the Board of Directors of
Integrity Mutual Funds, Inc. (the "Board"), and all of the nominees have
indicated a willingness to serve as a director if elected. If elected, each
nominee will serve until the next annual meeting of shareholders or until his
earlier removal or resignation. The Board has no reason to believe that any of
the director nominees will be unable to serve as directors or become
unavailable for any reason. If, at the time of the Meeting, any of the
director nominees shall become unavailable for any reason, the persons entitled
to vote the Proxy will vote, as such persons shall determine in his or her
discretion, for such substituted nominee or nominees, if any, nominated by the
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Board. The affirmative vote of a plurality of the votes present or represented
to vote at the Meeting is necessary to elect each director nominee.
Shareholders of the Company will have an opportunity on their Proxy to vote
in favor of one or more director nominees while withholding authority to vote
for one or more director nominees.
The directors have voted to nominate five directors for election to hold
office for a one-year term until the next Annual Meeting of shareholders or
until their successors are elected and qualified. Proxies solicited by the
Board of Directors will, unless otherwise directed, be voted to elect the five
nominees named below.
Following is certain information regarding the nominees for the office of
director:
Term of Office Positions and
with the Offices with
Name Age Company the Company
Vance A. Castleman 59 3-25-94 to Present Director
Peter A. Quist 69 5-04-88 to Present Vice President and Director
Myron D. Thompson 58 3-20-98 to Present Director
Robert E. Walstad 58 9-22-87 to Present President, Director and
Chief Executive Officer
Richard H. Walstad 64 5-04-88 to Present Director
Cumulative voting is permitted in the election of directors in accordance
with the following procedure:
Each shareholder entitled to vote for directors has the right to cumulate
those votes in the election of directors by giving written notice of such
intent to any officer of the Company before the Meeting or the presiding
officer at the Meeting at any time before the election of directors, in which
case:
1. The presiding officer at the Meeting shall announce, before the election
of directors, that shareholders may cumulate their votes; and
2. Each shareholder shall cumulate those votes either by casting for one
candidate the number of votes equal to the number of directors to be
elected multiplied by the number of votes represented by the shares
entitled to vote, or by distributing all of those votes on the same
principle among any number of candidates.
Therefore, unless the above-described procedure is implemented, the holders
of a majority of the Company's shares could elect all of the directors. It is
expected that the Proxies received by the directors' nominees will be voted,
except to the extent that authority is withheld on any Proxy as to all of one
or more individuals, to elect as directors the following nominees, whose
principal occupations during the past five years, directorships and certain
other affiliations and information are set forth below:
7
Vance C. Castleman - Member, Souris Basin Revolving Loan Fund Committee (1972 -
1999, 2003 - Present); Real Estate Developer (1979 - Present); President and
CEO of Inn-Vestments, Inc.(1994 - Present); VP-Marketing, Labor Ready, LRW
(1999 - July, 2000); President, Minot Lodging Expo, LLC (1999 - Present);
Director of ARM Securities Corporation, (2000 - Present); Director of Capital
Financial Services, Inc. (2002 - Present).
Peter A. Quist - Vice President and Director of Integrity Mutual Funds, Inc.
(1988 - Present); Vice President, Secretary and Director of ND Money
Management, Inc. (1988 - Present), ND Capital, Inc. (1988 - Present), and ND
Resources, Inc. (1989 - Present); Director, Vice President and Secretary of
ND Tax-Free Fund, Inc. (1988 - Present), ND Insured Income Fund, Inc. (1990 -
1999), Montana Tax-Free Fund, Inc. (1993 - Present), Integrity Fund of Funds,
Inc. (1994 - Present) and Integrity Small-Cap Fund of Funds, Inc.(1998 -
Present); Vice President and Secretary of South Dakota Tax-Free Fund, Inc.
(1993 - Present); Director of South Dakota Tax-Free Fund, Inc. (1995 -
Present); Vice President, Secretary and Director of Ranson Capital Corporation
(1996 - Present); Vice President and Secretary of Ranson Managed Portfolios
(1996 - Present); Director of ARM Securities Corporation (2000 - Present).
Currently a licensed North Dakota attorney.
