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As Filed with the Securities and Exchange Commission on September 25,1998
Securities Act Registration No. 333-02111
Investment Company Registration No. 811-7581
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 5 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 7 [X]
(Check appropriate box or boxes)
MEYERS INVESTMENT TRUST
(A Delaware Business Trust)
(Exact name of Registrant as specified in charter)
8901 Wilshire Boulevard
Beverly Hills, California 90211
(Address of Principal Executive Offices with Zip Code)
Registrant's Telephone Number, including Area Code: (310) 657-9393
Shelly J. Meyers
8901 Wilshire Boulevard
Beverly Hills, California 90211
(Name and Address of Agent for Service)
with a copy to:
Beth R. Kramer, Esq. Ellen F. Stoutamire, Esq.
Mayer, Brown & Platt BISYS Fund Services
1675 Broadway, Suite 1900 3435 Stelzer Road
New York, New York 10019 Columbus, Ohio 43219
It is proposed that this filing will become effective:
----- immediately upon filing pursuant to paragraph (b)
X
----- on September 28, 1998 pursuant to paragraph (b)
----- on (date) pursuant to paragraph (a)(i)
----- 75 days after filing pursuant to paragraph (a)(ii)
----- on (date) pursuant to paragraph (a)(ii) of rule 485
----- 60 days after filing pursuant to paragraph (a)(i)
If appropriate, check the following box:
----- this post-effective amendment designates a new effective date for
a previously filed post-effective amendment
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MEYERS INVESTMENT TRUST
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
Under the Securities Act of 1933
MEYERS PRIDE VALUE FUND
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PART A DESCRIPTION OF ITEM LOCATION IN PROSPECTUS
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Item 1 Cover Page......................................... Front Cover Page
Item 2. Synopsis........................................... Prospectus Summary; Expense Summary
Item 3. Condensed Financial Information.................... Financial Highlights
Item 4. General Description of
Registrant......................................... Front Cover Page; Prospectus Summary; Investment And Social
Objectives and Policies
Item 5. Management of the Fund............................. Prospectus Summary; Management And Service Providers;
Inside Back Cover Page; Other Information Concerning Shares
of the Fund
Item 5A. Management's Discussion of Fund Performance........ Not Applicable
Item 6. Capital Stock and Other
Securities......................................... Other Information Concerning Shares of the Fund; Tax Matters
Item 7. Purchase of Securities Being Offered............... Purchases and Redemptions of Shares; Other Information
Concerning Shares of the Fund
Item 8. Redemption or Repurchase........................... Purchases and Redemptions of Shares
Item 9. Pending Legal Proceedings.......................... Not Applicable
LOCATION IN STATEMENT OF
PART B DESCRIPTION OF ITEM ADDITIONAL INFORMATION
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Item 10. Cover Page......................................... Front Cover Page
Item 11. Table of Contents.................................. Front Cover Page
Item 12. General Information and History.................... The Fund
Item 13. Investment Objectives and Policies................. Investment And Social Objectives, Policies And Restrictions
Item 14. Management of the Fund............................. Management Of And Service Providers For The Trust And The
Fund
Item 15. Control Persons and Principal
Holders of Securities.............................. Management Of And Service Providers For The Trust And The
Fund
Item 16. Investment Advisory and Other Services............. Management Of And Service Providers For The Trust And The
Fund; Independent Auditors
Item 17. Brokerage Allocation and Other Practices........... Fund Transactions and Brokerage Commissions
Item 18. Capital Stock and Other
Securities......................................... Description of Shares, Voting Rights and Liabilities
Item 19. Purchase, Redemption and Pricing of Securities
Being Offered...................................... Determination of Net Asset Value; Valuation of
Fund Securities
Item 20. Tax Status......................................... Taxation
Item 21. Underwriter........................................ Management Of And Service Providers For The Trust And The
Fund
Item 22. Calculation of Performance Data.................... Performance Information
Item 23. Financial Statements............................... Financial Statements
</TABLE>
PART C
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Information required to be included in Part C is set forth under the
appropriately numbered item in Part C of this Registration Statement.
<PAGE>
PROSPECTUS DATED SEPTEMBER 28, 1998
[LOGO OF MEYERS PRIDE VALUE FUND APPEARS HERE]
The Meyers Pride Value Fund (the "Fund") is organized as a separate series of
the Meyers Investment Trust (the "Trust"), a business trust organized under
the laws of the State of Delaware.
The Fund is an open-ended no-load diversified mutual fund whose overall
investment objective is to attain long-term capital appreciation through
investing in a diversified portfolio of equity securities of under-valued but
nevertheless fundamentally sound companies identified as generally having
progressive policies towards gays and lesbians. See "Investment And Social
Objectives And Policies" herein. There can be no assurance that the Fund will
achieve its investment objective.
The Investment Manager for the Fund is Meyers Capital Management, LLC, a
California limited liability company. The Distributor and Administrator for
the Fund is BISYS Fund Services Limited Partnership, an Ohio limited
partnership. BISYS Fund Services, Inc., a Delaware corporation, is the
Accounting Agent and Transfer Agent of the Fund. The Custodian of the Fund is
BNY Western Trust Company.
------------------
This Prospectus sets forth concisely the information concerning the Fund that
a prospective investor should know before investing. Investors should read
this Prospectus and retain it for future reference.
The Fund has filed with the Securities and Exchange Commission a Statement of
Additional Information, dated September 28, 1998, which contains more detailed
information about the Fund and the Trust and is incorporated into this
Prospectus by reference. An investor may obtain a copy of the Statement of
Additional Information without charge by contacting the Distributor of the
Fund (see the section of this Prospectus captioned "Purchases and Redemptions
of Shares" for address). The Statement of Additional Information is available,
along with other materials, on the Securities and Exchange Commission Internet
Web Site (http://www.sec.gov). For additional information, call toll free 1-
800-410-3337.
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SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY
BANK OR OTHER DEPOSITORY INSTITUTION, AND THE SHARES ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
FEDERAL, STATE OR OTHER GOVERNMENTAL AGENCY.
------------------
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.
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TABLE OF CONTENTS
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Page
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Prospectus Summary......................................................... 3
Expense Summary............................................................ 5
Financial Highlights....................................................... 7
Investment and Social Objectives and Policies.............................. 8
Risk Factors............................................................... 12
Management and Service Providers........................................... 14
Purchases and Redemptions of Shares........................................ 18
Tax Matters................................................................ 22
Other Information Concerning Shares of the Fund............................ 23
Performance Information.................................................... 25
</TABLE>
2
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PROSPECTUS SUMMARY
WHAT IS THE FUND?
The Meyers Pride Value Fund (the "Fund") is organized as a separate series of
the Meyers Investment Trust (the "Trust"), a business trust organized under
the laws of the State of Delaware on March 25, 1996. The Fund is an open-ended
no-load diversified management investment company whose overall investment
objective is to attain long-term capital appreciation through investing in a
diversified portfolio of equity securities of under-valued but nevertheless
fundamentally sound companies identified by the Investment Manager as
generally having progressive policies towards gays and lesbians, but at a
minimum having in place specifically stated policies against discrimination in
hiring and promotion based upon sexual orientation. See "Investment And Social
Objectives And Policies" herein.
The Fund is the first series to be established under the Trust. As a
diversified fund, the Fund is required, by the Investment Company Act of 1940,
as amended (the "Investment Company Act"), with respect to 75% of its assets,
to invest no more than 5% of its assets in the securities of any one issuer,
and not more than 10% of the outstanding voting securities of an issuer may be
owned.
The Fund's investment and social objectives and policies, including the
identification of companies which have progressive policies towards gays and
lesbians, are determined by the Investment Manager of the Fund, subject to the
Board of Trustees providing broad supervision over the affairs of both the
Fund and the Trust. The determination of which companies have progressive
policies toward gays and lesbians is generally based upon criteria determined
from time-to-time by the Investment Manager and approved by the Board of
Trustees. The Investment Manager has, to date, identified over 350 publicly-
traded companies meeting this criteria. For further information about the
Board of Trustees, see "Management And Service Providers" herein. A majority
of the Board of Trustees are not affiliated with the Investment Manager.
WHO IS THE FUND'S INVESTMENT MANAGER?
The Investment Manager of the Fund, Meyers Capital Management, LLC, a
California limited liability company ("Meyers Capital Management"), serves as
the Fund's manager and investment adviser pursuant to an Investment Management
Agreement. The Investment Manager generally supervises (subject to the overall
authority of the Board of Trustees and officers of the Trust) the overall
administration of the Fund, including its various agents and service
providers, including those providing distribution, fund accounting, dividend
disbursement, transfer agent and custodian services. The Investment Manager
also manages the investments of the Fund on a day to day basis in accordance
with the Fund's investment and social objectives and policies, and determines
the composition of the securities in which the Fund may invest (i.e., those
companies identified as having anti-discrimination policies in place and
demonstrating other progressive policies towards gays and lesbians). For its
management and investment advisory services, the Investment Manager receives
from the Fund a monthly fee equal, on an annual basis, to 1% of the Fund's
average daily net assets. See "Management And Service Providers" herein.
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HOW DO YOU PURCHASE AND REDEEM SHARES OF THE FUND?
Shares of the Fund are sold continuously by the Distributor of the Fund, BISYS
Fund Services Limited Partnership ("BISYS LP"), at the next determined net
asset value per share. The minimum initial investment in the Fund is $1,000,
and subsequent minimum investments are $100. A lower initial investment of
$250 is permitted for Automatic Investment Plans and for accounts opened under
the Uniform Transfers to Minors Act, with subsequent investments allowed at a
minimum of $50.
The Trust, on behalf of the Fund, has adopted a Distribution Plan which
permits reimbursement of certain expenses incurred by the Distributor in
connection with the distribution of shares of the Fund, up to a maximum of
0.25% of net asset value annually. See "Management and Service Providers" and
"Plan of Distribution," herein.
The Fund offers to redeem shares of the Fund from its shareholders at any time
at next determined net asset value per share. The redemption price may be more
or less than the purchase price.
No sales load is charged with respect to either the purchase or redemption of
Fund shares. An investor should contact the Distributor regarding any further
information describing the procedures under which Fund shares may be purchased
and redeemed. See "Purchases And Redemptions" herein.
ADMINISTRATIVE SERVICES
BISYS LP is also the Administrator of the Fund. In its capacity as the Fund's
Administrator, BISYS LP provides certain administrative and managerial support
services to the Fund, in consideration of which BISYS LP is paid an
administration fee per year equal to 0.15% of the first $100 million in
aggregate Fund assets, 0.10% for the next $400 million, 0.07% for the next
$500 million, and 0.06% for aggregate Fund assets in excess of $1 billion. The
fee amounts set forth are subject to a minimum fee of $60,000 for the calendar
year ending December 31, 1998. Effective January 1, 1999, the fee amounts set
forth are subject to a minimum fee of $75,000 for the calendar year ending
December 31, 1999.
BISYS Fund Services, Inc., a Delaware corporation ("BISYS Inc."), is the Fund
Accounting Agent and Transfer Agent of the Fund. As Fund Accounting Agent,
BISYS Inc. calculates the Fund's net asset value on a daily basis. The Fund
pays BISYS Inc. the sum of $30,000 per year, plus reimbursement of out-of-
pocket expenses. In its capacity as Transfer Agent for the Fund, BISYS Inc.
provides dividend disbursing, registrar and transfer agency services to the
Fund. The Fund pays BISYS Inc. the sum of $21 per year, per each shareholder,
subject to a $15,000 per year minimum. See "Management And Service Providers"
herein.
RISK FACTORS
There can be no assurance that the Fund will be able to achieve its investment
objective. Since the Fund will limit its investments to equity securities of
companies which have anti-discrimination policies in place and demonstrate
other progressive policies towards gays and lesbians, such social policy will
tend to limit the availability of investment opportunities to the Fund
compared to that for other investment companies that have a comparable
investment objective to that of the Fund. See "Investment And Social
Objectives And Policies" herein.
Common stocks, the most familiar type of equity securities, represent an
equity (ownership) interest in a corporation. Although equity securities have
a history of long-term growth in value, their prices fluctuate based on
4
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changes in a company's financial condition and on overall market, economic and
political conditions. Smaller companies are especially sensitive to these
factors.
There are market risks inherent in any investment, and there is no assurance
that the primary investment objective of the Fund will be achieved or that any
income will be earned. Moreover, the application of the investment policies is
dependent upon the judgment of the Investment Manager. A prospective purchaser
of shares of the Fund should realize there are risks in any policy dependent
upon such judgment and that no representation is made that the investment
objective of the Fund will be accomplished or that there may not be
substantial losses in any particular investment. At any time, the value of the
Fund's shares may be more or less than the cost of such shares to the
investor. See "Risk Factors" and "Investment And Social Objectives And
Policies" herein.
EXPENSE SUMMARY
The purpose of the following table is to assist the shareholder in
understanding the various costs and expenses that an investor in the Fund will
bear, either directly or indirectly. The Fund's cost and expenses are based
upon the Fund's operating expenses for the fiscal year ended May 31, 1998,
adjusted to reflect current fees and expenses.
SHAREHOLDER TRANSACTION EXPENSES:
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Maximum Sales Load Imposed on Purchases................................... None
Sales Load Imposed on Reinvested Dividends................................ None
Deferred Sales Load Imposed on Redemptions................................ None
Exchange Fees............................................................. None
----
Total Shareholder Transaction Expenses.................................... None
====
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS):
Investment Management Fee (after waivers)(1).............................. 0.00%
Distribution 12b-1 Fee(2)................................................. 0.25%
Other Expenses(3)......................................................... 1.70%
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Total Annual Operating Expenses (after waivers)(4)........................ 1.95%
====
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(1) Under the Investment Management Agreement, the Fund pays the Investment
Manager a monthly investment management fee equal, on an annual basis,
to 1.00% of the Fund's average daily net assets. Effective January 31,
1997, the Investment Manager had undertaken to waive such portion of
its investment management fee and assume such portion of the Fund's
expenses necessary to maintain Total Annual Operating Expenses at no
more than 1.95% per year of average daily net assets. Based upon the
foregoing, the Fund estimates that the Investment Manager will waive
its entire fee and assume a portion of the Fund's expenses in order to
maintain Total Annual Operating Expenses at the 1.95% per year level.
Inability by the Investment Manager to continue to provide fee waivers
and reimbursements would result in an increase in net expenses and a
corresponding decrease in net asset value per share. See "Statement of
Additional Information--Investment Manager."
5
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(2) Pursuant to the terms of the Distribution Plan, the Fund will pay its
Distributor, per year, up to 0.25% of the Fund's average daily net
assets in reimbursement of, or in anticipation of, expenses incurred by
the Distributor in connection with the sale of shares of the Fund. A
long-term shareholder in the Fund may, as a result of the Distribution
Plan, pay more than the economic equivalent of the maximum distribution
charges permitted by the rules of the National Association of
Securities Dealers, Inc. See "Management And Service Providers" herein.
(3) "Other Expenses" include fees to be paid to the Administrator, Fund
Accounting Agent, Transfer Agent and Custodian for the Fund. See
"Management And Service Providers" herein.
(4) Without the waiver of its fee and expenses by the Investment Manager as
described above, Total Annual Operating Expenses for the Fund for the
fiscal year ended May 31, 1998 were 12.30% of average daily net assets.
The Fund estimates that the Fund would require average daily net assets
of approximately $40 million for Total Annual Operating Expenses to
decline below the level of 1.95% of average daily net assets per year.
EXAMPLE
A shareholder of the Fund would indirectly pay the following estimated
expenses(1) on a $1,000 investment in the Fund, assuming: (i) a 5% annual
return on such investment; and (ii) the redemption of the investment at the
end of each of the following time periods:
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1 year.............................................................. $20.00
3 years............................................................. $61.00
5 years............................................................. $105.00
10 years............................................................ $227.00
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(1) Based upon the same assumptions, and subject to the same
qualifications, as set forth above in the table captioned "Annual
Operating Expenses."
The Example set forth above is hypothetical and should not be considered a
representation of past or future expenses of the Fund. Moreover, the Fund's
actual performance will vary and may result in actual returns that are greater
or less than 5%.
For additional information with respect to the annual operating expenses of
the Fund, see "Management And Service Providers" in this Prospectus.
6
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FINANCIAL HIGHLIGHTS
(FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT THE PERIOD)
The following selected data for a share in the Fund outstanding for the
indicated period has been audited by KPMG Peat Marwick LLP, the Fund's
independent auditors, and should be read in conjunction with the audited
financial statements and related notes referenced in the Fund's Annual Report
covering the fiscal year ended May 31, 1998 and the period ended May 31, 1997.
The Fund's Annual Report includes a discussion of the factors, strategies and
techniques that materially affect its performance during the period of the
report, as well as certain other related information. A copy of the Fund's
Annual Report is available without charge upon request.
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For the Year For the Period
Ended Ended
May 31, 1998 May 31, 1997(1)
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NET ASSET VALUE, BEGINNING OF PERIOD.............. $12.23 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss............................. (0.06) (0.03)
Net realized and unrealized gains on
investments.................................... 2.36 2.26
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Total from investment operations................ 2.30 2.23
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DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments................ (1.55) --
------ ------
NET ASSET VALUE, END OF PERIOD.................... $12.98 $12.23
====== ======
TOTAL RETURN(2)................................... 20.56% 22.30%
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)........ $3,123 $1,563
Net investment loss before
waivers/reimbursements......................... (10.96)% (40.00)%(3)
Net investment loss net of
waivers/reimbursements......................... (0.61)% (0.48)%(3)
Expenses before waivers/reimbursements.......... 12.30% 41.61%(3)
Expenses net of waivers/reimbursements.......... 1.95% 2.09%(3)
Portfolio turnover rate......................... 39.00% 42.46%
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(1) The Fund commenced operations on June 13, 1996.
(2) Total return is based on the change in net asset value during the period
and assumes reinvestment of all dividends and distributions if applicable.
Total return is not annualized for any period less than one full year.
(3) Annualized.
7
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INVESTMENT AND SOCIAL OBJECTIVES AND POLICIES
INVESTMENT OBJECTIVE AND SOCIAL OBJECTIVE
The overall investment objective of the Fund (the "Investment Objective") is
to attain long-term capital appreciation by investing in a diversified
portfolio of equity securities of undervalued but nevertheless fundamentally
sound companies which have been identified as having met the Social Objective.
Companies which meet the "Social Objective" are defined as companies which, in
general, have been identified as having progressive policies towards gays and
lesbians, but at a minimum have in place specifically stated policies against
discrimination in hiring and promotion based upon sexual orientation (the
"Fundamental Social Criteria").
The Fund believes that enterprises which are responsive toward addressing the
concerns of the gay and lesbian community and other progressive socially-
sensitive constituencies will benefit financially from the consumer loyalty
generated by such social awareness and will therefore be more likely to
prosper in the long-term. The Fund also believes such enterprises will be less
likely to incur certain legal liabilities that may arise when an enterprise is
found to discriminate against minorities, such as members of the gay and
lesbian community. The Fund believes such enterprises should also, over the
longer term, be able to generate additional stockholder market-value as an
indirect result of the greater investment in such enterprises, through the
Fund, by the gay and lesbian community (which, per capita, is one of the
wealthiest demographic groups in the United States), as well as supporters of
the gay and lesbian community.
INVESTMENT STRATEGY
In order to achieve the Investment Objective, the Fund will use a value-based
investment approach focusing on a longer-term market cycle (at least three to
five years), consistent with moderate levels of risk, wherein the Investment
Manager will identify companies exhibiting the following investment
characteristics: (1) low or inexpensive current value relative to earnings
estimates, cash flow, book value and/or break-up value; (2) good management;
(3) strong business fundamentals, and (4) positive earnings momentum.
The equity securities the Fund may invest in include common stocks, preferred
stocks and warrants, and certain debt instruments convertible into stock,
primarily in publicly-traded companies. Publicly-traded companies refers to
companies whose equity securities are traded over a national stock exchange or
over-the-counter through the National Association of Securities Dealers
Automatic Quotation ("NASDAQ") system or the National Association of
Securities Dealers, Inc. ("NASD") Electronic Bulletin Board. The Fund may
invest in companies in all ranges of capitalization. The Investment Manager
expects that no less than 60% of the Fund's net assets will be invested in
equity securities of "large capitalization" companies, which the Investment
Manager defines as companies with total capitalization of at least $2 billion.
Since it is anticipated that most equity securities will be held for the
longer-term using this strategy, the Investment Manager anticipates there will
likely be a low rate of portfolio turnover, and estimates portfolio turnover
of the Fund will be approximately 30% to 60%.