Myron D. Thompson - President, CEO and Director, Food Management Investors,
Inc., a.k.a. FMI, Inc., (1990 - Present); President and Director, Apple Core
Enterprises, Inc. (1990 - Present); President and Director, Labor Force of MN,
Inc. (1989 - Present); General Partner, Dakota Apple Partnership (1994 -
Present); President, Director, and Member, Village Ventures, LLC (1995-
Present); President, Director and Member, Ventures North, LLC (2002 -
Present); Director, Officer and Member, Prairie Funding, Inc. (2002 - Present).
Robert E. Walstad - Chief Executive Officer of Integrity Mutual Funds, Inc.
(2001 - Present), Director of Integrity Mutual Funds, Inc. (1987 - Present);
President of Integrity Mutual Funds, Inc. (1987 - 2001, 2002-Present);
President, Treasurer and Director of ND Money Management, Inc. (1988 -
Present), ND Capital, Inc. (1988 - Present), ND Resources, Inc. (1989 -
Present); President, Treasurer and Director of ND Tax-Free Fund, Inc. (1988 -
Present), ND Insured Income Fund, Inc. (1990 -1999), Montana Tax-Free Fund,
Inc. (1993 - Present), South Dakota Tax-Free Fund, Inc. (1994 - Present),
Integrity Fund of Funds, Inc. (1994 - Present), and Integrity Small-Cap Fund
of Funds, Inc. (1998 - Present); President, Treasurer and Director of Ranson
Managed Portfolios (1996 - Present); President, Treasurer and Director of
Ranson Capital Corporation (1996 - Present); associated with securities
industry as an NASD licensed registered representative (1972 - Present);
President, and CEO and of Capital Financial Services, Inc. (2002 - Present);
Director of Magic Internet Services, Inc. (1999 - Present), President of Magic
Internet Services, Inc. (1999 - 2001); President, CEO and Director of ARM
Securities Corporation (2000 - 2001) (2002 - Present), CEO and Director of
ARM Securities Corporation (2001).
Richard H. Walstad - Consultant of Cook Sign Company of Fargo, (2001 -
Present), Chairman of the Board/CEO, Cook Sign Co. of Fargo (1978 - 2001);
Director, Community First Bank, Fargo (1983 - 2001); Vice Chairman, Dakota
Certified Development Corp. (1992 - 2001); Vice Chairman, Fargo Cass County
Economic Development Corp., Fargo (1998 - 2001); Vice Chairman, Fargo
Municipal Airport Authority (1999 - 2001).
FAMILY RELATIONSHIPS
Richard H. Walstad, a director of the Company, is the brother of Robert E.
Walstad, the President, CEO and a director of the Company. None of the other
directors is related to any other director or to any executive officer of the
Company.
8
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
During the fiscal year ended December 31, 2002 four regular meetings of the
Board of Directors were held. All directors attended at least 75% of the Board
meetings, including committee meetings on which the Board member served during
this period.
During the fiscal year ended December 31, 2002, the Company did not have a
standing nominating committee of the Board of Directors. However, the Company
does have a standing Audit Committee. The Company's Audit Committee consisted
of independent directors Vance Castleman and Myron Thompson together with
Robert Walstad, a member of Company management. The Audit Committee is
responsible for providing assurance that financial disclosures made by
management reasonably portray the Company's financial condition, results of
operations, plan and long-term commitments. To accomplish this, the Audit
Committee oversees the external audit coverage, including the annual nomination
of the independent public accountants, reviews accounting policies and policy
decisions, reviews the financial statements, including interim financial
statements and annual financial statements, together with auditor's opinions,
inquires about the existence and substance of any significant accounting
accruals, reserves or estimates made by management, meets privately with the
independent public accountants to discuss all pertinent matters and reports to
the Board of Directors regarding its activities. The Audit Committee met once
in 2002. Recently, the Audit Committee met to review the audited financials
for the fiscal year ended December 31, 2002. Members of management and the
independent auditors took part in the discussion regarding the financials and
the overall results of operations. Included in the discussion were issues such
as relevance, reliability, comparability and consistency in relation to the
quality and acceptability of the Company's accounting policies and practices.
Additionally, the independent auditors discussed with the Audit Committee new
accounting policies, management's judgments and use of accounting estimates in
the preparation of the financial statements and significant audit adjustments.
Based upon a thorough discussion of the aforementioned, the Audit Committee has
recommended to the full Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10KSB for the
fiscal year 2002. Furthermore, as required, the Audit Committee has received a
statement from the independent auditors assuring their independence.
FEES BILLED FOR SERVICES RENDERED BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
During the fiscal year ended December 31, 2002, Brady, Martz & Associates,
P.C., the Company's independent auditors and principal accountant, billed the
Company the fees set forth below. The Audit Committee has considered whether
and determined that the provision of the non-audit services rendered to the
Company by Brady, Martz & Associates, P.C. during the Company's fiscal year
2002 was compatible with maintaining the independence of Brady, Martz &
Associates, P.C.
FINANCIAL INFORMATION SYSTEMS
AUDIT FEES DESIGN AND IMPLEMENTATION FEES ALL OTHER FEES
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$ 46,040 $ 0 $ 19,015
DIRECTOR COMPENSATION
Each director (other than those directors who are also employees of the
Company) received cash compensation of $6,000 for the year 2002. In addition,
Board members were reimbursed for their expenses associated with attendance
at meetings or otherwise incurred in connection with the discharge of their
duties as directors of the Company.
9
EXECUTIVE OFFICERS
The executive officer of the Company is Robert E. Walstad, whose biography
appears on page 8 of the director nominees as set forth above.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to all annual and
long-term compensation provided to the Company's Chief Executive Officer
("CEO"). None of the Company's other executive officers received remuneration
in excess of $100,000.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
-------------------
Name and Commission
Principal Position Year Salary & Override
($) ($)
Robert E. Walstad,
President, CEO and Director 2000 60,000 67,572*
2001 75,000 45,222**
2002 120,000 518***
*Reflects compensation paid under an incentive compensation arrangement between
Mr. Walstad and the Company, pursuant to which Mr. Walstad received, in
addition to his base salary and other regular employment benefits, additional
compensation equal to two basis points on the first $100 million of assets
under management annualized and one basis point on assets in excess of $100
million and standard commissions based on sales of securities.
**Reflects compensation paid under an incentive compensation arrangement
between Mr. Walstad and the Company, pursuant to which Mr. Walstad received,
in addition to his base salary and other regular employment benefits,
additional compensation equal to two basis points on the first $100 million
of assets under management annualized and one basis point on assets in excess
of $100 million for the first nine months of the year as well as standard
commissions based on sales of securities.
***Reflects compensation paid under an arrangement where Mr. Walstad received,
in addition to his base salary and other regular employment benefits,
standard commissions based on sales of securities.
Employment Agreements
The Company has written Employment Agreements with its President/CEO,
Robert E. Walstad.
AGGREGATE OPTION/WARRANT
EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/WARRANT VALUES
The purpose of the following table is to report exercises of share options
by the named executive officers during 2002 and the value of their unexercised
stock options as of December 31, 2002.
Number of Unexercised Value of Unexercised
Shares Options/warrants at In-The-Money
Acquired Value Fiscal Year-End Options/warrants
---------------
at Fiscal Year-End *
--------------------
Name On Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
------------------ ----------- -------- ----------- ------------- ----------- -------------
Robert E. Walstad -- -- 1,750,400 -- -0- --
* Value is based on a share price of $.25 which was the closing bid price for
shares on the OTC Bulletin Board on December 31, 2002, minus the warrant
exercise price of $.825 and option conversion price of $.425.
10
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that the Company's directors and executive officer file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission. Directors and executive officers are required to furnish the
Company with copies of all Section 16(a) forms they file. Based solely upon a
review of the copies of such forms furnished to the Company and written
representations from the Company's directors and executive officers, all
Section 16(a) filing requirements were met for the fiscal year ended December
31, 2002.
THE BOARD RECOMMENDS THAT SHAREHOLDERS GRANT AUTHORITY FOR THE ELECTION OF THE
NOMINEES TO THE BOARD OF DIRECTORS.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board has selected Brady, Martz & Associates, P.C. to serve as
independent auditors of the Company for the fiscal year ending December 31,
2003. The shareholders of the Company are being asked to ratify this selection
at the Meeting. A majority of the votes cast at the Meeting, if a quorum is
present, will be sufficient to ratify the selection of Brady, Martz &
Associates, P.C. as the Company's independent auditors for the fiscal year
ending December 31, 2003
The firm of Brady, Martz & Associates, P.C. has been the auditor for the
Company since the Company's inception in September 1987. The Board of
Directors again has selected Brady, Martz & Associates, P.C. to serve as the
Company's independent auditor for the year ending December 31, 2003, subject
to ratification by the shareholders. While it is not required to do so, the
Board of Directors is submitting the selection of that firm for ratification
to ascertain the view of the shareholders. If the selection is not ratified,
the Board of Directors will reconsider its selection. Proxies solicited by
the Board of Directors will, unless otherwise directed, be voted to ratify the
appointment of Brady, Martz & Associates, P.C. as independent auditor for the
Company for the year ending December 31, 2003.