The Investment Manager expects that under normal market conditions the Fund
will typically invest up to 95% of its total assets (and sometimes virtually
all of its assets) in the types of equity securities described above and,
subject to certain limitations, certain options in these securities for
hedging purposes. Under distressed market conditions, the Fund may maintain
its assets in cash or cash-equivalents, or invest in money-market instruments
or obligations of the United States government or government-sponsored
enterprises and other types of government-backed
8
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securities. Such investments would be temporary defensive in nature and would
not be expected to exceed 50% of the Fund's net assets. Although returns on
these assets are historically less than investment in equity and other non-
governmental types of securities, the risk of loss in investing in such
instruments is lower as well.
IDENTIFICATION OF COMPANIES WHICH SATISFY THE SOCIAL OBJECTIVE
The determination of which companies have satisfied the Social Objective, and
may therefore be considered as appropriate investment vehicles for the Fund,
is based upon recommendations of the Investment Manager and the approval by
the Board of Trustees. As of the date of this Prospectus, over 350 publicly-
traded companies have been identified as having satisfied the Social
Objective.
In making its recommendations, the Investment Manager evaluates companies
based upon (1) the Fundamental Social Criteria and (2) such additional
criteria and considerations consistent with the Social Objective as are
determined reasonable by the Investment Manager from time-to-time in its sole
discretion, and approved in general by the Board of Trustees (the "Non-
Fundamental Social Criteria"). Such methodology is, by its nature, subjective.
As of the date of this Prospectus, the Non-Fundamental Social Criteria
consists of two separate areas of general focus: employee relations and
corporate citizenship.
In evaluating a company's gay and lesbian employee relations, the Investment
Manager evaluates the company's record and policies with respect to labor
matters affecting gay and lesbian employees, such as: (1) the company's
commitment to equal employment opportunity for gays and lesbians, both overall
and in executive positions, and the scope of the company's policies against
discrimination based upon sexual orientation; (2) the breadth, quality and
innovation of the company's employee benefit programs and their positive
effect on gay and lesbian employees (including inclusion of gay and lesbian
partners and families in employee benefit programs); and (3) the company's
relationships with gay and lesbian suppliers, vendors, and customers.
In evaluating a company's corporate citizenship, the Investment Manager
reviews the company's record on gay and lesbian related charitable giving and
other philanthropic activities and its interaction with the gay and lesbian
community, such as advertising in gay and lesbian directed publications or
other media.
It is not necessary that a company satisfy all of the factors and
considerations described above as part of the Non-Fundamental Social Criteria
in order to be identified as having satisfied the Social Objective. However,
every company must satisfy the Fundamental Social Criteria in order to be
included on the list of approved companies.
The Investment Manager uses publicly available information in evaluating
companies. The Investment Manager also directly reviews company policies and,
in certain cases, discusses those policies with the company's management.
The Investment Manager intends to vote proxies of companies included in the
Fund's portfolio consistent with the Social Objective. The inclusion of a
company on the Fund's list of approved companies with progressive policies
towards gays and lesbians does not imply that the company has requested it be
included on the list or approved such inclusion, has sought the approval of
the Fund with respect to the development and implementation of the company's
employment or corporate citizenship policies, or is affiliated with the Fund
in any manner.
INVESTMENT POLICIES
The Fund will diversify its holdings to reduce the risks of investing. As a
diversified Fund, the Fund is required, by the Investment Company Act with
respect to 75% of its assets, to invest no more than 5% of its assets into the
9
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securities of any one issuer, and not more than 10% of the outstanding voting
securities of an issuer may be owned. In addition, the Fund may not invest
more than 25% of its total assets in any one industry.
The Fund may invest up to 10% of its total assets in convertible securities,
including bonds, debentures, notes, preferred stocks, warrants or other
securities that may be converted into or exchanged for a prescribed amount of
common stock of the same or a different issuer within a particular period of
time at a specified price or formula. A convertible security entitles the
holder to receive interest paid or accrued on debt or the dividend paid on
preferred stock until the convertible security matures or is redeemed,
converted or exchanged. The Investment Manager will limit investments in
convertible securities to those generally considered to be "investment grade"
debt securities, which the Investment Manager defines as being rated BBB or
higher by Standard & Poor's Corporation ("S&P") or Baa or higher by Moody's
Investor Services ("Moody's"). The highest rated debt securities (securities
rated AAA by S&P or Aaa by Moody's) carry, in the opinion of such investments
ratings agencies, the smallest degree of investment risk and the capacity to
pay interest and repay principal is very strong.
The Fund may not invest more than 15% of its net assets in securities that are
illiquid. Securities that have legal or contractual restrictions on resale but
have a readily available market are not considered illiquid for purposes of
this limitation. Restricted securities include those that are subject to
restrictions contained in the securities laws of other countries. However,
securities that are freely marketable in the country in which they are
principally traded would not be considered illiquid. The Fund will treat any
securities that are held in countries with restrictions on repatriation of
more than seven days, as illiquid securities for purposes of the 15%
limitation.
Rule 144A under the Securities Act establishes a "safe harbor" from the
registration requirements of the Securities Act for resales to qualified
institutional buyers of certain securities otherwise subject to restriction on
resale to the general public. The Investment Manager anticipates that the
market for certain restricted securities will expand further under Rule 144A
as a result of the development of automated systems for the trading, clearance
and settlement of unregistered securities of domestic and foreign issuers,
such as the PORTAL System sponsored by the NASD.
The Investment Manager will monitor the liquidity of restricted securities in
the Fund under the supervision of the Board of Trustees. In reaching liquidity
decisions, the Investment Manager may consider, inter alia, the following
factors: (1) the unregistered nature of the security; (2) the frequency of
trades and quotes for the security; (3) the number of dealers wishing to
purchase or sell the security and the number of other potential purchasers;
(4) dealer undertakings to make a market in the security; and (5) the nature
of the security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers and the
mechanics of the transfer).
The Fund may invest cash reserves in (1) direct obligations and/or short-term
debt securities (i.e., securities having a remaining maturity of one year or
less) issued by agencies or instrumentalities of the United States Government
and/or (2) bankers' acceptances, commercial paper or certificates of deposit,
provided that the issuer satisfies the Social Objective of the Fund. Although
the U.S. government provides financial support to U.S. government sponsored
agencies or instrumentalities, no assurance can be given that it will always
do so. The U.S. government and its agencies and instrumentalities do not
guarantee the market value of their securities; consequently, the value of
such securities will fluctuate. The Fund's policy is to hold its assets in
such securities pending readjustment of its portfolio holdings of stocks in
order to meet anticipated redemption requests.
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In accordance with the Investment Company Act, the Fund may invest a maximum
of up to 10% of the value of its total assets in securities of other
investment companies, and the Fund may own up to 3% of the total outstanding
voting stock of any one investment company. In addition, up to 5% of the value
of the Fund's total assets may be invested in the securities of any one
investment company. As an investor in an investment company, the Fund would
bear its ratable share of that investment company's expenses, including its
administrative and advisory fees. At the same time, the Fund would continue to
pay its own investment management fees and other expenses.
The Fund will readjust its securities holdings periodically to the extent the
Investment Manager deems it prudent to do so, and subject to the overall
supervision and approval of the Board of Trustees. There can be no assurance
that any portfolio enhancement strategies will be successful, and the
performance of the Fund may as a result be worse than if such strategies were
not undertaken. The Board of Trustees of the Fund will receive and review, at
least quarterly, a report prepared by the Investment Manager evaluating the
performance of the Fund, and will consider what action, if any, should be
taken in the event of a significant change in the performance of the Fund.
The Fund's primary consideration in placing securities transactions with
broker-dealers for execution is to obtain, and maintain the availability of,
execution at the most favorable prices and in the most effective manner
possible. For further discussion regarding securities trading by the Fund, see
the Statement of Additional Information.
The Fund may make short sales of securities or maintain a short position in
securities provided such investment is otherwise consistent with the Fund's
Investment Objective and Social Objective. Pursuant to the Investment Company
Act, the Fund will maintain government securities and certain other assets in
amounts sufficient to cover the fair market value of such sales and positions
plus margin posted with brokers for such sales and positions. No more than 25%
of the Fund's net assets will be used as collateral for such short positions
at any one time.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Certain of the Fund's investment policies and restrictions are "fundamental"
and, as such, are subject to change only with shareholder approval. All
policies stated throughout this Prospectus, other than those identified in
this section as fundamental, may be changed without shareholder approval. The
Fund's fundamental policies include its Investment Objective, certain
restrictions on its investments under applicable securities laws, and its
Fundamental Social Criteria. Although adherence to the Fundamental Social
Criteria is a fundamental policy, the other factors and considerations used by
the Investment Manager in making its recommendations consistent with the
overall Social Objective and the Board in approving such recommendations are
discretionary and non-fundamental.
The fundamental policies and restrictions may not be changed without the
approval of the holders of a majority of the Fund's shares (which, as used in
this Prospectus, means the lesser of (1) more than 50% of the outstanding
shares of the Fund, or (2) 67% or more of the outstanding shares of the Fund
present at a meeting at which holders of more than 50% of the Fund's
outstanding shares are represented in person or by proxy). If there were a
change in the Fund's fundamental policies and restrictions, shareholders
should consider whether the Fund remains an appropriate investment in light of
their then-current financial positions and needs. The Statement of Additional
Information includes a complete discussion of the foregoing matters as well as
other investment policies and a listing of specific investment restrictions,
which govern the Fund's investment policies.
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RISK FACTORS
INVESTMENT OBJECTIVE
There can be no assurance that the Fund will be able to achieve its Investment
Objective. It should be noted that the limitation of the Fund's investments to
equity securities of companies identified as meeting the Social Objective will
tend to limit the availability of investment opportunities to the Fund
compared to that for other investment companies that have a comparable
investment objective to that of the Fund.
COMMON STOCKS
Common stocks, the most familiar type of equity securities, represent an
equity (ownership) interest in a corporation. Although equity securities have
a history of long-term growth in value, their prices fluctuate based on
changes in a company's financial condition and on overall market, economic and
political conditions. Smaller companies are especially sensitive to these
factors.
CONVERTIBLE SECURITIES
Investments in convertible securities of a corporation generally entail less
risk than the corporation's common stock, although the extent to which such
risk is reduced depends in large measure upon the degree to which the
convertible security sells above its value as a fixed income security. The
investment value of a convertible security is influenced by changes in
interest rates, with investment value declining as interest rates increase and
increasing as interest rates decline. The credit standing of the issuer and
other factors also may have an effect on the convertible security's investment
value. The conversion value of a convertible security is determined by the
market price of the underlying common stock. If the conversion value is low
relative to the investment value, the price of the convertible security is
governed principally by its investment value. Generally, the conversion value
decreases as the convertible security approaches maturity. To the extent the
market price of the underlying common stock approaches or exceeds the
conversion price, the price of the convertible security will be increasingly
influenced by its conversion value. A convertible security generally will sell
at a premium over its conversion value by the extent to which investors place
value on the right to acquire the underlying common stock while holding a
fixed income security. The Fund only intends to invest in convertible
securities where the value of the option is minimal and the convertible
security trades on the basis of its coupon.
ILLIQUID AND RESTRICTED SECURITIES
Investments of the Fund's assets in illiquid securities, (i.e., securities
that are restricted in their transfer or for which market quotations are
otherwise not readily available or repurchase agreements over seven days), may
restrict the ability of the Fund to dispose of its investments in a timely
fashion and for a favorable price. The risks associated with illiquidity are
particularly acute in situations in which the Fund's operations require cash,
such as when the Fund redeems for shares of beneficial interests or pays
distributions, and may result in the Fund borrowing to meet short-term cash
requirements or incurring capital losses on the sale of such investments.
SECURITIES OF FOREIGN ISSUERS
Some of the securities included in the Fund may be those of foreign issuers
(provided that the securities are publicly-traded in the United States in the
form of American Depositary Receipts or similar instruments the market for
which is denominated in United States dollars). Securities of foreign issuers
may represent a greater degree of risk (e.g., as a result of exchange rate
fluctuation, tax provisions, war or expropriation) than do securities of
domestic issuers.
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LOANS OF SECURITIES
The Fund has the authority to lend its securities to brokers, dealers and
financial institutions provided, among other things, that the loan is secured
continuously by collateral consisting of U.S. Government securities or cash or
letters of credit, which is marked to the market daily to ensure that each
loan is fully collateralized at all times. Loans of securities involve a risk
that the borrower may fail to return the securities or may fail to provide
additional collateral.
OPTIONS
The Fund may enter into certain transactions involving stock options for the
purpose of hedging against possible increases in the value of securities,
which are expected to be purchased by the Fund or possible declines in the
value of securities, which are held by the Fund. Were the Fund to establish an
option position for the purpose of hedging against investment risks, and would
do so only if there appears to be a liquid secondary market therefor, there
can be no assurance that such a market will exist for any particular option
contract at any specific time. In that event, it may not be possible to close
out a position held by the Fund, and the Fund could be required to purchase or
sell the instrument or instruments underlying an option, make or receive a
cash settlement or meet ongoing variation margin requirements. The inability
to close out option positions also could have an adverse impact on the Fund's
ability effectively to hedge its portfolio.
The Fund will enter only into exchange-traded options. At all times when an
option position is outstanding, the Fund will maintain a segregated deposit
with the Fund's custodian of cash, money market instruments or high-quality
securities sufficient in order to cover the exposure of that position.
SHORT POSITIONS
Short selling or short positions by the Fund involves the Fund selling a
security that it does not own or it borrows from a broker. When the Fund
purchases the security to replace the borrowed security, if the value of the
security declines as anticipated, the Fund will profit to the extent of the
difference between the purchase price and the sales price. If the price of the
security increases, the Fund will suffer a loss. Short selling or short
positions by the Fund involve a risk that the price of the security will not
decrease, as anticipated, and the Fund will suffer a loss.
HISTORY OF OPERATIONS; EXPERIENCE OF INVESTMENT MANAGER
The Trust is subject to all the risks incident to the creation of a new
business, including the absence of a long history of operation, and there can
be no guarantee that the Investment Objective of the Fund will be attained.
Prior to the commencement of operations of the Fund, the Investment Manager
had no previous experience in providing investment management services to an
investment company; however, the Investment Manager's designated Portfolio
Manager for the Fund has provided analytical and portfolio management duties
to investment companies and institutional asset management clients, and the
Vice President of Operations of the Investment Manager and the Fund's
Administrator, BISYS LP, have provided operations, compliance and
administrative services to investment companies. The Investment Manager has
undertaken to waive such portion of its investment management fee and to
assume and pay such portion of the Fund's expenses necessary to maintain Total
Annual Operating Expenses of no more than 1.95% per year of average daily net
assets. Inability by the Investment Manager to continue to provide fee waivers
and reimbursements would result in an increase in net expenses and a
corresponding decrease in net asset value per share. See "Management And
Service Providers" in general, and "Management and Service Providers--
Investment Manager" and "Management And Service Providers--Portfolio Manager"
in particular, below.
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INVESTMENT RISKS
There are market risks inherent in any investment, and there is no assurance
that the Fund will attain its Investment Objective or that any income will be
earned. Moreover, the application of the investment policies is dependent upon
the judgment of the Investment Manager. A prospective investor in the Fund
should realize there are risks in any policy dependent upon such judgment and
that no representation is made that the Investment Objective of the Fund will
be attained or that there may not be substantial losses in any particular
investment. At any time, the value of the Fund's shares may be more or less
than the cost of such shares to the investor.
YEAR 2000 RISKS
Like other funds and business organizations around the world, the Fund could
be adversely affected if the computer systems used by the Investment Manager
and the Fund's other service providers do not properly process and calculate
date-related information for the year 2000 and beyond. This is commonly known
as the "Year 2000 Problem". The Fund has been informed that the Investment
Manager and the Fund's other service providers (i.e., Administrator, Transfer
Agent, Fund Accounting Agent, Distributor and Custodian) have developed and
are implementing clearly defined and documented plans to minimize the risk
associated with the Year 2000 Problem. These plans include the following
activities: inventorying of software systems, determining inventory items that
may not function properly after December 31, 1999, reprogramming or replacing
such systems and retesting for Year 2000 readiness. In addition, the service
providers are obtaining assurances from their vendors and suppliers in the
same manner. Non-compliant Year 2000 systems upon which the Fund is dependent
may result in errors and account maintenance failures. The Fund has no reason
to believe that (1) the Year 2000 plans of the Investment Manager and the
Fund's other service providers will not be completed by December, 1999, or (2)
the costs currently associated with the implementation of their plans will
have a material adverse impact on the business, operations or financial
condition of the Fund or its service providers.
In addition, the Year 2000 Problem may adversely affect the companies in which
the Fund invests. For example, these companies may incur substantial costs to
correct the problem and may suffer losses caused by data processing errors.
Since the ultimate costs or consequences of incomplete or untimely resolution
of the Year 2000 Problem by the Fund's service providers are unknown to the
Fund at this time, no assurance can be made that such costs or consequences
will not have a material adverse impact on the Fund or its service providers.
The Fund and the Investment Manager will continue to monitor developments
relating to this issue, including the development of contingency plans for
providing back-up computer services in the event of a systems failure.
MANAGEMENT AND SERVICE PROVIDERS
The Board of Trustees of the Fund provides broad supervision over the affairs
of the Fund. The Fund has engaged Meyers Capital Management to provide
management and investment advisory services to the Fund, BISYS LP to provide
administration and distribution services to the Fund, BISYS Inc. to provide
fund accounting and transfer agent services to the Fund, and BNY Western Trust
Company to provide custodial services to the Fund.
BOARD OF TRUSTEES AND OFFICERS
The Board of Trustees is responsible for the overall management and
supervision of the Fund's business. The Board of Trustees consists of Ms.
Shelly J. Meyers, Mr. Leslie C. Sheppard, Mr. Robert E. Gipson, Professor
Leonard
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Greenhalgh and Dr. Duane E. McWaine. None of the Trustees, with the exception
of Ms. Meyers and Mr. Sheppard by virtue of their ownership interests in
Meyers Capital Management, are considered "interested persons" of the Fund as
defined by the Investment Company Act.
The Board of Trustees is responsible for deciding matters of general policy
and reviewing actions of the Fund's contractors and agents, including the
actions of the Investment Manager, the Administrator, the Fund Accounting
Agent, the Transfer Agent, the Distributor, and the Custodian. The officers of
the Trust conduct and supervise the Fund's daily business operations. The
Board of Trustees also has broad supervisory authority over the Investment
Manager's determination of which companies satisfy the Social Objective, and
are therefore eligible to be considered for an investment by the Fund.
For further information about the Board of Trustees and the officers of the
Fund, including their general business experience, see "Management Of And
Service Providers For The Trust And Fund" in the Statement of Additional
Information.
INVESTMENT MANAGER
The Fund has engaged the Investment Manager, Meyers Capital Management, to
serve as both the manager and the investment adviser for the Fund pursuant to
an Investment Management Agreement approved by the Board of Trustees. The
Investment Manager is a California limited liability company organized on
January 23, 1996, which has been registered as an investment adviser under the
Investment Advisers Act of 1940, as amended, since March 7, 1996. The Manager
and principal owner of the Investment Manager is Ms. Shelly J. Meyers. The
officers of the Investment Manager are Ms. Meyers, Chief Executive Officer and
Chief Financial Officer; and Mr. Philip McKinley, Vice President of Operations
and Secretary. Mr. McKinley is also an owner of the Investment Manager.
The Investment Manager did not, prior to the commencement of operations of the
Fund, have previous experience in providing investment management services to
an investment company. However, Ms. Shelly J. Meyers, the Investment Manager's
designated Portfolio Manager for the Fund, has provided analytical and
portfolio management services to investment companies and institutional asset
management clients. Additionally, Mr. Philip McKinley, the Vice President of
Operations of the Investment Manager, and the Fund's Administrator, BISYS LP
have provided compliance and administrative services to investment companies.
See "Risk Factors--History Of Operations; Experience Of Investment Manager"
above, "Management And Service Providers--Portfolio Manager" below, and
"Management Of And Service Providers For The Trust And The Fund" in the
Statement of Additional Information.
As part of its management function, the Investment Manager oversees (subject
to the overall authority of the Board of Trustees) the overall operations and
administration of the Fund, including the supervision of professional services
rendered by others, including the Distributor, Administrator, Transfer Agent,
and Custodian, as well as accounting, auditing, legal and other services.