A representative of Brady, Martz & Associates, P.C. will be present at the
Meeting and will be afforded an opportunity to make a statement if such
representative so desires and will be available to respond to appropriate
questions during the Meeting.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 2
PROPOSAL NO. 3
TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND AT
ANY POSTPONEMENTS OR ADJOURNMENTS THEREOF.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth, as of January 3, 2003, the ownership of
shares of the Company by each shareholder who is known by the Company to own
11
beneficially more than 5% of the outstanding shares of the Company, each
director, each executive officer named in the Summary Compensation Table on
page 10, and all executive officers and directors as a group. As of April 11,
2003, there were [12,970,480] shares, no par value, issued and outstanding.
AMOUNT AND NATURE
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP (1) PERCENTAGE OF
OR IDENTITY OF GROUP AS OF MARCH 6, 2003 OUTSTANDING SHARES
Robert E. Walstad 2,081,018 (2) 14.1%
Vance A. Castleman 288,180 (3) 2.2%
Peter A. Quist 259,251 (4) 2.0%
Myron D. Thompson 261,000 2.0%
Richard H. Walstad 104,394 (5) *
Charles Hartman 684,000 (6) 5.1%
Geoffrey Legler 684,000 (7) 5.1%
Richard Barone 1,357,400 (8) 10.5%
Executive officers and directors
as a group (5 persons) 2,993,843 (9) 20.2%
* Less than 1% owned.
(1) Unless otherwise indicated in the footnotes to this table, the listed
beneficial owner has sole voting power and investment power with respect
to such shares.
(2) Of these shares, 17,054 are held in Mr. Walstad's 401(k) account, and
66,670 shares held in Mr. Walstad's ESOP. Includes 1,350,400 shares
covered by warrants and 400,000 options which are currently exercisable
or exercisable within 60 days of April 11, 2003, held by Mr. Walstad.
(3) Of these shares, 280,750 are held as tenants in common with Mr.
Castleman's wife, and 7,430 are held in Mr. Castleman's IRA account.
(4) Of these shares, 34,567 are held in Mr. Quist's ESOP. Includes 112,000
shares covered by warrants which are currently exercisable or exercisable
within 60 days of April 11, 2003 held by Mr. Quist.
(5) Of these shares, Mr. Walstad's wife holds 13,334. Includes 22,600 shares
covered by warrants which are currently exercisable or exercisable within
60 days of April 11, 2003.
(6) Includes a potential 250,000 shares available to Mr. Hartman from a
convertible debenture issued January 15, 2003, expiring January 15, 2006,
and options to purchase 184,000 shares expiring January 15, 2012, both of
which are currently exercisable or exercisable within 60 days of April 11,
2003.
(7) Includes a potential 250,000 shares available to Mr. Legler from a
convertible debenture issued January 15, 2003, expiring January 15, 2006,
and options to purchase 184,000 shares expiring January 15, 2012, both of
which are currently exercisable or exercisable within 60 days of April 11,
2003.
12
(8) Of these shares, Mr. Barone holds 500,000 shares individually, and 857,400
shares are owned by various clients of Ancora Securities, Inc. Mr. Barone
disclaims beneficial interest or discretionary authority over these
shares; however, Mr. Barone owns control of Ancora Securities, Inc.
(9) Includes 1,885,000 shares covered by warrants and options which are
currently exercisable or exercisable within 60 days of April 11, 2003.
OTHER MATTERS
The Company's management is not aware of any other matters which may come
before the Meeting. The proxies named in the accompanying form of Proxy will
vote said Proxy in accordance with their judgment if any other matter does
properly come before the Meeting.
A copy of the Annual Report to shareholders is enclosed with this Proxy
Statement. Copies of the Company's 10-KSB Annual Report are available upon
request by contacting Jacqueline L. Case at the Company at 1 North Main,
Minot, ND 58703.
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2004 Meeting must
be received by the Secretary of the Company, 1 North Main, Minot, North Dakota
58703, no later than December 15, 2003, for inclusion in the Proxy Statement
and form of Proxy for such Meeting. If notice of any other shareholder
proposal intended to be presented at the 2004 Annual Meeting of shareholders
but not intended to be included in the Company's Proxy Statement and form of
Proxy for such Meeting is not received by the Company on or before March 1,
2004, the Proxy solicited by the Board of Directors of the Company for use
in connection with the Meeting may confer authority on the proxies named
therein to vote in their discretion on such proposal without any discussion in
the Company's Proxy Statement for that Meeting of either the proposal or how
such proxies intend to exercise their voting discretion.
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Company whether other persons are the beneficial owners
of the Company's shares for which Proxies are being solicited from you, and,
if so, the number of copies of this Proxy Statement and other soliciting
materials you wish to receive in order to supply copies to the beneficial
owners of the Company's shares.
This solicitation is being made by mail on behalf of the Board, but may also
be made without additional remuneration by officers or employees of the
Company by telephone, telegraph, facsimile transmission or personal interview.
The expense of the preparation, printing and mailing of this Proxy Statement
and the enclosed form of Proxy and Notice of Annual Meeting and any additional
material relating to the Meeting which may be furnished to shareholders by the
Board subsequent to the furnishing of this Proxy Statement has been or will be
borne by the Company. The Company will reimburse banks and brokers who hold
the Company's shares in their name or custody, or in the name of nominees for
others, for their out-of-pocket expenses incurred in forwarding copies of the
Proxy materials to those persons for whom they hold those Company's shares.
To obtain the necessary representation of shareholders at the Meeting,
supplementary solicitations may be made by mail, telephone or interview by
officers of the Company or selected securities dealers. It is anticipated
that the cost of any other supplementary solicitations, if any, will not be
material.
13
It is important that Proxies be returned promptly. Shareholders, whether or
not they expect to attend the meeting in person, are urged to complete, date
and sign the enclosed Proxy card and return it promptly in the envelope
provided for that purpose. By returning your Proxy card promptly, you can help
the Company avoid the expense of follow-up mailings to ensure a quorum so that
the Meeting can be held. Shareholders who attend the Meeting may revoke a
prior Proxy and vote their Proxy in person as set forth in this Proxy
Statement.
By Order of the Board of Directors
/S/ JACQUELINE L. CASE
------------------
Jacqueline L. Case
Secretary
Dated: April 16, 2003
14
INTEGRITY MUTUAL FUNDS, INC.
Annual Meeting of Shareholders
May 30, 2003
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Robert E. Walstad or Peter
A. Quist or either of them acting in the absence of the other, with full power
of substitution, to act as attorneys and proxies of the undersigned to vote all
shares of the Company that the undersigned is entitled to vote at the Annual
Meeting of Shareholders of Integrity Mutual Funds, Inc. (the "Meeting"), to
be held May 30, 2003, at 10:00 a.m. at the International Inn, 1505 N. Broadway,
Minot, ND, and at any and all adjournments and postponements thereof.
ITEM 1. The election as directors of all nominees listed below (except as
marked to the contrary).
Nominees: Vance A. Castleman, Peter A. Quist, Myron D. Thompson, Robert E.
Walstad, Richard H. Walstad
FOR ? WITHHOLD AUTHORITY ?
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), write that nominee(s) name below:
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ITEM 2. The ratification of the appointment of Brady, Martz & Associates,
P.C. as the Company's independent auditors for the fiscal year ending
December 31, 2003.
FOR ? AGAINST ? ABSTAIN ?
ITEM 3. In their discretion, the proxies are authorized to vote on any
other business that may properly come before the Meeting or any adjournment
or postponement thereof.
FOR ? AGAINST ? ABSTAIN ?
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE PROPOSALS AND EACH OF THE NOMINEES LISTED
ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE
VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. PLEASE DATE, SIGN
AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED STAMPED ENVELOPE.
The undersigned acknowledges receipt from the Company, before execution of this
Proxy: (1) Annual Report to Shareholders, (2) Notice of the Meeting and (3)
Proxy Statement for the Meeting.
X
----------------------------------
Signature
X
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Signature, if held jointly
X
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Title (if applicable)
Date: April 16, 2003
Please sign exactly as name(s) appear(s) above. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporation name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.