As part of its investment advisory function, the Investment Manager implements
the investment strategy of the Fund and manages the Fund's investments subject
to the Fund's Investment Objective and Fundamental Social Criteria and the
overall supervision by the Board of Trustees. Specifically, the Investment
Manager determines, from amongst the companies who have been identified as
satisfying the Social Objective, which companies the Fund should invest in,
what the appropriate mix of investments amongst such companies should be, and
the timing and extent of adjustments in the holdings of the Fund to satisfy
the requirements of diversification and the need to
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maintain sufficient reserves for anticipated redemptions of shares. The
Investment Manager also has sole discretion to select brokers for purchases
and sales. Although the Investment Manager's activities are subject to general
oversight by the Trustees and officers of the Fund, neither the Trustees nor
officers of the Fund evaluate the merits of the Investment Manager's selection
of individual securities from amongst approved companies.
The Investment Management Agreement provides that the Investment Manager shall
not be liable and shall be indemnified, for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with the matters to
which the Investment Management Agreement relates, except liability resulting
from willful malfeasance, bad faith or gross negligence in the performance of
duties specified in the Investment Management Agreement or from reckless
disregard of the Investment Manager's obligations thereunder.
Pursuant to the terms of the Investment Management Agreement, the Fund pays
the Investment Manager for its management and investment advisory services, a
monthly fee equal, on an annual basis, to 1% of the Fund's average daily net
assets. The Investment Manager has undertaken to waive such portion of its
investment management fee and to assume and pay such portion of the Fund's
expenses necessary to maintain Total Annual Operating Expenses of no more than
1.95% per year of average daily net assets.
PORTFOLIO MANAGER
Ms. Shelly J. Meyers, the Manager of the Investment Manager and its Chief
Executive Officer and Chief Financial Officer, has been designated by the
Investment Manager as its "portfolio manager" for the Fund, in which capacity
she is responsible for providing all investment advisory services to the Fund
on behalf of the Investment Manager. Ms. Meyers received her Bachelors of Arts
degree from the University of Michigan and her Masters of Business
Administration from the Amos Tuck School of Business Administration at
Dartmouth College. From July, 1994 through February, 1996, Ms. Meyers was
Assistant Vice President, Institutional Asset Management for The Boston
Company Asset Management, Inc., in which capacity she acted as an equity
research analyst and assistant portfolio manager for the institutional
investment group and was the lead equity analyst for the entertainment,
communications, apparel, specialty retail, and energy industries. In that
capacity Ms. Meyers was responsible for analyzing portfolios containing
investments valued at up to $1.2 billion. From June, 1993 through September,
1993, Ms. Meyers was an Analyst with The Boston Company Asset Management, Inc.
From June, 1989 through September, 1992, Ms. Meyers was Lead Analyst,
International Audit, with the Chevron Corporation, in which capacity, she led
the analysis and review of various projects and operations throughout the
world and reported her findings to executive management. Ms. Meyers is a
Certified Public Accountant in the State of California.
ADMINISTRATION, FUND ACCOUNTING AND TRANSFER AGENTS
The Fund has entered into an agreement with BISYS LP to provide the Fund with
administrative services pursuant to an Administration Agreement. Pursuant to
the Administration Agreement, BISYS LP generally performs or supervises the
performance by others of certain administrative services including, without
limitation, calculating Fund expenses and controlling disbursements; assisting
Fund counsel with preparing prospectuses, statements of additional
information, registration statements and proxy materials; preparing reports,
applications and documents required for compliance by the Fund with applicable
federal and state laws and regulations; developing and preparing
communications to shareholders, including the Fund's annual report and proxy
materials; administering contracts between the Fund and other service
providers; coordinating and supervising the filing of the Fund's tax returns;
and monitoring and advising the Fund on its registered investment company
status under the Internal Revenue Code. BISYS LP also provides persons
satisfactory to the Board of Trustees of the Fund to serve as
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officers of the Fund. Such officers, as well as certain other employees and
Trustees of the Fund, may be directors, officers or employees of BISYS LP or
its affiliates.
As compensation for these services, the Fund pays BISYS LP, per year, an
amount equal to 0.15% of the first $100 million in aggregate Fund assets,
0.10% for the next $400 million, 0.07% for the next $500 million, and 0.06%
for aggregate Fund assets in excess of $1 billion. The fee amounts set forth
are subject to a minimum fee of $60,000 for the calendar year ending December
31, 1998. Effective January 1, 1999, the fee amounts set forth are subject to
a minimum fee of $75,000 for the calendar year ending December 31, 1999.
The Fund has entered into an agreement with BISYS Inc., an affiliate of BISYS
LP, to provide the Fund with fund accounting services, pursuant to a Fund
Accounting Agreement. Pursuant to the Fund Accounting Agreement, BISYS Inc.
maintains the Fund's books and records and calculates the Fund's net value on
a daily basis. The Fund pays BISYS Inc. the sum of $30,000 per year, plus
reimbursement of out-of-pocket expenses.
The Fund has entered into an agreement with BISYS Inc. to provide the Fund
with dividend disbursing and transfer agency services, pursuant to a Transfer
Agency Agreement. Pursuant to the Transfer Agency Agreement, BISYS Inc.
provides dividend disbursement, registrar and transfer agency services to the
Fund. The Fund pays BISYS Inc. the sum of $21 per year, per each shareholder,
subject to a $15,000 per year minimum.
PLAN OF DISTRIBUTION
The Trustees of the Trust have adopted a Plan of Distribution (the
"Distribution Plan") with respect to the Fund in accordance with Rule 12b-1
under the Investment Company Act after having concluded that there is a
reasonable likelihood that the Distribution Plan will benefit the Fund and its
shareholders. As contemplated by the Distribution Plan, BISYS LP acts as agent
of the Fund in connection with the offering of shares of the Fund pursuant to
the Distribution Agreement. Pursuant to the Distribution Agreement, BISYS LP
also acts as the Fund's Distributor, and is responsible for facilitating the
continuous sale or redemption of Fund shares. Solely for the purpose of
reimbursing BISYS LP for activities primarily intended to result in the sale
of Fund shares, the Trust has, on behalf of the Fund, adopted the Distribution
Plan wherein, pursuant to Rule 12b-1 of the Investment Company Act, the Fund
is authorized to spend up to 0.25% of net asset value annually for BISYS LP's
services in connection with the distribution of shares of the Fund. The
Distribution Plan was approved by the Independent Trustees of the Trust as
well as the Fund's initial shareholders.
BISYS LP acts as the principal underwriter of shares of the Fund and bears the
compensation of personnel necessary to provide such services and all costs of
travel, office expense (including rent and overhead) and equipment. Under the
Distribution Plan, BISYS LP may receive a fee from the Fund at an annual rate
up to but not to exceed 0.25% of the Fund's average daily net assets in
anticipation of, or as reimbursement for, costs and expenses incurred in
connection with the sale of shares of the Fund, such as payments to broker-
dealers who advise shareholders regarding the purchase, sale or retention of
shares of the Fund, payments to employees of BISYS LP, advertising expenses
and the expenses of printing and distributing prospectuses and reports used
for sales purposes, expenses of preparing and printing sales literature and
other distribution-related expenses. BISYS LP will provide to the Board of
Trustees a quarterly written report of amounts expended by it under the
Distribution Plan and the purposes for which such expenditures were made.
CUSTODIAN
The Fund has engaged BNY Western Trust Company (a subsidiary of The Bank of
New York Company, Inc.) to act as Custodian of the assets of the Fund,
pursuant to a Custodian Agreement. The Custodian's responsibilities
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include safeguarding and controlling the Fund's cash and securities, handling
the receipt and delivery of securities, collecting interest on the Fund's
investments, and maintaining books of original entry for fund accounting
purposes. As compensation for its services, the Fund pays BNY Western Trust
Company, per year, an amount equal to 0.10% of the first $20 million in
aggregate Fund assets, and 0.04% for aggregate Fund assets in excess of $20
million, subject to a $15,000 per year minimum.
PURCHASES AND REDEMPTIONS OF SHARES
PURCHASES
Shares of the Fund may be purchased without a sales load at the net asset
value next determined after an order for shares is received and accepted by
the Fund. The minimum initial investment in the Fund is $1,000 (except that
the minimum initial investment when selecting the Automatic Investment Plan or
when opening an account under the Uniform Transfers to Minors Act ["UTMA"] is
$250). The minimum subsequent investment is $100 ($50 for the Automatic
Investment Plan or for UTMA accounts).
INITIAL INVESTMENTS BY MAIL
Subject to acceptance by the Fund, investors desiring to purchase shares of
the Fund by mail should complete an Account Application and mail the
Application to the Fund at the address noted below, together with a check in
U.S. dollars ($1,000 minimum), payable to "Meyers Pride Value Fund":
Meyers Pride Value Fund
P.O. Box 182496
Columbus, Ohio 43218-2496
Subject to acceptance by the Fund, payment for the purchase of shares received
by mail will be credited to a shareholder's account at the net asset value per
share of the Fund next determined after receipt. Such payment need not be
converted into federal funds (monies credited to the bank of the Fund's
Custodian by a Federal Reserve Bank) before acceptance by the Fund.
INITIAL INVESTMENTS BY WIRE
Subject to acceptance by the Fund, shares of the Fund may be purchased by
wiring federal funds ($1,000 minimum, $250 minimum for the Automatic
Investment Plan) to the Trust. Notification of an investor's intent to make a
wire transfer must be given to the Fund at 1-800-410-3337 prior to 4:00 p.m.,
New York time, on the business date prior to the date the purchase monies will
be wired. (Prior notification should also be received from investors with
existing accounts). Complete wire instructions will be given to Investors upon
making their notification of intent to wire transfer funds. A completed
Account Application must be forwarded by overnight mail to the Fund at the
address noted below:
Meyers Pride Value Fund
c/o BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219-8021
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Funds must be paid in U.S. dollars. Federal funds purchases will be accepted
only on days in which the Fund, the Distributor and the Custodian are open for
business. Currently, days in which the Fund, the Distributor and the Custodian
are not open are those days on which the New York Stock Exchange is closed.
ADDITIONAL INVESTMENTS
Additional investments may be made at any time (minimum investment of $100
{$50 for the Automatic Investment Plan}) by purchasing shares of the Fund at
net asset value by mailing a check to the Fund at the address noted above
under "Initial Investments by Mail" (payable to the "Meyers Pride Value Fund",
or by wiring monies as outlined above under "Initial Investments by Wire").
For a wire purchase, notification must be given to the Fund at 1-800-410-3337
prior to 4:00 p.m., New York time, on the business day prior to the day the
purchase monies will be wired.
INVESTMENTS THROUGH SHAREHOLDER ORGANIZATIONS
Shares may also be purchased through a broker, a bank, or other institutions
or investment professionals ("Shareholder Organizations"). Shareholder
Organizations may impose minimum customer account and other requirements in
addition to the requirements imposed by the Fund. Investors purchasing or
redeeming shares may be charged a transaction-based fee and other charges for
the services of the Shareholder Organization. Each Shareholder Organization is
responsible for transmitting to its customers a schedule of its fees and
information regarding any additional or different conditions regarding
purchases or redemptions. Customers of Shareholder Organizations should read
this Prospectus in light of the terms governing accounts with their
organization. If an investor purchases shares through a Shareholder
Organization, the Shareholder Organization must promptly transmit such order
to the Fund so that the order receives the net asset value next determined
following receipt of the order. The Fund does not pay to or receive
compensation from Shareholder Organizations for the sale of Fund shares.
INVESTMENTS THROUGH IRAS AND OTHER QUALIFIED RETIREMENT PLANS
The Fund has available special forms, which enable an investor to purchase
Fund shares through his or her Individual Retirement Account ("IRA"). The Fund
may be used as a qualifying medium for IRAs and other qualified retirement
plans ("Plans"). The minimum initial investment for an IRA or a Plan is $250.
Completion of a special application is required in order to create such an
account. An annual $12.00 maintenance and custody fee is payable with respect
to each IRA. Fund shares may also be purchased for IRAs and Plans established
with other authorized custodians. Contributions to IRAs are subject to
prevailing amount limits set by the Internal Revenue Service. For more
information about IRAs and other Plan accounts, contact the Fund.
Investors may also, in certain circumstances, be able to invest in the Fund
through other types of retirement plans, such as through simplified employee
pension plans ("SEPs"), qualified pension plans, and tax deferred annuity
plans sponsored by their employers. Investors considering investments through
an IRA or other types of retirement plans should write or telephone the Fund
for further information and the appropriate form of application.
INVESTMENTS THROUGH AUTOMATIC INVESTMENT PLAN
The Fund also has available special forms enabling an investor to regularly
invest, through his or her bank, specified dollar amounts in periodic
intervals into the Fund (the "Automatic Investment Plan"). The minimum initial
investment under the Automatic Investment Plan is $250, and minimum subsequent
investments are $50. Payments under the Automatic Investment Plan are
automatic and will continue until such time as the Fund and the investor's
bank are notified to discontinue further investments. Due to the varying
procedures to prepare, process and to
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forward the bank withdrawal information to the Fund, there may be a delay
between the time of the bank withdrawal and the time the money reaches the
Fund. The investment in the Fund will be made at the next-determined net asset
value per share after receipt of the funds and bank withdrawal data are
received in the form required by the Fund. Investors with questions regarding
investments through the Automatic Investment Plan should write or telephone
the Fund for further information and the appropriate form of application.
OTHER PURCHASE INFORMATION
The Fund reserves the right, in its sole discretion, to cease offering its
shares for sale at any time or to reject any order for the purchase of its
shares when, in the judgment of the Board of Trustees or officers of the Fund,
such suspension or rejection is in the best interests of the Fund. The Fund
and the Distributor also reserve the right to modify the minimum investment
requirement, the subsequent investment requirement, or the manner in which
shares are offered.
For each shareholder of record, the Fund establishes an open account to which
all shares purchased are credited together with any dividends and capital gain
distributions, which are paid in additional shares. See "Other Information
Concerning Shares Of The Fund--Dividends And Capital Gain Distributions,"
herein. Purchases of Fund shares will be made in full and fractional shares of
the Fund calculated to three decimal places. In the interest of economy and
convenience, certificates for shares will not be issued.
REDEMPTIONS
Shares of the Fund may be redeemed by mail, or, if authorized, by telephone,
subject to certain procedures. The value of the shares redeemed may be more or
less than the shareholder's purchase price, depending on the Fund's
performance during the period the shareholder owned its shares. A shareholder
owning $12,000 or more of shares of the Fund may elect to have periodic
redemptions of not less than $100 made from his or her account to be paid on a
monthly, quarterly, semiannual or annual basis. The maximum payment per year
is 12% of the account value at the time of the election. A sufficient number
of shares to make the scheduled redemption will normally be redeemed on the
date selected by the shareholder. Depending on the size of the payment
requested and fluctuation in the net asset value, if any, of the shares
redeemed, redemptions for the purpose of making such payments may reduce or
even exhaust the account. A shareholder may request that these payments be
sent to a predesignated bank or other designated party. Capital gains and
dividend distributions paid to the account will automatically be reinvested at
net asset value on the distribution payment date. Redemptions of shares are
taxable events on which the shareholder may recognize a gain or a loss.
BY MAIL
The Fund will redeem the shares at the net asset value per share next
determined after a redemption request is received in "good order." The net
asset value per share of the Fund is determined as of 4:00 p.m., New York
time, on each day that the Fund, the Transfer Agent and the New York Stock
Exchange are open for business. Requests should be addressed to:
Meyers Pride Value Fund
P.O. Box 182496
Columbus, Ohio 43218-2496
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Requests in "good order" must include the following documentation:
(1) a letter of instruction, if required, or a stock assignment specifying
the number of shares or dollar amount to be redeemed, signed by all
registered owners of the shares in the exact names in which they are
registered (if the shares are in street name, the investor may be
required to sell the shares through his or her investment
professional);
(2) any required signature guarantees (see "Signature Guarantees" below);
and
(3) other supporting legal documents, if required, in the case of estates,
trusts, guardianships, custodianships, corporations, pension and profit
sharing plans and other organizations.
SIGNATURE GUARANTEES
To protect shareholder accounts, the Fund and the Transfer Agent from fraud,
signature guarantees may be required in certain instances to enable the
Transfer Agent to verify the identity of the person who has authorized a
redemption from an account. Shareholders may contact the Transfer Agent at 1-
800-410-3337 for further details.
BY TELEPHONE
Provided the Telephone Redemption Option has been authorized by initialing the
appropriate box in the Account Application, a redemption of shares may be
requested by calling the Transfer Agent at 1-800-410-3337 and requesting that
the redemption proceeds be mailed to the primary registration address or wired
per the authorized instructions. If the Telephone Redemption Option is
authorized, the Fund and the Transfer Agent may act on telephone instructions
from the person representing himself or herself to be a shareholder and
believed by the Fund or the Transfer Agent to be genuine. The Transfer Agent's
records of such instructions are binding and the shareholders, not the Fund or
the Transfer Agent, bear the risk of any loss, liability, cost or expense for
acting upon telephone instructions believed to be genuine. The Fund will
employ reasonable procedures to confirm that instructions communicated are
genuine and, if it does not, it may be liable for any losses due to
unauthorized or fraudulent instructions. The procedures employed by the Fund
in connection with transactions initiated by telephone include tape recording
of telephone instructions and requiring some form of personal identification
prior to acting upon instructions received by telephone. The following
information must be supplied by the shareholder or broker at the time a
request for a telephone redemption is made: (1) the shareholder's account
number; (2) the shareholder's social security number, and (3) the name and
account number of the shareholder's designated securities dealer or bank.
Telephone redemptions will be suspended for a period of ten business days
following a telephonic address change.
PAYMENT
Redemption proceeds for shares of the Fund recently purchased by check may not
be distributed until payment for the purchase has been collected, which may
take up to 15 business days from the purchase date.
Other than described above, payment of the redemption proceeds will be made by
check mailed within seven days after receipt of an order for a redemption.
Investors may request that payment be made by wire transfer to the investor's
designated account at a commercial bank.
The right of any shareholder to receive payment with respect to any redemption
may be suspended or the payment of the redemption proceeds postponed during
any period in which the New York Stock Exchange or the Fund or the Transfer
Agent are closed (in addition to weekends or holidays) or trading on such
Exchange is restricted, or under any emergency circumstances as determined by
the Securities and Exchange Commission.
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<PAGE>
If the Board of Trustees determines that it would be detrimental to the best
interests of the remaining shareholders of the Fund to make payment wholly in
cash, the Fund may pay the redemption proceeds in whole or in part by a
distribution in-kind of readily marketable securities held by the Fund in lieu
of cash in conformity with applicable rules of the Securities and Exchange
Commission. Investors generally will incur brokerage charges on the sale of
Fund securities so received in payment of redemptions.
OTHER REDEMPTION INFORMATION
The Fund and the Transfer Agent reserve the right, in their sole discretion,
to suspend the right of telephone redemptions in general or to reject a
telephone redemption with respect to any individual shareholder in particular,
either before, during or after the call, when, in the judgment of the Board of
Trustees or officers of the Fund, such suspension or rejection is in the best
interests of the Fund. The Fund and the Distributor also reserve the right to
modify the redemption procedures from time-to-time including, without
limitation, requiring signature guarantees for all redemption requests.
The Fund reserves the right to redeem involuntary on at least 30 days' notice
the balance in a shareholder's account having a current value of not less than
$250, but not if an account falls below $250 due to a change in the market
value of the Fund's shares.
TAX MATTERS
The Fund intends to qualify and elect to be treated as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended
(the "Code"). To qualify as such, the Fund must satisfy certain requirements
relating to its sources of income, diversification of its assets, and
distribution of its income. As a regulated investment company, the Fund will
not be required to pay any federal income or excise taxes on any net
investment income and net realized capital gains that are distributed to its
shareholders in accordance with certain timing requirements imposed by the
Code.
Shareholders of the Fund normally will have to pay federal income taxes, and
any state or local taxes, on the dividends and any realized net capital gain
distributions they receive from the Fund. At the end of each calendar year,
each shareholder receives information for tax purposes on the dividends and
any realized net capital gain distributions received during that calendar year
including the portion taxable as ordinary income, the portion taxable as
capital gains, the portion, if any, representing a return of capital (which
generally is free of current taxes but results in a basis reduction) and the
amount of dividends eligible for the dividends-received deduction for
corporations.
Distributions of net long-term capital gains (i.e., the excess of net long-
term capital gains over net short-term capital losses) will cause any short-
term capital loss realized on the disposition by a shareholder of Fund shares
held for six or fewer months to be recharacterized, to the extent of those
distributions, as long-term capital loss. Under the back-up withholding rules
of the Code, certain shareholders may be subject to 31% withholding of federal
income tax on distributions and payments made by the Fund. Generally,
shareholders are subject to back-up withholding if they have not provided the
Fund with a correct taxpayer identification number and certain other
certifications. Individuals, corporations and other shareholders who are not
U.S. persons under the Code are generally subject to withholding at the rate
of 30% (or lower rate provided by an applicable tax treaty) on dividends from
the Fund.
In addition to federal taxes, a shareholder may be subject to state, local or
foreign taxes on payments received from the Fund.
22
<PAGE>
Under current law, the Fund is not liable for any income or franchise tax in
the State of Delaware as long as the Fund qualifies as a regulated investment
company under the Code. The Fund's fiscal year-end is May 31.
The foregoing discussion is intended for general information only. A
prospective shareholder should consult with its own tax adviser as to the tax
consequences of an investment in the Fund including the status of
distributions from the Fund under applicable state or local law. See
"Taxation" in the Statement of Additional Information for a more detailed
discussion of the federal, state and local income tax consequences of
investing in the Fund shares.
OTHER INFORMATION CONCERNING SHARES OF THE FUND
DETERMINATION OF NET ASSET VALUE OF SHARES
The Fund determines the net asset value of the shares of the Fund on each Fund
business day. This determination is made once during each such day as of 4:00
p.m. on regular trading days of the New York Stock Exchange by deducting the
amount of the Fund's liabilities from the value of its assets and dividing the
difference by the number of shares of the Fund outstanding. A share's net
asset value is effective for orders received by the Fund prior to the close of
the business day on which such net asset value is determined. The Fund's net
asset value is reported on the NASDAQ system under the symbol MYPVX.
Equity securities held by the Fund are valued at the last sale price on the
exchange on which they are primarily traded or on the NASDAQ system for
unlisted national market issues, or at the last quoted bid price for
securities in which there were no sales during the day or for unlisted
securities not reported on the NASDAQ system. Short-term obligations with
remaining maturities of less than sixty days are valued at amortized cost,
which are valued at fair value as determined by the Board of Trustees of the
Fund. Fund securities (other than short-term obligations with remaining
maturities of less than sixty days) for which there are no such quotation or
valuations are valued at fair value as determined in good faith by or at the
direction of the Fund's Board of Trustees.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Substantially all of the Fund's net income from dividends and interest is paid
to the Fund's shareholders annually as a dividend, usually in December. For
this purpose, the Fund's net income from dividends and interest consists of
all income from dividends and interest accrued on the assets of the Fund, less
all actual and accrued expenses of the Fund determined in accordance with
generally accepted accounting principles.
The Fund also declares a long-term capital gain distribution to its
shareholders on an annual basis, usually in December, if the Fund's profits
during the year from the sale of securities held for longer than the
applicable long-term capital gains holding period exceeds the Fund's losses
during such year from the sale of securities together with the Fund's net
capital losses carried forward from prior years (to the extent not used to
offset short-term capital gains). The Fund's net short-term capital gains
realized during each fiscal year will also be distributed at that time. The
Fund will also make additional distributions to its shareholders to the extent
necessary to avoid application of the 4% non-deductible excise tax created by
the Tax Reform Act of 1986 on certain undistributed income and net capital
gains of mutual funds. A shareholder of the Fund may receive dividends and
capital gain distributions either in cash or in additional shares of the Fund.
Dividend and capital gain distributions in the form of cash or checks which
are either (1) returned and marked as "undeliverable" or (2) uncashed for six
months, will be changed automatically and future dividend and capital gain
distributions will be reinvested in the Fund at the net asset value per share
determined as of the date of payment of
23
<PAGE>
the distribution. Additionally, any undeliverable checks or checks that remain
uncashed for six months will be canceled and will be reinvested in the Fund at
the net asset value per share determined as of the date of cancellation.
EXPENSES
All expenses incurred in the operation of the Fund will be borne by the Fund
to the extent they do not exceed 1.95% of average net assets. Expenses in
excess of 1.95% will be assumed by the Investment Manager. These expenses
include: organizational costs; taxes; the execution, recording and settlement
of security transactions including brokerage fees and commissions; fees of
members of the Board of Trustees who are not officers, managers, employees or
holders of 5% or more of the beneficial interests of the Fund or its
affiliates; expenses relating to the issuance, registration and qualification
of shares of the Fund including Securities and Exchange Commission fees and
state Blue Sky qualification fees and the preparation, printing and mailing of
prospectuses for such purposes; fees to the Investment Manager for its
services as investment adviser and manager; fees to BISYS LP for its
administration services; fees to BISYS Inc. for its fund accounting, dividend
disbursement, registration and transfer agent services; fees to BNY Western
Trust Company for its custodial agent services; reimbursements to BISYS LP for
its distribution expenses pursuant to the Distribution Agreement (subject to
the cap set forth in the Distribution Plan); certain insurance premiums;
industry association fees; outside auditing and legal expenses; costs of
maintaining the Fund's existence; costs of independent pricing services; costs
attributable to investor services (other than those arranged by BISYS LP
pursuant to Distribution Agreement); costs of shareholders reports and
meetings; costs of preparing, printing and mailing certain prospectuses,
reports, notices, proxy statements and statements of additional information to
shareholders; and any extraordinary expenses.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Trust Instrument permits the Trustees to issue an unlimited number of full
and fractional shares of beneficial interest (par value $0.00001 per share)
and to divide or combine the shares into a greater or lesser number of shares
without thereby changing the proportionate beneficial interests in the Fund.
To date the Fund is the only series of shares issued under the Trust. However,
the Trust reserves the right to create and issue additional series of shares,
in which case the shares of each series would participate equally in the
dividends and assets of the particular series. The Trust may establish
additional classes of any series of shares. For example, the Trust may offer
another class of shares that has lower annual distribution fees or shareholder
servicing fees. Prior to offering another series of shares, the Trust would
either issue a new Prospectus and Statement of Additional information or amend
this Prospectus and the Statement of Additional Information to reflect such
issuances.
Each share of the Fund represents an equal proportionate interest in the Fund
with each other share. Shares have no preference, preemptive, conversion or
similar rights. Shares when issued are fully paid and nonassessable, except as
set forth below. Shareholders are entitled to one vote for each share held on
matters on which they are entitled to vote. There is no requirement for the
Trust, and the Board of Trustees has no current intention, of holding annual
meetings of shareholders of the Fund, although the special meetings of Fund
shareholders may be held when, in the judgment of the Board of Trustees, it is
necessary or desirable to submit matters for a shareholder vote. Shares of
each series will vote separately to approve matters specifically concerning
such series such as amendments to any plan of distribution under Section 12b-1
of the Investment Company Act, any changes in fundamental investment policies
or restrictions of such series, and the approval of any investment management
or advisory contract pertaining to such series (unless any of such matters
also affect other series, in which case all of such affected series shall vote
together). In any event, shares of all series will vote together in the
following matters: (1) the removal of Trustees; (2) the termination of the
Trust; (3) certain amendments of the Trust Instrument; and (4) on such
additional matters relating to the Trust as may be required or authorized by
law, the Trust Instrument or the By-laws. If holders
24
<PAGE>
of 10% or more of the Fund's outstanding shares so request, a meeting of the
Fund shareholders will be called. The Trust will assist in shareholder
communications as required by Section 16(c) of the Investment Company Act.
The Trust is an entity of the type commonly known as a "Delaware Business
Trust." Under Delaware law, shareholders of such a business trust are entitled
to the same limitation of personal liability extended to stockholders of a
corporation. Under the Trust Instrument, no shareholder shall be personally
liable for the debts, liabilities, obligations and expenses incurred by,
contracted for, or otherwise existing with respect to the Trust or any series.
The Trust Instrument contains an express disclaimer of shareholder liability
for acts or obligations of the Trust and provides for indemnification and
reimbursement of expenses out of Fund property for any shareholder held
personally liable for the obligations of a Fund or the Trust solely by reason
of his or her being or having been a shareholder. The Trust Instrument also
provides for the maintenance, by or on behalf of the Trust and the Fund, of
appropriate insurance (for example, fidelity bond and errors and omissions
insurance) for the protection of the Trust and the Fund, their shareholders,
trustees, officers, employees and agents, covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which Delaware
law did not apply, inadequate insurance existed, and the Fund itself was
unable to meet its obligations.
The Fund's Statement of Additional Information contains more detailed
information about the Fund, including information related to: (1) investment
policies and restrictions of the Fund; (2) the Trustees, officers, Investment
Manager, Administrator, Fund Accounting Agent, Transfer Agent and Custodian of
the Fund; (3) Portfolio transactions; (4) the Fund's shares, including rights
and liabilities of shareholders; (5) additional performance information,
including the method used to calculate yield and total rate of return
quotations of the Fund; and (6) determination of the net asset value of shares
of the Fund.
PERFORMANCE INFORMATION
Performance information concerning the Fund may from time-to-time be used in
advertisements, shareholder reports or other communications to shareholders.
The Fund may provide period and average annualized "total rates of return"
with respect to the Fund. The "total rate of return" of the Fund refers to the
change in the value of an investment in a Fund over a stated period based on
any change in net asset value per share and includes the value of any shares
purchasable with any dividends or capital gain distributions declared during
such period. Period total rates of return may be annualized. An annualized
total rate of return is a compounded total rate of return which assumes that
the period total rate of return is generated over a 52-week period, and that
all dividends and capital gain distributions are reinvested.
Historical total return information for any period or portion thereof prior to
the establishment of the Fund will be that of the Fund, adjusted to assume
that all charges, expenses and fees of the Fund which are presently in effect
were deducted during such periods.
From time to time, the Fund may also quote fund rankings from various sources,
such as Lipper Analytical Services, Inc., and may compare its performance to
that of unmanaged securities indices, such as the S&P 500 (Standard & Poor's
500 Composite Stock Price Index) and the Dow Jones Industrial Average.
"Standard & Poor's," "S&P" and "Standard & Poor's 500" are trademarks of
Standard & Poor's Corporation. See the Statement of Additional Information for
further information concerning the calculation of yield and any total rate of
return quotations. Since the Fund's yield and total rate of return quotations
are based on historical earnings and since such yield and rates of return
fluctuate over time, such quotations should not be considered as an indication
or representation of the future performance of the Fund.
25
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<PAGE>
MEYERS INVESTMENT TRUST
MEYERS PRIDE VALUE FUND
------------------
------------------
Trustees and Officers INVESTMENT MANAGER
Shelly J. Meyers Meyers Capital Management, LLC
Trustee (Chairman of the Board) 8901 Wilshire Boulevard
and President Beverly Hills, California 90211
Leslie C. Sheppard DISTRIBUTOR AND ADMINISTRATOR
Trustee and
Executive Vice President BISYS Fund Services Limited
Partnership
Robert E. Gipson, Esq. 3435 Stelzer Road
Trustee Columbus, Ohio 43219
Leonard Greenhalgh, M.B.A., Ph.D. FUND ACCOUNTING AGENT AND
Trustee TRANSFER AGENT
Duane E. McWaine, M.D. BISYS Fund Services, Inc.
Trustee 3435 Stelzer Road
Columbus, Ohio 43219
Mark Sichley
Vice President Custodian
BNY Western Trust Company
R. Elaine Noble 700 South Flower Street, Suite
Vice President 250
Los Angeles, California 90017
Frank Deutchki
Treasurer LEGAL COUNSEL
Philip McKinley Mayer, Brown & Platt
Secretary 1675 Broadway, Suite 1900
New York, New York 10019
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
<PAGE>
MEYERS PRIDE VALUE FUND
A separate portfolio of the Meyers Investment Trust
______________
8901 Wilshire Boulevard
Beverly Hills, California 90211
Telephone Number: (310) 657-9393
Facsimile Number: (310) 657-9380
STATEMENT OF ADDITIONAL INFORMATION
September 28, 1998
The Meyers Pride Value Fund (the "Fund") is organized as a separate series of
the Meyers Investment Trust (the "Trust"), a business trust organized under the
laws of the State of Delaware. The Fund was formerly known as the Meyers
Sheppard Pride Fund, and the Trust was formerly known as the Meyers Sheppard
Investment Trust.
The Fund is an open-ended no-load diversified mutual fund whose overall
investment objective is to attain long-term capital appreciation through
investing in a diversified portfolio of equity securities of under-valued but
nevertheless fundamentally sound companies which have been identified as
generally having progressive policies towards gays and lesbians, and at a
minimum having in place specifically stated policies against discrimination in
hiring and promotion based upon sexual orientation. See "Investment And Social
Objectives, Policies And Restrictions" herein.
This Statement of Additional Information sets forth information which may be of
interest to investors but which is not necessarily included in the Prospectus
for the Fund dated September 28, 1998, as amended or supplemented from time to
time. This Statement of Additional Information should be read in conjunction
with the Prospectus dated September 28, 1998, a copy of which may be obtained by
an investor without charge by contacting BISYS Fund Services Limited
Partnership, the Fund's Distributor, at 3435 Stelzer Road, Columbus, Ohio 43219,
or at (800) 410-3337. This Statement of Additional Information has been
incorporated into the Prospectus.
This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by an
effective prospectus and should be read only in conjunction with such
prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
The Fund........................................................ 2
Investment and Social Objectives, Policies and Restrictions..... 3
Risk Factors.................................................... 9
Tax Sheltered Retirement Plans.................................. 11
Investment Programs............................................. 13
Performance Information......................................... 13
Determination of Net Asset Value; Valuation of Fund Securities.. 14
Management of and Service Providers for the Trust and the Fund.. 15
Independent Auditors............................................ 24
Code of Ethics.................................................. 24
Taxation........................................................ 24
Fund Transactions and Brokerage Commissions..................... 25
Description of Shares, Voting Rights and Liabilities............ 27
Financial Statements............................................ 28
</TABLE>
<PAGE>
THE FUND
The Meyers Pride Value Fund (the "Fund") is organized as a separate series of
the Meyers Investment Trust (the "Trust"), a business trust organized under the
laws of the State of Delaware on March 25, 1996. The Fund is an open-ended, no-
load diversified management investment company whose overall investment
objective is to attain long-term capital appreciation through investing in a
diversified portfolio of equity securities of under-valued but nevertheless
fundamentally sound companies. The Fund will invest in securities of selected
companies which have been identified by Meyers Capital Management, LLC ("Meyers
Capital Management"), the Investment Manager of the Fund, as generally having
progressive policies towards gays and lesbians, but at a minimum having in place
specifically stated policies against discrimination in hiring and promotion
based upon sexual orientation. See "Investment And Social Objectives, Policies
And Restrictions" herein.
The Fund is the first series to be established under the Trust. As a
diversified fund, the Fund is required, by the Investment Company Act of 1940,
as amended (the "Investment Company Act"), with respect to 75% of its assets, to
invest no more than 5% of its assets in the securities of any one issuer and not
more than 10% of the outstanding voting securities of an issuer may be owned.
The Fund was formerly known as the Meyers Sheppard Pride Fund, until the
Trustees approved a change in the Fund's name to the Meyers Pride Value Fund on
January 3, 1997; and the Trust was formerly known as the Meyers Sheppard
Investment Trust, until the Trust's name was changed to the Meyers Investment
Trust pursuant to an amendment to the Trust's Certificate of Trust filed with
the Delaware Secretary of State on January 29, 1997.
The Fund's investment and social objectives and policies, including the
identification of companies which have progressive policies towards gays and
lesbians, are, with the exception of certain fundamental policies, determined by
the Investment Manager, subject to the Board of Trustees providing broad
supervision over the affairs of both the Fund and the Trust. The Fund has, to
date, identified over 350 publicly-traded companies meeting this criteria. A
majority of the Board of Trustees are not affiliated with the Investment
Manager.
The Investment Manager serves as the Fund's manager and investment adviser
pursuant to an Investment Management Agreement. As part of its management
function, the Investment Manager generally supervises (subject to the overall
authority of the Board of Trustees and officers of the Trust) the overall
administration of the Fund, including its various agents and service providers,
including those providing distribution, fund accounting, dividend disbursement,
transfer agent and custodian services. As part of its investment advisory
function, the Investment Manager manages the investments of the Fund day-to-day
in accordance with the Fund's investment and social objectives and policies, and
determines the composition of the securities which the Fund may invest (i.e.,
which companies designated by the Investment Manager as having anti-
discrimination policies in place and otherwise demonstrating progressive
policies towards gays and lesbians). For its management and investment advisory
services, the Investment Manager is entitled to receive from the Fund a monthly
fee equal, on an annual basis, to 1% of the Fund's average daily net assets.
See "Management Of And Service Providers For The Trust And Fund" herein.
Shares of the Fund are sold continuously by the Distributor of the Fund, BISYS
Fund Services Limited Partnership, an Ohio limited partnership ("BISYS LP"), at
the next determined net asset value per share. The minimum initial investment
in the Fund is generally $1,000, and subsequent minimum investments are $100. A
lower initial investment of $250 is permitted for Automatic Investment Plans and
for accounts opened under the Uniform Transfers to Minors Act, with subsequent
investments allowed at a minimum of $50. The Trust, on behalf of the Fund, has
adopted a Distribution Plan which permits reimbursement of certain expenses
incurred by the Distributor in connection with the distribution of shares of the
Fund, up to a maximum of 0.25% of net asset value annually.
The Fund offers to redeem shares of the Fund from its shareholders at any time
at next determined net asset value per share. The redemption price may be more
or less than the purchase price.
No sales load is charged with respect to either the purchase or redemption of
Fund shares. An investor should contact the Distributor regarding any further
information describing the procedures under which Fund shares may be purchased
and redeemed. See "Purchases And Redemptions" in the Prospectus.
2
<PAGE>
INVESTMENT AND SOCIAL OBJECTIVES, POLICIES AND RESTRICTIONS
Investment Objective and Social Objective
The overall investment objective of the Fund (the "Investment Objective") is to
attain long-term capital appreciation by investing in a diversified portfolio of
equity securities of undervalued but nevertheless fundamentally sound companies
which have been identified as having met the Social Objective. Companies which
meet the "Social Objective" are defined as companies which, in general, have
been identified as having progressive policies towards gays and lesbians, but at
a minimum have in place specifically stated policies against discrimination in
hiring and promotion based upon sexual orientation (the "Fundamental Social
Criteria").
The Fund believes that enterprises which are responsive toward addressing the
concerns of the gay and lesbian community and other progressive socially-
sensitive constituencies will benefit financially from the consumer loyalty
generated by such social awareness and will therefore be more likely to prosper
in the long-term. The Fund also believes such enterprises will be less likely
to incur certain legal liabilities that may arise when an enterprise is found to
discriminate against minorities, such as members of the gay and lesbian
community. The Fund believes such enterprises should also, over the longer
term, be able to generate additional stockholder market-value as an indirect
result of the greater investment in such enterprises, through the Fund, by the
gay and lesbian community (which, per capita, is one of the wealthiest
demographic groups in the United States), as well as supporters of the gay and
lesbian community.
Investment Strategy
In order to achieve the Investment Objective, the Fund will use a value-based
investment approach focusing on a longer-term market cycle (at least three to
five years), consistent with moderate levels of risk, wherein the Investment
Manager will identify companies exhibiting the following investment
characteristics: (1) low or inexpensive current value relative to earnings
estimates, cash flow, book value and/or break-up value; (2) good management; (3)
strong business fundamentals; and (4) positive earnings momentum.
The equity securities the Fund may invest in include common stocks, preferred
stocks and warrants, and certain debt instruments convertible into stock,
primarily in publicly-traded companies. Publicly-traded companies refers to
companies whose equity securities are traded over a national stock exchange or
over-the-counter through the National Association of Securities Dealers
Automatic Quotation ("NASDAQ") system or the National Association of Securities
Dealers, Inc. ("NASD") Electronic Bulletin Board. The Fund may invest in
companies in all ranges of capitalization. The Investment Manager expects that
no less than 60% of the Fund's net assets will be invested in equity securities
of "large capitalization" companies, which the Investment Manager defines as
companies with total capitalization of at least $2 billion.
Since it is anticipated that most equity securities will be held for the longer-
term using this strategy, the Investment Manager anticipates there will likely
be a low rate of portfolio turnover, and estimates annual portfolio turnover of
the Fund will be approximately 30% to 60%. The Fund's portfolio turnover rate
for the fiscal year or period ended May 31, 1997 and 1998 were 42.46% and
39.00%, respectively.
The Investment Manager expects that under normal market conditions the Fund will
typically invest up to 95% of its total assets (and sometimes virtually all of
its assets) in the equity securities described above and, subject to certain
limitations, certain options in these securities for hedging purposes. Under
distressed market conditions the Fund may maintain its assets in cash or cash-
equivalents, or invest in money-market instruments or obligations of the United
States government or government-sponsored enterprises and other types of
government-backed securities. Such investments would be temporary defensive in
nature and would not be expected to exceed 50% of the Fund's net assets.
Although returns on these assets are historically less than investment in equity
and other non-governmental types of securities, the risk of loss in investing in
such instruments is lower as well.
Identification of Companies Which Satisfy the Social Objective
The determination of which companies have satisfied the Social Objective, and
may therefore be considered as appropriate investment vehicles for the Fund, is
based upon recommendations of the Investment Manager and the approval by the
Board of Trustees. As of the date of this Prospectus, over 350 publicly-traded
companies have been identified as having satisfied the Social Objective.
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In making its recommendations, the Investment Manager evaluates companies based
upon (1) the Fundamental Social Criteria and (2) such additional criteria and
considerations consistent with the Social Objective as are determined reasonable
by the Investment Manager from time-to-time in its sole discretion, and approved
in general by the Board of Trustees (the "Non-Fundamental Social Criteria").
Such methodology is, by its nature, subjective.
As of the date of this Prospectus, the Non-Fundamental Social Criteria consists
of two separate areas of general focus; employee relations and corporate
citizenship.
In evaluating a company's gay and lesbian employee relations, the Investment
Manager evaluates the company's record and policies with respect to labor
matters affecting gay and lesbian employees, such as: (1) the company's
commitment to equal employment opportunity for gays and lesbians, both overall
and in executive positions, and the scope of the company's policies against
discrimination based upon sexual orientation; (2) the breadth, quality and
innovation of the company's employee benefit programs and their positive effect
on gay and lesbian employees (including inclusion of gay and lesbian partners
and families in employee benefit programs); and (3) the company's relationships
with gay and lesbian suppliers, vendors, and customers.
In evaluating a company's corporate citizenship, the Investment Manager reviews
the company's record on gay and lesbian related charitable giving and other
philanthropic activities and its interaction with the gay and lesbian community,
such as advertising in gay and lesbian directed publications or other media.
It is not necessary that a company satisfy all of the factors and considerations
described above in the Non-Fundamental Social Criteria in order to be identified
as having satisfied the Social Objective. However, every company must satisfy
the Fundamental Social Criteria in order to be included on the list of approved
companies.
The Investment Manager uses publicly available information in evaluating
companies. The Investment Manager also directly reviews company policies and,
in certain cases, discusses those policies with the company's management.
The Investment Manager intends to vote proxies of companies included in the Fund
consistent with the Social Objective. The inclusion of a company on the Fund's
list of approved companies with progressive policies towards gays and lesbians
does not imply that the company has requested it be included on the list or
approved such inclusion, has sought the approval of the Fund with respect to the
development and implementation of the company's employment or corporate
citizenship policies, or is affiliated with the Fund in any manner.
Investment Policies
The Fund will diversify its holdings to reduce the risks of investing. See
"Fundamental Investment Restrictions" and "Non-Fundamental State And Federal
Restrictions" below relative to the Fund's threshold diversification
requirements. If the Fund were to concentrate its investments in a single
industry, the Fund would be more susceptible to any single economic, political
or regulatory occurrence than would be another investment company which was not
so concentrated. See "Risk Factors" below.
The Fund may invest up to 10% of its total assets in convertible securities,
including bonds, debentures, notes, preferred stocks, warrants or other
securities that may be converted into or exchanged for a prescribed amount of
common stock of the same or a different issuer within a particular period of
time at a specified price or formula. Certain convertible securities may in
addition be callable, in whole or in part, at the option of the issuer. A
convertible security entitles the holder to receive interest paid or accrued on
debt or the dividend paid on preferred stock until the convertible security
matures or is redeemed, converted or exchanged. Before conversion, convertible
securities have characteristics similar to nonconvertible debt securities in
that they ordinarily provide a stable stream of income with generally higher
yields than those of common stocks of the same or similar issuers. Convertible
securities rank senior to common stock in a corporation's capital structure but
are usually subordinated to comparable nonconvertible securities. The
Investment Manager will limit investments in convertible securities to those
generally considered to be "investment grade" debt securities, which the
Investment Manager defines as being rated BBB or higher by Standard & Poor's
Corporation ("S&P") or Baa or higher by Moody's Investor Services ("Moody's").
The highest rated debt securities (securities rated AAA by S&P or Aaa by
Moody's) carry, in the opinion of such investment ratings agencies, the smallest
degree of investment risk and the capacity to pay interest and repay principal
is very strong. See "Fundamental Investment Restrictions" and "Non-Fundamental
State And Federal
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Restrictions" below relative to the maximum percentage of Fund assets which can
be invested in convertible securities. Also see "Risk Factors" below.
The Fund may purchase a publicly-traded company's "restricted securities." These
securities are not registered for sale to the general public or are offered in
an exempt non-public offering under the Securities Act of 1933, as amended (the
"Securities Act"), including securities offered and sold to "qualified
institutional buyers" under Rule 144A under the Securities Act. See
"Fundamental Investment Restrictions" and "Non-Fundamental State And Federal
Restrictions" below relative to the maximum percentage of Fund assets which can
be invested in restricted securities. Also see "Risk Factors" below.
The Fund may invest cash reserves in (1) direct obligations and/or short-term
debt securities (i.e., securities having a remaining maturity of one year or
less) issued or guaranteed by agencies or instrumentalities of the United States
Government and/or (2) bankers' acceptances, commercial paper or certificates of
deposit, provided that the issuer satisfies the Social Criteria of the Fund.
The Fund's policy is to hold its assets in such securities pending readjustment
of its portfolio holdings of stocks in order to meet anticipated redemption
requests. Although the U.S. government provides financial support to U.S.
government sponsored agencies or instrumentalities, no assurance can be given
that it will always do so. The U.S. government and its agencies and
instrumentalities do not guarantee the market value of their securities;
consequently, the value of such securities will fluctuate.
The Fund may lend its securities to brokers, dealers and financial institutions,
provided that (1) the loan is secured continuously by collateral consisting of
U.S. Government securities or cash or letters of credit, which is marked to the
market daily to ensure that each loan is fully collateralized at all times; (2)
the Fund may at any time call the loan and obtain the return of the securities
loaned within five business days; (3) the Fund will receive any interest or
dividends paid on the securities loaned; and (4) the aggregate market value of
securities loaned will not at any time exceed 30% of the total assets of the
Fund. The Fund will earn income for lending its securities because cash
collateral pursuant to these loans will be invested in short-term money market
instruments. In connection with lending securities, the Fund may pay reasonable
finders, administrative and custodial fees. No such fees will be paid to any
person if it or any of its affiliates is affiliated with the Fund or the
Investment Manager. See "Risk Factors" below.
The Fund may enter into certain transactions in stock options for the purpose of
hedging against possible increases in the value of securities which are expected
to be purchased by the Fund or possible declines in the value of securities
which are held by the Fund. Generally, the Fund would only enter into such
transactions on a short-term basis pending readjustment of its holdings of
underlying stocks. The purchase of an option on an equity security provides the
holder with the right, but not the obligation, to purchase the underlying
security, in the case of a call option, or to sell the underlying security, in
the case of a put option, for a fixed price at any time up to a stated
expiration date. The holder is required to pay a non-refundable premium, which
represents the purchase price of the option. The holder of an option can lose
the entire amount of the premium, plus related transaction costs, but not more.
Upon exercise of the option, the holder is required to pay the purchase price of
the underlying security in the case of a call option, or deliver the security in
return for the purchase price in the case of a put option. Prior to exercise or
expiration, an option position may be terminated only by entering into a closing
purchase or sale transaction. This requires a secondary market on the exchange
on which the position was originally established. Each exchange on which option
contracts are traded has established a number of limitations governing the
maximum number of positions which may be held by a trader, whether acting alone
or in concert with others. The Investment Manager does not believe that these
trading and position limits would have an adverse impact on the possible use of
hedging strategies by the Fund. See "Risk Factors" below.
To the extent practicable, the Fund will attempt to be fully invested. The
ability of the Fund to meet its performance goals will depend to some extent on
the size and timing of cash flows into and out of the Fund as well as the Fund's
expenses. Adjustments in the securities holdings of the Fund to accommodate
cash flows will result in brokerage expenses. There can, of course, be no
assurance that the Fund will attain the Investment Objective. The investment
strategies used by the Fund to attain the Investment Objective may be changed
without approval by the shareholders of the Fund.
In accordance with the Investment Company Act, the Fund may invest a maximum of
up to 10% of the value of its total assets in securities of other investment
companies, and the Fund may own up to 3% of the total outstanding voting stock
of any one investment company. In addition, up to 5% of the value of the Fund's
total assets may be invested in the securities of any one investment company.
As an investor in an investment company, the Fund would bear its ratable share
of that investment company's expenses, including its administrative and advisory
fees. At the same time, the Fund would continue to pay its own investment
management fees and other expenses.
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The Fund will readjust its securities holdings periodically to the extent the
Investment Manager deems it prudent to do so. The timing and extent of
adjustments in the holdings of the Fund will reflect the Investment Manager's
judgment as to: (1) the appropriate portfolio mix to achieve the Investment
Objective of the Fund; (2) the appropriate balance between the goal of
correlating the holdings of the Fund with the Social Criteria of the Fund; (3)
the goals of minimizing transaction costs and keeping sufficient reserves
available for anticipated redemptions of shares; and (4) compliance with certain
restrictions of the Fund imposed by the Fund's investment policies, including
those mandated by the Investment Company Act. See "Fundamental Investment
Restrictions" below. There can be no assurance that any portfolio enhancement
strategies will be successful, and the performance of the Fund may as a result
be worse than if such strategies were not undertaken. The Board of Trustees of
the Fund will receive and review, at least quarterly, a report prepared by the
Investment Manager evaluating the performance of the Fund, and will consider
what action, if any, should be taken in the event of a significant change in the
performance of the Fund.
The Fund may make short sales of securities or maintain short positions in
securities provided an investment in the subject securities is otherwise
consistent with the Fund's Investment Objective and Social Objective. Pursuant
to the Investment Company Act, the Fund will maintain government securities and
certain other assets in amounts sufficient to cover the fair market value of
such sales and positions and margin posted with brokers for such sales and
positions. No more than 25% of the Fund's net assets will be used as collateral
for such short positions at any one time.
Fundamental Investment Restrictions
The Fund has adopted the following fundamental investment policies which may not
be changed without approval by holders of a majority of the outstanding shares
of the Fund, which as used in this Statement of Additional Information means the
vote of the lesser of: (1) 67% or more of the outstanding "voting securities"
of the Fund (as such term is defined in the Investment Company Act), present at
a meeting, if the holders of more than 50% of the outstanding "voting
securities" of the Fund are present or represented by proxy, or (2) more than
50% of the outstanding "voting securities" of the Fund. The Fund will not as a
matter of fundamental policy:
1. Borrow money, except from banks, and except that as a temporary measure for
extraordinary or emergency purposes the Fund may borrow an amount not to
exceed one-third of the current value of the net assets of the Fund
including the amount borrowed, moreover, the Fund may not purchase any
securities at any time at which borrowings exceed 5% of the total assets of
the Fund, taken in each case at market value (it is intended that the Fund
would borrow money only from banks and only to accommodate requests for the
withdrawal of all or a portion of a beneficial interest in the Fund while
effecting an orderly liquidation of securities) (for additional related
restrictions, see paragraph 1 under the caption "Non-Fundamental State and
Federal Restrictions" below). In the event that the asset coverage for the
Fund's borrowings falls below 300%, the Fund will reduce within three days
the amount of its borrowings in order to provide for 300% asset coverage.
2. Purchase any security or evidence of interest therein on margin, except that
the Fund may obtain such short-term credit as may be necessary for the
clearance of purchases and sales of securities and except that the Fund may
make deposits of initial deposit and variation margin in connection with the
purchase, ownership, holding or sale of options;
3. Write any put or call option or any combination thereof, provided that this
shall not prevent: (i) the purchase, ownership, holding or sale of warrants
where the grantor of the warrants is the issuer of the underlying
securities; or (ii) the purchase, ownership, holding or sale of options on
securities.
4. Underwrite securities issued by other persons, except insofar as the Fund
may technically be deemed an underwriter in selling a security.
5. Make loans to other persons except: (i) through the lending of securities
held by the Fund and provided that any such loans not exceed 30% of its
total assets (taken in each case at market value); or (ii) through the use
of repurchase agreements or the purchase of short-term obligations and
provided that not more than 10% of the Fund's net assets will be invested in
repurchase agreements maturing in more than seven days (for additional
related restrictions, see paragraph 6 immediately following).
6. Invest in securities which are subject to legal or contractual restrictions
on resale (other than repurchase agreements maturing in not more than seven
days and other than securities which may be resold pursuant to Rule 144
and/or Rule
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144A under the Securities Act of 1933 if the Investment Manager determines
that a liquid market exists for such securities) if, as a result thereof,
more than 15% of its net assets (taken at market value) would be so invested
(including repurchase agreements maturing in more than seven days).
7. Purchase or sell real estate (including limited partnership interests but
excluding securities secured by real estate or interests therein), interests
in oil, gas or mineral leases, commodities or commodity contracts in the
ordinary course of business (the Fund reserves the freedom of action to hold
and to sell real estate acquired as a result of the ownership of securities
by the Fund).
8. Make short sales of securities or maintain a short position unless: (i) at
all times when a short position is open the Fund owns an equal amount to
such securities or securities convertible into or exchangeable, without
payment of any further consideration, for securities of the same issue as,
and equal in amount to, the securities sold short; and (ii) the Fund
complies with the collateral requirements of the Investment Company Act and
not more than 25% of the Fund's net assets (taken in each case at market
value) is held as collateral for such sales at any one time.
9. Issue any senior security (as that term is defined in Section 18(f) of the
Investment Company Act) if such issuance is specifically prohibited by the
Investment Company Act or the rules and regulations promulgated thereunder,
except as appropriate to evidence a debt incurred without violating
paragraph 1 above.
10. As to 75% of the Fund's assets, purchase securities of any issuer if such
purchase at the time thereof would cause more than 5% of the Fund's assets
(taken at market value) to be invested in the securities of such issuer
(other than securities or obligations issued or guaranteed by the United
States or any agency or instrumentality of the United States), except that
for purposes of this restriction the issuer of an option shall not be deemed
to be the issuer of the security or securities underlying such contract.
11. Invest more than 25% of the Fund's assets in any one industry.
The Fund's fundamental policies also include its Investment Objective and
adherence to the Fundamental Social Criteria. Although adherence to the
Fundamental Social Criteria is a fundamental policy, the other factors and
considerations used by the Investment Manager in making its recommendations
consistent with the overall Social Objective and the Board in approving such
recommendations are discretionary and non-fundamental.
Whenever the Fund is requested to vote on a change in the investment
restrictions of the Fund, or the Investment Objective, the Fund will hold a
meeting of the shareholders of the Fund and will cast its vote as instructed by
the Fund's shareholders.
Non-Fundamental State and Federal Restrictions
In order to comply with certain state and federal statutes and regulatory
policies, the Fund will not as a matter of operating policy:
1. Borrow money for any purpose in excess of 10% of the total assets of the
Fund (taken in each case at cost) (moreover, the Fund will not purchase any
securities at any time at which borrowings exceed 5% of its total assets
{taken at market value}).
2. Pledge, mortgage or hypothecate for any purpose in excess of 10% of the net
assets of the Fund (taken in each case at market value), provided that
collateral arrangements with respect to options, including deposits of
initial deposit and variation margin, are not considered a pledge of assets
for purposes of this restriction.
3. Sell any security which the Fund does not own unless by virtue of its
ownership of other securities it has at the time of sale a right to obtain
securities, without payment of further consideration, equivalent in kind and
amount to the securities sold, and provided that if such right is
conditional the sale is made upon the same conditions.
4. Invest for the purpose of exercising control or management.
5. Purchase securities issued by any registered investment company, except by
purchase in the open market where no commission or profit to a sponsor or
dealer results from such purchase other than the customary broker's
commission, or except when such purchase, though not made in the open
market, is part of a plan of merger or
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consolidation; provided, however, the Fund will not purchase the securities
of any registered investment company if such purchase at the time thereof
would cause more than 10% of the total assets of the Fund (taken at the
greater of cost or market value) to be invested in the securities of such
issuers or would cause more than 3% of the outstanding voting securities of
any such issuer to be held by the Fund; and provided, further, that the Fund
may also purchase securities issued by any open-end investment company
provided, however, that the Fund will not purchase the securities of any
registered investment company if such purchase at the time thereof would
cause more than 10% of the total assets of the Fund (taken at the greater of
cost or market value) to be invested in the securities of such issuers or
would cause more than 3% of the outstanding voting securities of any such
issuer to be held by the Fund; and provided, further, that the Fund shall
not purchase securities issued by any open-end investment company.
6. Invest more than 15% of the net assets of the Fund (taken at the greater of
cost or market value) in securities that are illiquid or not readily
marketable (defined as a security that cannot be sold in the ordinary course
of business within seven days at approximately the value at which the Fund
has valued the security).
7. Invest more than 10% of the net assets of the Fund (taken at the greater of
cost or market value) in securities that are restricted as to resale by the
Securities Act of 1933, as amended (including Rule 144 and Rule 144A
securities).
8. Invest more than 10% of the net assets of the Fund (taken at the greater of
cost or market value) in securities that are issued by issuers which
(including the period of operation of any predecessor company or
unconditional guarantor of such issuer) have been in operation less than
three years (including predecessors).
9. Purchase securities of any issuer if such purchase at the time thereof would
cause it to hold more than 10% of any class of securities of such issuer,
for which purposes all indebtedness of an issuer shall be deemed a single
class and all preferred stock of an issuer shall be deemed a single class,
except that option contracts shall not be subject to this restriction.
10. Purchase or retain any securities issued by an issuer any of whose
officers, directors, trustees or security holders is an officer or Trustee
of the Fund, or is an officer or director of the Investment Manager (the
investment adviser and manager of the Fund), if after the purchase of the
securities of such issuer by the Fund one or more of such persons owns
beneficially more than 1/2 of 1% of the shares or securities, or both, all
taken at market value, of such issuer, and such persons owning more than
1/2 of 1% of such shares or securities together own beneficially more than
5% of such shares or securities, or both, all taken at market value.
11. Invest more than 5% of the Fund's net assets in warrants (valued at the
lower of cost or market), but not more than 2% of the Fund's net assets may
be invested in warrants not listed on the New York Stock Exchange or the
American Stock Exchange (notwithstanding the foregoing, warrants attached to
other securities are not subject to this limitation).
12. Make short sales of securities or maintain a short position, unless: (i)
at all times when a short position is open, the Fund owns an equal amount of
such securities or securities convertible into or exchangeable, without
payment of any further consideration, for securities of the same issue and
equal in amount to the securities sold short; and (ii) not more than 25% of
the Fund's net assets (taken at market value) is represented by such
securities, or securities convertible into or exchangeable for such
securities, at any one time.
13. Enter into options transactions unless: (i) each such option is traded on
an exchange; (ii) the aggregate premiums paid on all such options which are
held at any time by the Fund do not exceed 20% of the Fund's total net
assets; and (iii) the aggregate margin deposits required on all such futures
or options held at any time do not exceed 5% of the Fund's total assets.
Restrictions 1 through 13 are not fundamental and may be changed with respect to
the Fund by the Board of Trustees without approval by the Fund's shareholders or
its other investors. The Fund will comply with the state securities laws and
regulations of all states in which it is registered.
In order to permit the sale of the Shares in certain states, the Fund reserves
the right to may make commitments more restrictive than the investment policies
and restrictions set forth above. If the Fund determines that any such
commitment is not in its best interests, it may choose not to sell the Shares in
these states or seek a waiver in certain states.
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Percentage Restrictions
If a percentage restriction on investment or utilization of assets set forth
above or referred to in the Prospectus is adhered to at the time an investment
is made or assets are so utilized, a later change in percentage resulting from
changes in the value of the securities held by the Fund will not be considered a
violation of policy; provided that if at any time the ratio of borrowings of the
Fund to the net asset value of the Fund exceeds the ratio permitted by Section
18(f) of the Investment Company Act, the Fund will take the corrective action
required by Section 18(f).
RISK FACTORS
Investment Objective
There can be no assurance that the Fund will be able to attain its Investment
Objective. It should be noted that the limitation of the Fund's investments to
equity securities of companies with progressive policies towards gays and
lesbians will tend to limit the availability of investment opportunities to the
Fund compared to that for other investment companies that have a comparable
investment objective to that of the Fund.
Common Stocks
Common stocks, the most familiar type of equity securities, represent an equity
(ownership) interest in a corporation. Although equity securities have a
history of long-term growth in value, their prices fluctuate based on changes in
a company's financial condition and on overall market, economic and political
conditions. Smaller companies are especially sensitive to these factors.
Convertible Securities
While no securities investment is completely without risk, investments in
convertible securities of a corporation generally entail less risk than the
corporation's common stock, although the extent to which such risk is reduced
depends in large measure upon the degree to which the convertible security sells
above its value as a fixed income security. Convertible securities have unique
investment characteristics in that they generally: (1) have higher yields than
common stocks, but lower yields than comparable non-convertible securities; (2)
are less subject to fluctuation in value than the underlying stock since they
have fixed income characteristics; and (3) provide the potential for capital
appreciation if the market price of the underlying common stock increases. The
investment value of a convertible security is influenced by changes in interest
rates, with investment value declining as interest rates increase and increasing
as interest rates decline. The credit standing of the issuer and other factors
also may have an effect on the convertible security's investment value. The
conversion value of a convertible security is determined by the market price of
the underlying common stock. If the conversion value is low relative to the
investment value, the price of the convertible security is governed principally
by its investment value. Generally, the conversion value decreases as the
convertible security approaches maturity. To the extent the market price of the
underlying common stock approaches or exceeds the conversion price, the price of
the convertible security will be increasingly influenced by its conversion
value. A convertible security generally will sell at a premium over its
conversion value by the extent to which investors place value on the right to
acquire the underlying common stock while holding a fixed income security. The
Fund only intends to invest in convertible securities where the value of the
option is minimal and the convertible security trades on the basis of its
coupon.
Illiquid and Restricted Securities
The Fund may purchase a publicly-traded company's "restricted securities."
Restricted securities may not be traded on the public market except in
accordance with Rule 144 under the Securities Act, which mandates certain
holding periods, information dissemination requirements, and certain other
conditions, or Rule 144A to qualified institutional investors. Investing in
restricted securities will impair the liquidity of the Fund's portfolio to the
extent they cannot be publicly traded under Rule 144 or, if applicable,
qualified institutional investors become, for a time, uninterested in purchasing
these securities.
Securities of Foreign Issuers
Some of the securities included in the Fund may be those of foreign issuers
(provided that the securities are publicly-traded in the United States in the
form of American Depositary Receipts or similar instruments the market for which
is denominated in
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United States dollars). Securities of foreign issuers may present a greater
degree of risk (e.g., as a result of exchange rate fluctuation, tax provisions,
war or expropriation) than do securities of domestic issuers.
Loans of Securities
The Fund may lend its securities to brokers, dealers and financial institutions
provided, among other things, that the loan is secured continuously by
collateral consisting of U.S. Government securities or cash or letters of
credit, which is marked to the market daily to ensure that each loan is fully
collateralized at all times. Loans of securities involve a risk that the
borrower may fail to return the securities or may fail to provide additional
collateral.
Options
The Fund may enter into certain transactions involving stock options for the
purpose of hedging against possible increases in the value of securities which
are expected to be purchased by the Fund or possible declines in the value of
securities which are held by the Fund. Were the Fund to establish an option
position for the purpose of hedging against investment risks, it would do so
only if there appears to be a liquid secondary market therefor, there can be no
assurance that such a market will exist for any particular option contract at
any specific time. In that event, it may not be possible to close out a
position held by the Fund, and the Fund could be required to purchase or sell
the instrument or instruments underlying an option, make or receive a cash
settlement or meet ongoing variation margin requirements. The inability to
close out option positions also could have an adverse impact on the Fund's
ability to effectively hedge its portfolio.
The Fund will enter only into exchange-traded options. At all times when an
option position is outstanding, the Fund will maintain a segregated deposit with
the Fund's custodian of cash, money market instruments or high-quality
securities sufficient in order to cover the exposure of that position.
Short Positions
Short selling or short positions by the Fund involves the Fund selling a
security that it does not own, or it borrows from a broker. When the Fund
purchases the security to replace the borrowed security, if the value of the
security declines as anticipated, the Fund will profit to the extent of the
difference between the purchase price and the sales price. If the price of the
security increases, the Fund will suffer a loss. Short selling or short
positions by the Fund involve a risk that the price of the security will not
decrease, as anticipated, and the Fund will suffer a loss.
History of Operations; Experience of Investment Manager
The Trust is subject to all the risks incident to the creation of a new
business, including the absence of a long history of operation, and there can be
no guarantee that the Investment Objective of the Fund will be attained. Prior
to the commencement of operations of the Fund, the Investment Manager had no
previous experience in providing investment management services to an investment
company; however, the Investment Manager's designated Portfolio Manager for the
Fund has provided analytical and portfolio management services to investment
companies and institutional asset management clients, and the Vice President of
Operations of the Investment Manager and the Fund's Administrator, BISYS LP,
have provided operations, compliance and administrative services to investment
companies. See "Management Of And Service Providers For The Trust And The Fund"
below.
Investment Risks
There are market risks inherent in any investment, and there is no assurance
that the Fund will attain its Investment Objective or that any income will be
earned. Moreover, the application of the investment policies is basically
dependent upon the judgment of the Investment Manager. A prospective purchaser
of shares of the Fund should realize there are risks in any policy dependent
upon such judgment and that no representation is made that the Investment
Objective of the Fund will be attained or that there may not be substantial
loses in any particular investment. At any time, the value of the Fund's shares
may be more or less than the cost of such shares to the investor.
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TAX-SHELTERED RETIREMENT PLANS
The Trust does not offer a prototype tax-sheltered retirement plan. However,
banks, broker-dealers and other financial intermediaries may offer such plans
through which shares of the Fund may be purchased. These plans are more fully
described below. Persons who wish to establish a tax-sheltered retirement plan
should consult their financial institutions as to availability of such plans and
their own tax advisers or attorneys regarding their eligibility to do so and the
laws applicable thereto, such as the fiduciary responsibility provisions and
diversification requirements and the reporting and disclosure obligations under
the Employee Retirement Income Security Act of 1974, as amended. The Trust is
not responsible for compliance with such laws. Further information regarding
the retirement plans, including applications and fee schedules, may be obtained
upon request to the Fund.
Individual Retirement Account and Spousal Individual Retirement Account
The IRA is available to all individuals, including self-employed individuals,
who receive compensation for services rendered and wish to purchase shares of
the Fund. An IRA may also be established pursuant to a simplified employee
pension plan ("SEP"). Spousal Individual Retirement Accounts ("SPIRA") are
available to individuals who are otherwise eligible to establish an IRA for
themselves and whose spouses are treated as having no compensation of their own.
In general, the maximum deductible contribution to an IRA which may be made for
any one year is $2,000 or 100% of annual compensation included in gross income,
whichever is less. If an individual establishes a SPIRA, the maximum deductible
amount that the individual may contribute annually is the lesser of $2,250 or
100% of such individuals compensation included in his or her gross income for
such year; provided, however, that no more than $2,000 per year for either
individual may be contributed to either the IRA or SPIRA. Contributions to a
SEP (discussed below) are excluded from an employee's gross income and are
subject to different limitations.
All taxpayers, including those who are active participants in employer-sponsored
retirement plans, will be able to make fully deductible IRA contributions at the
same levels discussed above, if their adjusted gross income is less than the
following levels: $25,000 for single taxpayers and $40,000 for married taxpayers
who file joint returns.
Married taxpayers who file joint tax returns will generally be deemed to be
active participants if either spouse is an active participant under an employer-
sponsored retirement plan. In the case of taxpayers who are active participants
in employer-sponsored retirement plans and who have adjusted gross income which
exceeds the specified levels, deductible IRA contributions will be phased out on
the basis of adjusted gross income between $25,000 and $35,000 for single
taxpayers adjusted gross income of $10,000 and under for married taxpayers who
file separate returns, and combined adjusted gross income between $40,000 and
$50,000 for married taxpayers who file joint returns. The $2,000 IRA deduction
is reduced by $200 for each $1,000 of adjusted gross income in excess of the
following levels: $25,000 for single taxpayers, $40,000 for married taxpayers
who file joint returns, and $0 for married taxpayers who file separate returns.
In the case of a taxpayer who contributes to an IRA and a SPIRA, the $2,250 IRA
deduction is reduced by $225 for each $1,000 of adjusted gross income in excess
of $40,000.
Individuals who are ineligible to make fully deductible contributions may make
nondeductible contributions up to an aggregate of $2,000 in the case of
contributions (deductible and nondeductible) to an IRA and up to an aggregate of
$2,250 in the case of contributions (deductible and nondeductible) to an IRA and
SPIRA and the income upon all such contributions will accumulate tax free until
distribution.
In addition, a separate IRA may be established by a "rollover" contribution,
which may permit the tax-free transfer of assets from qualified retirement plans
under specified circumstances. A "rollover contribution" includes a lump sum
distribution received by an individual, because of severance of employment, from
a qualified plan and paid into an individual retirement account within 60 days
after receipt.
Dividends and capital gains earned on amounts invested in either an IRA or SPIRA
are automatically reinvested by the Trustee in shares of the Fund and accumulate
tax-free until distribution. Distributions from either an IRA or SPIRA prior to
age 59 1/2, unless made as a result of disability or death, may result in
adverse tax consequences and penalties. In addition, there is a penalty on
contributions in excess of the contribution limits and other penalties are
imposed on insufficient payouts after age 70 1/2.
11
<PAGE>
Simplified Employee Pension Plan
A SEP may be utilized by employers to provide retirement income to employees by
making contributions to employees SEP IRAs. Owners and partners may qualify as
employees. The employee is always 100% vested in contributions made under a
SEP. The maximum contribution to a SEP-IRA (an IRA established to receive SEP
contributions) is the lesser of $30,000 or 150% of compensation, excluding
contributions made pursuant to a salary reduction arrangement. Subject to
certain limitations, an employer may also make contributions to a SEP-IRA under
a salary reduction arrangement by which the employee elects contributions to a
SEP-IRA in lieu of immediate cash compensation. The maximum amount which may be
contributed to a SEP-IRA (for 1995) under a salary reduction agreement is the
lesser of $30,000 (as adjusted for cost of living increases) or 15% of
compensation up to a current annual compensation limit of $150,000.
Contributions by employers under a SEP arrangement up to the maximum permissible
amounts are deductible for federal income tax purposes. Contributions up to the
maximum permissible amounts are not included in the gross income of the
employee. Dividends and capital gains on amounts invested in SEP-IRAs are
automatically reinvested in shares of the Fund and accumulate tax-free until
distribution. Contributions in excess of the maximum permissible amounts may be
withdrawn by the employee from the SEP-IRA no later than April 15 of the
calendar year following the year in which the contribution is made without tax
penalties. Such amounts will, however, be included in the employee's gross
income. Withdrawals of such amounts after April 15 of the year next following
the year in which the excess contributions is made and withdrawals of any other
amounts prior to age 59 1/2, unless made as a result of disability or death, may
result in adverse tax consequences.
Qualified Pension Plans
The Qualified Pension Plan can be utilized by self-employed individuals,
partnerships and corporations and their employees who wish to purchase shares of
a Fund under a retirement program.
The maximum contribution which may be made to a Qualified Pension Plan in any
one year on behalf of a participant is, depending on the benefit formula
selected by the Employer, up to the lesser of $30,000 or 25% of compensation
(net earned income in the case of a self-employed individual). Contributions by
Employers to Qualified Pension Plans up to the maximum permissible amounts are
deductible for Federal income tax purposes. Contributions in excess of
permissible amounts will result in adverse tax consequences and penalties to the
Employer. Dividends and capital gains earned on amounts invested in Qualified
Pension Plans are automatically reinvested in shares of the Fund and accumulate
tax-free until distribution. Withdrawals of contributions prior to age 59 1/2,
unless made as a result of disability, death or early retirement, may result in
adverse tax consequences and penalties.
403(b)(7) Program
The Tax-Deferred Annuity Program and Custodial Account offered by the Fund (the
"403(b)(7) Program") allows employees of certain tax exempt organizations and
schools to have a portion of their compensation set aside for their retirement
years in shares held in an investment company custodial account.
In general, the maximum limit on annual contributions for each employee is the
lesser of $30,000 per year (as adjusted by the IRS for cost-of-living
increases), 25% of the employee's compensation or the employee's exclusion
allowance specified in Section 403(b) of the Code. However, an employee's
salary reduction contributions to a 403(b)(7) Program may not exceed $9,500 a
year (reduced by salary reductions made under other tax-sheltered plans).
Contributions in excess of permissible amounts may result in adverse tax
consequences and penalties. Dividends and capital gains on amounts invested in
the 403(b)(7) Program are automatically reinvested in shares of the Fund. It is
intended that dividends and capital gains on amounts invested in the 403(b)(7)
Program will accumulate tax-free until distribution.
Employees will receive distributions from their accounts under the 403(b)(7)
Program following termination of employment by retirement or at such other time
as the employer shall designate, but in no case later than an employee's
reaching age 65. Withdrawals of contributions prior to age 59 1/2, unless made
as a result of disability, death or early retirement, may result in adverse tax
consequences and penalties. Employees will also receive distributions from
their accounts under the 403(b)(7) Program in the event they become disabled.
12
<PAGE>
INVESTMENT PROGRAMS
Automatic Investment Plan
Investors may periodically invest, through banks, broker-dealers and other
financial intermediaries offering automatic payment services, a specified dollar
amounts in periodic intervals into the Fund (the "Automatic Investment Plan").
The minimum initial investment under the Automatic Investment Plan is $250, with
subsequent minimum investments of $50. Payments under the Automatic Investment
Plan are automatic and will continue until such time as the Fund and the
investor's financial institution are notified to discontinue further
investments. See "Purchases And Redemptions Of Shares" in the Prospectus.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction with the
section in the Fund's Prospectus entitled "Performance Information."
Total Return
For purposes of quoting and comparing the performance of the Fund to that of
other mutual funds and to stock or other relevant indices in advertisements or
in reports to shareholders, performance may be stated in terms of total return.
Under the rules of the Securities and Exchange Commission, a fund's advertising
performance must include total return quotes calculated according to the
following formula:
P(1 + T)/n/ = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value at the end of the 1, 5 or
10 year periods (or fractional portion thereof) of a
hypothetical $1,000 payment made at the beginning of
the 1, 5 or 10 year periods.
Under the foregoing formula, the time periods used in advertising will be based
on rolling calendar quarters, updated to the last day of the most recent quarter
prior to submission of the advertisement for publication, and will cover one,
five and ten year periods or a shorter period dating from the effectiveness of
the Fund's registration statement. Total return, or "T" in the formula above,
is computed by finding the average annual compounded rates of return over the
one, five and ten year periods (or fractional portion thereof) that would equate
the initial amount invested to the ending redeemable value. The Fund may also
from time to time include in such advertising an aggregate total return figure
or a total return figure that is not calculated according to the formula set
forth above in order to compare more accurately the Fund's performance with
other measures of investment return. For example, in comparing the Fund's total
return with data published by Lipper Analytical Services, Inc., CDA Investment
Technologies, Inc. or Weisenberger Investment Company Service, or with the
performance of the Standard & Poor's 500 Stock Index or the Dow Jones Industrial
Average, as appropriate, the Fund may calculate its aggregate and/or average
annual total return for the specified periods of time by assuming the investment
of $1,000 in Fund shares and assuming the reinvestment of each dividend or other
distribution at net asset value on the reinvestment date. Such alternative
total return information will be given no greater prominence in such advertising
than the information prescribed under the rules of the Securities and Exchange
Commission, and all advertisements containing performance data will include a
legend disclosing that such performance data represent past performance and that
the investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
The following table sets forth the average annual total returns for the Fund for
certain time periods ending May 31, 1998.
<TABLE>
<CAPTION>
Meyers Pride Value Fund
-----------------------
<S> <C>
One Year................................... 20.56%
Since Inception (June 13, 1996)............ 21.86%
</TABLE>
13
<PAGE>
The Fund may also advertise its yield. Under the rules of the Securities and
Exchange Commission, the Fund's advertised yield must be calculated using the
following formula:
YIELD = [(a-b +1)/6/ - 1]
---
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period (net of reimbursement).
c = the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d = the maximum offering price per share on the last day of
the period.
Under the foregoing formula, yield is computed by compounding semi-annually, the
net investment income per share earned during a 30 day period divided by the
maximum offering price per share on the last day of the period. For the purpose
of determining the interest earned (variable "a" in the formula) on debt
obligations that were purchased by the Fund, the formula generally calls for
amortization of the discount or premium; the amortization schedule will be
adjusted monthly to reflect changes in the market values of the debt
obligations.
Yield may fluctuate daily and does not provide a basis for determining future
yields. Because the yields will fluctuate, they cannot be compared with yields
on savings account or other investment alternatives that provide an agreed to or
guaranteed fixed yield for a stated period of time. However, yield information
may be useful to an investor considering temporary investments in money market
instruments. In comparing the yield of one money market fund to another,
consideration should be given to each fund's investment policies, including the
types of investments made, lengths of maturities of the Fund securities (the
method used by the Fund to compute the yield methods may differ) and whether
there are any special account charges which may reduce the effective yield.
The yields on certain obligations are dependent on a variety of factors,
including general money market conditions, conditions in the particular market
for the obligation, the financial condition of the issuer, the size of the
offering, the maturity of the obligation and the ratings of the issue. The
ratings of Moody's and Standard & Poor's represent their respective opinions as
to the quality of the absolute standards of quality. Consequently, obligations
with the same rating, maturity and interest rate may have different market
prices. In addition, subsequent to its purchase by the Fund, an issue may cease
to be rated or may have its rating reduced below the minimum required for
purchase. In such an event, the Investment Manager will consider whether the
Fund should continue to hold the obligation.
DETERMINATION OF NET ASSET VALUE;
VALUATION OF FUND SECURITIES
The net asset value of each share of the Fund is determined each day on which
the New York Stock Exchange is open for trading (a "Fund Business Day"). (As of
the date of this Statement of Additional Information, the New York Stock
Exchange is open for trading every weekday except for the following holidays:
New Year's Day, Martin Luther King Jr.'s Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day).
This determination of net asset value of shares of the Fund is made once during
each such day at 4:00 p.m., New York time, by dividing the value of the Fund's
net assets (i.e., the value of its investment in the Fund and any other assets
less its liabilities, including expenses payable or accrued) by the number of
shares outstanding at the time the determination is made. Purchases and
redemptions will be effected at the time of determination of net asset value
next following the receipt of any purchase or redemption order deemed to be in
good order. See "Purchases And Redemptions Of Shares" in the Prospectus.
Equity securities held by the Fund are valued at the last sale price on the
exchange on which they are primarily traded or on the NASDAQ system for unlisted
national market issues, or at the last quoted bid price for securities in which
there were no sales during the day or for unlisted securities not reported on
the NASDAQ system. If the Fund purchases option contracts, such option
contracts which are traded on commodities or securities exchanges are normally
valued at the settlement price on the
14
<PAGE>
exchange on which they are traded. Short-term obligations with remaining
maturities of less than 60 days are valued at amortized cost, which constitutes
fair value as determined by the Board of Trustees of the Fund. Fund securities
(other than short-term obligations with remaining maturities of less than sixty
days) for which there are no such quotations or valuations are valued at fair
value as determined in good faith by or at the direction of the Fund's Board of
Trustees.
A determination of value used in calculating net asset value must be a fair
value determination made in good faith utilizing procedures approved by the
Fund's Board of Trustees. While no single standard for determining fair value
exists, as a general rule, the current fair value of a security would appear to
be the amount which the Fund could expect to receive upon its current sale.
Some, but not necessarily all, of the general factors which may be considered in
determining fair value include: (1) the fundamental analytical data relating to
the investment; (2) the nature and duration of restrictions on disposition of
the securities; and (3) an evaluation of the forces which influence the market
in which these securities are purchased and sold. Without limiting or including
all of the specific factors which may be considered in determining fair value,
some of the specific factors include: type of security, financial statements of
the issuer, cost at date of purchase, size of holding, discount from market
value, value of unrestricted securities of the same class at the time of
purchase, special reports prepared by analysts, information as to any
transactions or offers with respect to the security, existence of merger
proposals or tender offers affecting the security, price and extent of public
trading in similar securities of the issuer or comparable companies, and other
relevant matters.
Interest income on short-term obligations held by the Fund is determined on the
basis of interest accrued less amortization of premium.
MANAGEMENT OF AND SERVICE PROVIDERS FOR THE TRUST AND THE FUND
Trustees and Officers of the Fund
The Trustees and officers of the Fund and their ages and principal occupations
during the past five years are set forth below. Asterisks indicate that those
Trustees and officers are "interested persons" (as defined by the Investment
Company Act) of the Fund. Unless otherwise indicated below, the address of each
Trustee and officer is 8901 Wilshire Boulevard, Beverly Hills, California 90211.
15
<PAGE>
<TABLE>
<CAPTION>
Positions(s) Held
Name and Address Age with Registrant Occupation(s) During Past 5 Years
- ---------------- --- ----------------- ---------------------------------
<S> <C> <C> <C>
Shelly J. Meyers* 39 Trustee (Chairman Chief Executive Officer and Chief Financial Officer of Meyers Capital
of the Board) and Management, LLC (formerly known as Meyers Sheppard & Co., LLC), since
President February 1996; President of Meyers Capital Management, LLC, from
February 1996 through September 1996; Assistant Vice President,
Institutional Asset Management for The Boston Company Asset
Management, Inc., from July 1994 through February 1995; Associate,
The Boston Company Asset Management, Inc., June 1993 to September
1993; Lead Analyst, International Audit, Chevron Corporation, from
June, 1989 through September, 1992.
Leslie C. Sheppard* 44 Trustee and Executive Independent Real Estate Portfolio Manager since May 1998; Asset
Vice President Manager at GMAC/RFC from March 1997 through May 1998; Manager and
Senior Vice President of Meyers Capital Management, LLC (formerly
known as Meyers Sheppard & Co., LLC), from February 1996 through
December 1996; Sales Representative, Fannie Mae, from 1993 through
February 1996; Investment Banking Principal and Asset Manager - Real
Estate, Takenaka & Co., from 1989 through 1992.
Robert E. Gipson, Esq. 52 Trustee Attorney, Gipson, Hoffman & Pancione, a Professional Corporation,
Gipson Hoffman & Pancione since 1982.
1900 Avenue of the Stars
Suite 1100
Los Angeles, CA 90067
Leonard Greenhalgh, Ph.D. 54 Trustee Professor of Management, Amos Tuck School of Business Administration,
Amos Tuck School of Dartmouth College, since 1978.
Business Administration at
Dartmouth College
Hanover, NH 03755
</TABLE>
16
<PAGE>
<TABLE>
<S> <C> <C> <C>
Duane E. McWaine, M.D. 40 Trustee Psychiatrist in solo private practice, since 1988.
1314 Westwood Boulevard
Suite 101-D
Los Angeles, CA 90024
Mark Sichley 40 Vice President Associate Manager, BISYS Fund Services, Inc., since 1987.
BISYS Fund Services
1230 Columbia Street
Suite 500
San Diego, CA 92101
R. Elaine Noble 54 Vice President Project Director for Healthcare, Corporate Realty Investments, from
50 Melrose Street June 1997 to January 1998; Consultant, E. Noble Associates, from
Boston, MA 02116 February 1995 through May 1997; Corporate Investment Manager,
MediTrust, Inc., from May 1994 to January 1995; Assistant to the
Chairman of the Board, Greenery Rehabilitation Group, from June 1984
through June 1993.
Frank Deutchki 44 Treasurer Compliance Officer, BISYS Fund Services, Inc., since April 1996;
BISYS Fund Services formerly Vice President, Chase Global Funds Service, from September
3435 Stelzer Road 1995 to April 1996; Vice President, Mutual Funds Service Company,
Columbus, Ohio 43219 from 1989 to September 1995.
Philip McKinley 40 Secretary Vice President of Operations of Meyers Capital Management, LLC
(formerly known as Meyers Sheppard & Co., LLC), since April, 1996;
Vice President, Compliance, of Griffin Financial Services and The
Griffin Funds, from September 1994 to March 1996; Vice President,
Investments, of Mercantile National Bank, March 1991 to September
1994.
</TABLE>
17
<PAGE>
Compensation Table
The following table shows the compensation paid by the Trust to the Trustees for
the Fund's fiscal year ended May 31, 1998:
<TABLE>
<CAPTION> Total Compensation
Aggregate Pension or Retirement Estimated Annual from Trust and Fund
Compensation from Benefits Accrued as Benefits upon Complex Paid to
Name of Trustee The Fund Part of Fund Expenses Retirement Trustees
- --------------- ----------------- --------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Shelly J. Meyers None None None None
Leslie C. Sheppard None None None None
Robert E. Gipson $3,000 None None $3,000
Leonard Greenhalgh $3,000 None None $3,000
Duane E. McWaine $3,000 None None $3,000
</TABLE>
The Trust pays $2,000 in fees per annum to each Trustee who is not a manager,
officer, employee or holder of 5% or more of the Investment Manager, its
affiliates, or any Fund service provider, plus $250 per meeting attended by such
Trustee, together with such Trustees' out-of-pocket expenses related to
attendance at meetings of the Board of Trustees. Executive officers of the
Trust will receive no compensation from the Trust for their services as such.
The Trust does not have a pension or retirement plan applicable to Trustees or
officers of the Trust. All Trustees and officers as a group own less than 1% of
the outstanding shares of the Fund as of August 31, 1998.
Investment Manager
The Fund has engaged the Investment Manager, Meyers Capital Management, to serve
as both the manager and the investment adviser for the Fund pursuant to an
Investment Management Agreement approved by the Board of Trustees. The
Investment Manager is a California limited liability company organized on
January 23, 1996. The manager and principal owner of the Investment Manager is
Ms. Shelly J. Meyers. The officers of the Investment Manager are Ms. Meyers,
Chief Executive Officer and Chief Financial Officer; and Mr. Philip McKinley,
Vice President of Operations and Secretary. Mr. McKinley is an owner of the
Investment Manager.
18
<PAGE>
The Investment Manager provides its services as the Fund's manager and
investment adviser pursuant to an Investment Management Agreement approved by
the Board of Trustees.
As the Fund's manager, the Investment Manager oversees (subject to the overall
authority of the Board of Trustees) the overall operations and administration of
the Fund, including the supervision of professional services rendered by others,
including the Distributor, Administrator, Transfer Agent, and Custodian, as well
as accounting, auditing and other services.
As the Fund's investment adviser, the Investment Manager implements the
Investment Strategy of the Fund and manages the Fund's investments subject to
the Fund's Investment Objective and Fundamental Social Criteria and the overall
supervision and approval by the Board of Trustees. Specifically, the Investment
Manager determines, from amongst the universe of companies identified as
satisfying the Social Objective, which companies the Fund should invest in, what
the appropriate mix of investments amongst such companies should be, and the
timing and extent of adjustments in the holdings of the Fund to satisfy the
requirements of diversification and the need to maintain sufficient reserves for
anticipated redemptions of shares. The Investment Manager also has sole
discretion to select brokers for purchases and sales. Although the Investment
Manager's investment advisory activities are subject to general oversight by the
Trustees and officers of the Fund, neither the Trustees nor officers of the Fund
evaluate the merits of the Investment Manager's selection of individual
securities from amongst designated companies with progressive policies towards
gays and lesbians.
The Investment Manager furnishes at its own expense all facilities and personnel
necessary in connection with providing these services.
The Investment Management Agreement continues in effect if such continuance is
specifically approved at least annually by the Fund's Board of Trustees or by a
majority vote of the shareholders of the Fund at a meeting called for the
purpose of voting on the Investment Management Agreement (with the vote of each
being in proportion to the amount of their investment), and, in either case, by
a majority of the Fund's Trustees who are not parties to the Investment
Management Agreement or interested persons of any such party at a meeting called
for the purpose of voting on the Investment Management Agreement.
The Investment Management Agreement provides that the Investment Manager may
render both management and investment advisory services to others. The
Investment Management Agreement is terminable without penalty on not more than
60 days written notice by the Fund when authorized either by majority vote of
the shareholders in the Fund (with the vote of each being in proportion to the
amount of their investment) or by a vote of a majority of its Board of Trustees,
or by the Investment Manager, and will automatically terminate in the event of
its assignment. The Investment Management Agreement provides that neither the
Investment Manager nor its personnel shall be liable for any error of judgment
or mistake of law or for any loss arising out of any investment or for any act
or omission in its services to the Fund, except for willful misfeasance, bad
faith or gross negligence or reckless disregard of its or their obligations and
duties under the Investment Management Agreement.
Pursuant to the terms of the Investment Management Agreement, the Fund pays the
Investment Manager for its management and investment advisory services, a
monthly fee equal, on an annual basis, to 1% of the Fund's average daily net
assets. The Investment Manager reserves the right of any time to reduce and/or
waive all or part of its fees. The Investment Manager had undertaken in its
initial Registration Statement to waive the portion of its investment management
fee necessary to maintain Total Annual Operating Expenses at no more than 2.25%
per year of average daily net assets, and subsequently agreed, effective January
31, 1997, to voluntarily waive an additional portion of its investment
management fee and assume and pay such portion of the Fund's expenses necessary
to maintain Total Annual Operating Expenses at no more than 1.95% per year of
average daily net assets. For the fiscal year or period ended May 31, 1997 and
1998, the Investment Manager earned $7,384 and $22,095, respectively, and waived
all of such fees.
Administrator
The Fund entered into an agreement with BISYS LP to provide the Fund with
administrative services effective January 1, 1997. Pursuant to the
Administration Agreement, BISYS LP generally performs or supervises the
performance by others of certain administrative services including, without
limitation, calculating Fund expenses and controlling disbursements; assisting
Fund counsel with preparing prospectuses, statements of additional information,
registration statements and proxy
19
<PAGE>
materials; preparing reports, applications and documents required for compliance
by the Fund with applicable federal and state laws and regulations; developing
and preparing communications to shareholders, including the Fund's Annual Report
and proxy materials; administering contracts between the Fund and other service
providers; coordinating and supervising the filing of the Fund's tax returns;
and monitoring and advising the Fund on its registered investment company status
under the Internal Revenue Code. BISYS LP also provides persons satisfactory to
the Board of Trustees of the Fund to serve as officers of the Fund. Such
officers, as well as certain other employees and Trustees of the Fund, may be
directors, officers or employees of BISYS LP or its affiliates.
As compensation for these services, the Fund pays BISYS LP, per year, an amount
equal to 0.15% of the first $100 million in aggregate Fund assets, 0.10% for the
next $400 million, 0.07% for the next $500 million, and 0.06% for aggregate Fund
assets in excess of $1 billion. Effective January 1, 1998, the fee amounts set
forth are subject to a minimum fee of $60,000 for the calendar year ending
December 31, 1998. Effective January 1, 1998, the fee amounts set forth are
subject to a minimum fee of $75,000 for the calendar year ending December 31,
1999. For the fiscal period ended May 31, 1997, BISYS LP and Furman Selz, LLC,
earned administrative fees of $98,000, which was to be reimbursed by the
Investment Advisor and/or a portion of which was subsequently waived by the
Administrator. For the fiscal year ended May 31, 1998, BISYS LP earned
administrative fees of $26,390.
BISYS LP will not be liable for any error of judgment or mistake of law or for
any loss suffered by the Fund in connection with the matters relating to the
Administration Agreement, except a loss from willful misfeasance, bad faith, or
negligence on its part in the performance of its duties or from reckless
disregard by BISYS LP of its obligations and duties. So long as BISYS LP acts
in good faith and with due diligence and without negligence, the Fund assumes
full responsibility to indemnify BISYS LP and hold it harmless from and against
any and all actions, suits and claims.
The term of the Administration Agreement shall be for a period ending December
31, 1999. The Administration Agreement shall be renewed automatically for
successive periods of two years after December 31, 1999 unless written notice of
non-renewal is provided by either party not less than 90 days prior to the end
of the then-current term.
The Fund's Administration Agreement with Furman Selz, LLC was terminated
effective January 1, 1997, and replaced with BISYS LP, as the result of the
acquisition of Furman Selz, LLC's mutual fund business by BISYS Fund Services.
Fund Accounting Agent
The Fund has entered into a Fund Accounting Agreement with BISYS Inc. to provide
the Fund with fund accounting services effective January 1, 1997. Under the
Fund Accounting Agreement, BISYS Inc. maintains books and records required under
Rule 31a-1 under the Investment Company Act, including journals containing an
itemized daily record of purchases and sales of securities and receipts and
disbursements of cash; ledgers reflecting all assets, liability and reserve
accounts; and a monthly trial balance of all ledger accounts. BISYS Inc. also
calculates the Fund's net asset value on a daily basis; obtains security prices
from independent pricing services; verifies and reconciles daily trade
activities; posts Fund transactions; provides accounting and periodic reports;
and provides information for the Fund's federal and state income tax returns,
audits and securities filings.
In consideration of its services under the Fund Accounting Agreement, effective
January 1, 1998, the Fund pays BISYS Inc. the sum of $30,000 per year, plus
reimbursement of its out-of-pocket expenses. For the fiscal period ended May
31, 1997, the Fund paid BISYS Inc. and Furman Selz, LLC, in the aggregate, fund
accounting fees of $36,594. For the fiscal year ended May 31, 1998, the Fund
paid to BISYS Inc. fund accounting fees of $34,771.
BISYS Inc. will not be liable for any action taken or omitted in the absence of
bad faith, willful misfeasance, negligence or reckless disregard. The Fund
shall indemnify and hold BISYS Inc. harmless from and against any and all
claims, demands, suits, judgments and liabilities other than actions or
omissions of BISYS Inc. in cases of its own bad faith, willful misfeasance,
negligence or reckless disregard.
20
<PAGE>
The term of the Fund Accounting Agreement shall be for a period ending December
31, 1999. The Fund Accounting Agreement shall be renewed automatically for
successive two-year terms unless written notice not to renew is given by the
non-renewing party to the other party at least 60 days prior to the expiration
of the then-current term.
The Fund's Fund Accounting Agreement with Furman Selz, LLC was terminated
effective January 1, 1997, and replaced with BISYS Inc., as the result of the
acquisition of Furman Selz, LLC's mutual fund business by BISYS Fund Services.
21
<PAGE>
Transfer Agent
The Fund has entered into a Transfer Agency Agreement with BISYS Inc. to provide
the Fund with dividend disbursing and transfer agency services, pursuant to a
Transfer Agency Agreement effective October 14, 1996. Pursuant to the Transfer
Agency Agreement, BISYS Inc. provides dividend disbursement, registrar and
transfer agency services to the Fund. Effective January 1, 1998, the Fund pays
BISYS Inc. the sum of $21 per year, per each shareholder, subject to a $15,000
per year minimum. BISYS Inc. shall also be reimbursed by the Fund for all costs
incurred by it. For the fiscal period ended May 31, 1997, the Fund paid to
BISYS Inc. and Furman Selz, LLC, in the aggregate, transfer agency fees of
$18,408. For the fiscal year ended May 31, 1998, the Fund paid to BISYS Inc.
transfer agency fees of $35,232.
BISYS Inc. will not be liable for any action taken or omitted in the absence of
bad faith, willful misfeasance, negligence or reckless disregard. The Fund
shall indemnify and hold BISYS Inc. harmless from and against any and all
claims, demands, suits, judgments and liabilities other than actions or
omissions of BISYS Inc. in cases of its own bad faith, willful misfeasance,
negligence or reckless disregard.
The term of the Transfer Agency Agreement shall be for a period ending December
31, 1999. The Transfer Agency Agreement shall be renewed automatically for
successive two-year terms unless written notice not to renew is given by the
non-renewing party to the other party at least 60 days prior to the expiration
of the then-current term.
The Fund's Transfer Agency Agreement with Furman Selz, LLC was terminated
effective October 14, 1996, and replaced with BISYS Inc., as the result of the
acquisition of Furman Selz, LLC's mutual fund business by BISYS Fund Services.
Distributor
The Fund has entered into a Distribution Agreement with BISYS LP as the Fund's
Distributor effective January 1, 1997. Under the Distribution Agreement, BISYS
is responsible for facilitating the continuous sale and redemption of Fund
shares.
Solely for the purpose of reimbursing BISYS LP for activities primarily intended
to result in the sale of Fund shares, the Trust has, on behalf of the Fund and
with the approval of the Board of Trustees, adopted a Plan of Distribution (the
"Distribution Plan") pursuant to Rule 12b-1 of Investment Company Act. Under
the Distribution Plan, the Fund is authorized to spend up to 0.25% of net asset
value annually for BISYS LP's services in anticipation of, or as reimbursement
for, expenses incurred in connection with the sale of shares of the Fund, such
as payments to broker-dealers who advise shareholders regarding the purchase,
sale or retention of shares of the Fund, payments to employees of the
Distributor, advertising expenses and the expenses of printing and distributing
prospectuses and reports used for sales purposes, expenses of preparing and
printing sales literature and other distribution-related expenses. If the fee
received by the Distributor exceeds its expenses, it may realize a profit from
these arrangements. For the fiscal year or period ended May 31, 1997 and 1998,
the Fund incurred distribution fees of $1,974 and $5,524, respectively.
The Distribution Plan will continue in effect indefinitely if such continuance
is specifically approved at least annually by a vote of both a majority of the
Fund's Trustees and a majority of the Fund's Trustees who are not "interested
persons of the Fund" and who have no direct or indirect financial interest in
the operation of the Distribution Plan or in any agreement related to such Plan
(the "Qualified Trustees"). The Distributor provides to the Trustees of the
Fund a quarterly written report of amounts expended by it under the Distribution
Plan and the purposes for which such expenditures were made. The Distribution
Plan further provides that the selection and nomination of the Fund's Qualified
Trustees shall be committed to the discretion of the disinterested Trustees of
the Fund. The Distribution Plan may be terminated upon 60 days written notice
by a vote of a majority of the Fund's Qualified Trustees or by a vote of the
shareholders of the Fund on the one hand, or by 60 days written notice by BISYS
LP on the other hand. The Distribution Plan may not be amended to increase
materially the amount of permitted expenses thereunder without the approval of
shareholders and may not be materially amended in any case without a vote of the
majority of both the Fund's Trustees and the Fund's Qualified Trustees. The
Distributor will preserve copies of any plan, agreement or report made pursuant
to the Distribution Plan for a period of not less than six years from the date
of the Distribution Plan, and for the first two years the Distributor will
preserve such copies in an easily accessible place.
22
<PAGE>
The Fund's Distribution Agreement with Furman Selz, LLC was terminated effective
January 1, 1997, and was replaced with BISYS LP, as the result of the
acquisition of Furman Selz, LLC's mutual fund business by BISYS Fund Services.
Custodian
The Fund has entered into a Custodian Agreement with BNY Western Trust Company
(a subsidiary of The Bank of New York Company, Inc.) pursuant to which BNY
Western Trust Company acts as Custodian for the Fund. The Custodian's
responsibilities include safeguarding and controlling the Fund's cash and
securities, handling the receipt and delivery of securities, collecting interest
on the Fund's investments, and maintaining books of original entry for fund
accounting purposes.
23
<PAGE>
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP, Two Nationwide Plaza, Columbus, Ohio 43215, are the
independent auditors for the Fund, providing audit services, tax return
preparation, and consultation with respect to the preparation of filings with
the Securities and Exchange Commission.
CODE OF ETHICS
The Trust, on behalf of the Fund, adopted a Code of Ethics (the "Code of
Ethics"), which establishes standards by which certain access persons of the
Trust must abide relating to personal securities trading conduct. The Code of
Ethics provides that access persons shall place the interests of the
shareholders of the Fund first, shall avoid potential or actual conflicts of
interest with the Fund, and shall not take unfair advantage of their
relationship with the Fund. Access persons will be required by the Code of
Ethics to file quarterly reports of personal securities investment transactions.
The Code of Ethics provides that certain designated supervisory person(s) will
be appointed by the Trust, and shall supervise implementation and enforcement of
the Code of Ethics and shall, at their sole discretion, grant or deny approval
of transactions required by the Code of Ethics.
TAXATION
Each year the Fund intends to qualify and elect to be treated as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), by meeting all applicable requirements of Subchapter M, as
to the nature of the Fund's gross income, the amount of Fund distributions and
the composition and holding period of the Fund's assets. Because the Fund
intends to distribute all of its net investment income and net realized capital
gains to shareholders in accordance with the timing requirements imposed by the
Code, it is not expected that the Fund will be required to pay any federal
income or excise taxes. If the Fund should fail to qualify as a "regulated
investment company" in any year, the Fund would incur a regular corporate
federal income tax upon its taxable income (without deduction for dividends paid
to its shareholders) and Fund distributions would generally be taxable as
ordinary dividend income to the shareholders.
Shareholders of the Fund will have to pay federal income taxes and any state or
local income taxes on the dividends and capital gain distributions they receive
from the Fund. Dividends from ordinary income and any distributions from net
short-term capital gains are taxable to shareholders as ordinary income for
federal income tax purposes, whether the distributions are made in cash or in
additional shares. A portion of the Fund's ordinary income dividends is
normally eligible for the dividends received deduction for corporations if the
recipient otherwise qualifies for that deduction with respect to its holding of
Fund shares. Availability of the deduction for a particular shareholder is
subject to certain limitations, and deducted amounts may be subject to the
alternative minimum tax and result in certain basis adjustments. Distributions
of net capital gains (i.e., the excess of net long-term capital gains over net
short term capital losses), whether made in cash or in additional shares, are
taxable to shareholders as long-term capital gains without regard to the length
of time the shareholders have held their Fund shares.
24
<PAGE>
The maximum tax rate for individual taxpayers on net long-term capital gains
(i.e., the excess of net long-term capital gains over net short-term capital
loss) is 20%. A lower rate of 18% will apply after December 31, 2000 for assets
held for more than 5 years. However, the 18% rate applies only to assets
acquired after December 31, 2000 unless the taxpayer elects to treat an asset
held prior to such date as sold for fair market value on January 1, 2001. In the
case of individuals whose ordinary income is taxed at a 15% rate, the 20% rate
for assets held for more than 18 months is reduced to 10% and the 10% rate for
assets held for more than 5 years is reduced to 8%.
Amounts not distributed on a timely basis in accordance with the calendar year
distribution requirement are subject to a nondeductible 4% excise tax. To
prevent imposition of the excise tax, the Fund must, and intends to, distribute
during each calendar year substantially all of its ordinary income for that year
and substantially all of its capital gain in excess of its capital losses for
that year, plus any undistributed ordinary income and capital gains from
previous years. Any Fund dividend that is declared in October, November or
December of any calendar year, that is payable to shareholders of record in such
a month, and that is paid the following January will be treated as if received
by the shareholders on December 31 of the year in which the dividend is
declared. The Fund will notify shareholders regarding the federal tax status of
its distributions after the end of each calendar year.
Any Fund distribution will have the effect of reducing the per share net asset
value of shares in the Fund by the amount of the distribution. Shareholders
purchasing shares shortly before the record date of any distribution may thus
pay the full price for the shares and then effectively receive a portion of the
purchase price back as a taxable distribution.
In general, any gain or loss realized upon a taxable disposition of shares of
the Fund by a shareholder that holds such shares as a capital asset will be
treated as long-term capital gain or loss if the shares have been held for more
than 12 months and otherwise as a short-term capital gain or loss. However, any
loss realized upon a disposition of shares in the Fund held for six months or
less will be treated as a long-term capital loss to the extent of any
distributions of net capital gain made with respect to those shares. Any loss
realized upon a disposition of shares may also be disallowed under rules
relating to wash sales.
The Fund is organized as a Delaware business trust and, under current law, is
not liable for any income or franchise tax in the State of Delaware as long as
the Fund qualifies as a regulated investment company under the Code. The Fund's
fiscal year-end is May 31.
Fund shareholders may be subject to state and local taxes on Fund distributions
to them. Shareholders are advised to consult with their tax advisers with
respect to the particular tax consequences to them of an investment in the Fund.
FUND TRANSACTIONS AND BROKERAGE COMMISSIONS
Specific decisions to purchase or sell securities for the Fund are made by a
portfolio manager who is an employee of the Investment Manager and who is
appointed and supervised by its senior officers. Changes in the Fund's
investments are reviewed by its Board of Trustees. The portfolio manager
serving the Fund on behalf of the Investment Manager may serve other clients of
the Investment Manager in a similar capacity.
The Fund's primary consideration in placing securities transactions with a
broker-dealer for execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most effective manner
possible. The Investment Manager attempts to achieve this result by selecting a
broker-dealer to execute transactions on behalf of the Fund and other clients of
the Investment Manager based upon various relevant factors, including but not
limited to, the size and type of transaction, execution efficiency, the basis of
their professional capability, the value and quality of their brokerage
services,
25
<PAGE>
and the reasonableness of their brokerage commissions. In the case of securities
traded in the over-the-counter market (where no stated commissions are paid but
the prices include a dealer's markup or markdown), the Investment Manager
normally seeks to deal directly with the primary market makers, unless in its
opinion, best execution is available elsewhere. In the case of securities
purchased from underwriters, the cost of such securities generally includes a
fixed underwriting commission or concession. From time to time, soliciting
dealer fees are available to the Investment Manager on the tender of the Fund's
securities in so-called tender or exchange offers. Such soliciting dealer fees
are in effect recaptured for the Fund by the Investment Manager. At present no
other recapture arrangements are in effect. Consistent with the foregoing
primary consideration, the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and such other policies as the Trustees of the Fund may
determine, the Investment Manager may consider sales of shares of the Fund and
of securities of other investors as a factor in the selection of broker-dealers
to execute the Fund's securities transactions.
Under the Investment Management Agreement with the Investment Manager, and as
permitted by Section 28(e) of the Securities Exchange Act of 1934, as amended,
Meyers Capital Management may cause the Fund to pay a broker-dealer acting on an
agency basis which provides brokerage and research services to the Investment
Manager an amount of commission for effecting a securities transaction for the
Fund in excess of the amount other broker-dealers would have charged for the
transaction if the Investment Manager determines in good faith that the greater
commission is reasonable in relation to the value of the brokerage and research
services provided by the executing broker-dealer viewed in terms of either a
particular transaction or the Investment Manager's overall responsibilities to
the Fund or to its other clients. Not all of such services are useful or of
value in advising the Fund.
The term "brokerage and research services" includes advice as to the value of
securities, the advisability of investing in, purchasing, or selling securities,
and the availability of securities or of purchasers or sellers of securities;
furnishing analyses and reports concerning issues, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts;
and effecting securities transactions and performing functions incidental
thereto such as clearance and settlement.
Although commissions paid on every transaction will, in the judgment of the
Investment Manager, be reasonable in relation to the value of the brokerage
services provided, commissions exceeding those which another broker might charge
may be paid to broker-dealers who were selected to execute transactions on
behalf of the Fund and the Investment Manager's other clients, in part for
providing advice as to the availability of securities or of purchasers or
sellers of securities and services in effecting securities transactions and
performing functions incidental thereto such as clearance and settlement.
Certain broker-dealers may be willing to furnish statistical, research and other
factual information or services to the Investment Manager for no consideration
other than brokerage or underwriting commissions.
The Investment Manager attempts to evaluate the quality of research provided by
brokers. The Investment Manager sometimes uses evaluations resulting from this
effort as a consideration in the selection of brokers to execute portfolio
transactions. However, the Investment Manager is able to quantify the amount of
commissions which are paid as a result of such research because a substantial
number of transactions are effected through brokers which provide research but
which are selected principally because of their execution capabilities.
The fees that the Fund pays to the Investment Manager will not be reduced as a
consequence of the Fund's receipt of brokerage and research services. To the
extent the Fund's securities transactions are used to obtain brokerage and
research services, the brokerage commissions paid by the Fund will exceed those
that might otherwise be paid for such portfolio transactions and research, by an
amount which cannot be presently determined. Such services may be useful and of
value to the Investment Manager in serving both the Fund and other clients and,
conversely, such services obtained by the placement of brokerage business of
other clients may be useful to the Investment Manager in carrying out its
obligations to the Fund. While such services are not expected to reduce the
expenses of the Investment Manager, the Investment Manager would, through use of
the services, avoid the additional expenses which would be incurred if it should
attempt to develop comparable information through its own staff. For the fiscal
year ended May 31, 1998, the Fund paid $4,672 in brokerage commissions.
The Fund will not engage in brokerage transactions with the Investment Manager
(Meyers Capital Management) or the Administrator (BISYS LP) or any of their
respective affiliates or any affiliate of the Fund except to the extent, within
the meaning of Rule 17e-1 of the Investment Company Act, any commissions, fees
or other remunerations payable in connection with such transactions do not
exceed the usual and customary commission or fee of such broker and are
reasonable and fair compared to those which could be obtained by other brokers
in comparable transactions.
26
<PAGE>
In certain instances there may be securities which are suitable for the Fund as
well as for one or more of the Investment Manager's other clients. Investment
decisions for the Fund and for the Investment Manager's other clients are made
with a view to achieving their respective investment objectives. It may develop
that a particular security is bought or sold for only one client even though it
might be held by, or bought or sold for, other clients. Likewise, a particular
security may be bought for one or more clients when one or more clients are
selling that same security. Some simultaneous transactions are inevitable when
several clients receive investment advice from the same investment adviser,
particularly when the same security is suitable for the investment objectives of
more than one client. When two or more clients are simultaneously engaged in
the purchase or sale of the same security, the securities are allocated among
clients in a manner believed to be equitable to each. It is recognized that in
some cases this system could have a detrimental effect on the price or volume of
the security as far as the Fund is concerned. However, it is believed that the
ability of the Fund to participate in volume transactions will produce better
executions for the Fund.
DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES
The Fund is a Delaware Business Trust established under a Certificate of Trust
dated March 20, 1996 and filed with the Delaware Secretary of State on March 25,
1996, and governed by a Trust Instrument dated March 26, 1996. Its authorized
capital consists of an unlimited number of shares of beneficial interest of
$0.00001 par value, issued in separate series. Each share of each series
represents an equal proportionate interest in that series with each other share
of that series.
The assets of the Fund received for the issue or sale of the shares of each fund
and all income, earnings, profits and proceeds thereof, subject only to the
rights of creditors, are specifically allocated to such series and constitute
the underlying assets of such series. The underlying assets of each series are
segregated on the books of account, and are to be charged with the liabilities
in respect to such series and with such a share of the general liabilities of
the Fund. If a series was unable to meet its obligations, the assets of only
that series, and no other series, will be available to creditors for that
purpose. General liabilities, expenses, costs, charges or reserves which are
not readily identifiable as belonging to any particular series shall be
allocated and charged by the Trustees between or among any one or more of the
series in such manner as the Trustees deem fair and equitable. In the event of
the dissolution or liquidation of the Fund or any series, the holders of the
shares of any series are entitled to ratably receive, as a class, the value of
the underlying assets of such shares available for distribution to shareholders.
However, the payment to the holders may be reduced by any fees, expenses or
charges allocated to that series.
Shares of the Fund entitle their holder to one vote per share; however, separate
votes are taken by each series on matters affecting an individual series. For
example, a change in investment policy for a series would be voted upon only by
shareholders of the series involved.
The Trustees of the Fund have the authority to designate additional series and
to designate the relative rights and preferences as between the different
series. There is presently one series so designated. All shares issued and
outstanding will be fully paid and nonassessable by the Fund, and redeemable as
described in this Statement of Additional Information and in the Prospectus.
The Trust Instrument provides that obligations of the Fund are not binding upon
the Trustees individually but only upon the property of the Fund, that the
Trustees and officers will not be liable for errors of judgment or mistakes of
fact or law, and that the Fund will indemnify its Trustees and officers against
liabilities and expenses incurred in connection with litigation in which they
may be involved because of their offices with the Fund unless, as to liability
to Fund or Fund shareholders, it is finally adjudicated that they engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in their offices, or unless with respect to any other matter it
is finally adjudicated that they did not act in good faith in the reasonable
belief that their actions were in the best interests of the Fund. In the case
of settlement, such indemnification will be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested Trustees or in a written
opinion of independent counsel, that such officers or Trustees have engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of their
duties.
The Trust Instrument contains an express disclaimer of shareholder liability for
acts or obligations of the Trust and provides for indemnification and
reimbursement of expenses out of Fund property for any shareholder held
personally liable for the obligations of a Fund solely by reason of his or her
being or having been a shareholder. The Trust Instrument also provides for the
maintenance, by or on behalf of the Trust and the Fund, of appropriate insurance
(for example, fidelity bond and errors and omissions insurance) for the
protection of the Trust and the Fund, their shareholders, trustees, officers,
employees and agents,
27
<PAGE>
covering possible tort and other liabilities. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which Delaware law did not apply, inadequate insurance existed
and the Fund itself was unable to meet its obligations.
As of August 31, 1998, to the knowledge of the Administrator, no shareholders of
record owned five percent or more of the outstanding shares of the Fund.
FINANCIAL STATEMENTS
The audited financial statements for the Fund and the notes thereto appearing in
the most current fiscal year Annual Report to shareholders are incorporated in
this Statement of Additional Information by reference. No other parts of the
Annual Report are incorporated by reference herein. The financial statements
included the Annual Report have been audited by the Fund's independent auditors,
KPMG Peat Marwick LLP, whose report thereon dated July 24, 1998, is incorporated
herein by reference. Such financial statements have been incorporated herein in
reliance upon such report given upon their authority as experts in accounting
and auditing. Additional copies of the Annual Report may be obtained at no
charge by telephoning the Fund at the telephone number appearing on the front
page of this Statement of Additional Information.
28
<PAGE>
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Included in Part A of this Registration Statement:
(1) Financial Highlights for the period ended May 31, 1997 and the
year ended May 31, 1998 (audited).
Incorporated by reference in Part B of this Registration Statement:
(1) Schedule of Portfolio Investments dated May 31, 1998
(audited).*
(2) Statement of Assets and Liabilities dated May 31, 1998
(audited).*
(3) Statement of Operations for the year ended May 31, 1998
(audited).*
(4) Statement of Changes in Net Assets for the period ended May 31,
1997 and the year ended May 31, 1998 (audited).*
(5) Financial Highlights for the period ended May 31, 1997 and the
year ended May 31, 1998 (audited).*
(6) Notes to Financial Statements dated May 31, 1998 (audited).*
(7) Report of Independent Auditors dated July 24, 1998.*
(b) Exhibits:
--------
Exhibit
Number Description of Exhibit
------ ----------------------
1(a) Certificate of Trust, dated March 20, 1996, and filed by the
Delaware Secretary of State on March 25, 1996./(1)/
1(b) Certificate of Amendment to Certificate of Trust, dated
January 15, 1997, and filed by the Delaware Secretary of
State on January 29, 1997./(4)/
2 By-Laws adopted on March 26, 1996./(1)/
3 None.
4 Trust Instrument, dated March 26, 1996./(1)/
5 Investment Management Agreement, dated May 9, 1996, between
the Registrant and Meyers, Sheppard & Co., LLC./(1)/
6(a) Distribution Agreement, dated May 9, 1996 between the
Registrant and Furman Selz, LLC./(1)/
6(b) Distribution Agreement, dated November 14, 1996, between the
Registrant and BISYS Fund Services Limited Partnership./(4)/
7 None.
C-1
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8(a) Custodian Agreement, dated May 9, 1996, between the
Registrant and Wells Fargo Bank, N.A./(1)/
8(b) Amendment to Custodian Agreement, dated May 9, 1996, between
the Registrant and BNY Western Trust Company./(6)/
9(a)(1) Administration Agreement, dated May 9, 1996, between the
Registrant and Furman Selz, LLC./(1)/
9(a)(2) Administration Agreement, dated November 14, 1996, between
the Registrant and BISYS Fund Services Limited
Partnership./(4)/
9(a)(3) Amendment to Administration Agreement, dated January 1,
1998, to the Administration Agreement, dated November 14,
1996, between the Registrant and BISYS Fund Services Limited
Partnership--Filed herewith.
9(b)(1) Fund Accounting Agreement, dated May 9, 1996, between the
Registrant and Furman Selz, LLC./(1)/
9(b)(2) Fund Accounting Agreement, dated November 14, 1996, between
the Registrant and BISYS Fund Services, Inc./(4)/
9(b)(3) Amendment to Fund Accounting Agreement, dated January 1,
1998, to the Fund Accounting Agreement, dated November 14,
1996, between the Registrant and BISYS Fund Services, Inc.
--Filed herewith.
9(c)(1) Transfer Agency Agreement, dated May 9, 1996, between the
Registrant and Furman Selz, LLC./(1)/
9(c)(2) Transfer Agency Agreement, dated November 14, 1996, between
the Registrant and BISYS Fund Services, Inc./(4)/
9(c)(3) Amendment to Transfer Agency Agreement, dated January 1,
1998, to the Transfer Agency Agreement, dated November 14,
1996, between the Registrant and BISYS Fund Services, Inc.
--Filed herewith.
10(a) Opinion and Consent of Pollet & Woodbury, a Law
Corporation./(1)/
11 Consent of Independent Auditors--Filed herewith.
12 None.
13(a) Form of Subscription Letter for $100,000 Seed Capital./(1)/
13(b) Form of Subscription Response Letter./(2)/
14 None.
15(a) Form of Plan of Distribution adopted by the Registrant on
May 9, 1996./(1)/
15(b) Form of Plan of Distribution as re-adopted by the Registrant
on April 4, 1997--Filed herewith.
16 Schedule of Computation of Performance Calculation./(6)/
C-2
<PAGE>
17 Financial Data Schedule--Filed herewith.
18 None.
19 None.
Other Exhibits
24 Power of Attorney./(6)/
- --------------
* Incorporated by reference to the Registrant's Annual Report filed with the
Securities and Exchange Commission on August 4, 1998.
(1) Previously provided as exhibit to Pre-Effective Amendment No. 1 to Form N-1A
filed by the Registrant on May 3, 1996.
(2) Previously provided as exhibit to Pre-Effective Amendment No. 2 to Form N-1A
filed by the Registrant on June 5, 1996.
(3) Previously provided as exhibit to Post-Effective Amendment No. 1 to Form
N-1A filed by the Registrant on June 13, 1996.
(4) Previously provided as exhibit to Post-Effective Amendment No. 2 to Form
N-1A filed by the Registrant on January 30, 1997.
(5) Previously provided as exhibit to Post-Effective Amendment No. 3 to Form
N-1A filed by the Registrant on February 6, 1997.
(6) Previously provided as exhibit to Post-Effective Amendment No. 4 to Form
N-1A filed by the Registrant on September 25, 1997.
Item 25. Persons Controlled by or Under Common Control with Registrant.
None
Item 26. Number of Holders of Securities.
Title of Class: Number of Record Holders
Shares of Beneficial Interest at
(par value $0.00001) August 31, 1998
Series 1
Meyers Pride Value Fund 560
(formerly Meyers Sheppard Pride Fund)
Item 27. Indemnification.
Reference is made to Article IX of Registrant's Trust Instrument.
Registrant, its Trustees and officers are insured against certain expenses in
connection with the defense of claims, demands, actions, suits, or proceedings,
and certain liabilities that might be imposed as a result of such actions, suits
or proceedings.
C-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act"), may be permitted to directors,
trustees, officers and controlling persons of the Registrant and the principal
underwriter 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 Securities 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, trustee, officer, or controlling person of the
Registrant and the principal underwriter in connection with the successful
defense of any action, suite or proceeding) is asserted against the Registrant
by such director, trustee, officer or controlling person or principal
underwriter in connection with the shares 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
Securities Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
The list required by this Item 28 of the managers and officers of Meyers Capital
Management, LLC (formerly Meyers, Sheppard & Co., LLC), together with
information as to any other business, profession, vocation or employment of a
substantial nature engaged in by such managers and officers during the past two
years, is incorporated by reference to Schedules A and D of Form ADV filed by
Meyers Sheppard & Co., LLC, pursuant to the Advisers Act (SEC File
No. 801-51437).
C-4
<PAGE>
Item 29. Principal Underwriters.
(a) BISYS Fund Services Limited Partnership, an Ohio limited
partnership, is the distributor (the "Distributor") for the shares of the
Registrant. The Distributor also serves as the principal underwriter or
placement agent for other unrelated registered investment companies.
(b) The information required by this Item 29 with respect to the
Distributor is incorporated by reference to Schedule A of Form BD filed by BISYS
Fund Services Limited Partnership pursuant to the Securities Exchange Act of
1934 (SEC File No. 8-32480).
(c) Not applicable.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be maintained by Section
31(a) of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the Rules thereunder will be maintained at the offices of:
(1) Records relating to management and investment advisement
functions:
Meyers Pride Value Fund
c/o Meyers Investment Trust
8901 Wilshire Boulevard
Beverly Hills, California 90211
(2) Records relating to administration and distribution functions:
BISYS Fund Services Limited Partnership
3435 Stelzer Road,
Columbus, Ohio 43219
(3) Records relating to fund accounting and registrar/transfer agency
functions:
BISYS Fund Services, Inc.
3435 Stelzer Road,
Columbus, Ohio 43219
(4) Records relating to custodial functions:
BNY Western Trust Company
700 South Flower Street, Suite 250
Los Angeles, California 90017
Item 31. Management Services.
The Registrant is not a party to any management related service contract not
discussed in Part A or Part B of this Registration Statement.
Item 32. Undertakings.
(A) The Registrant undertakes to comply with Section 16(c) of the
Investment Company Act as though such provisions of the Investment Company Act
were applicable to the Registrant, except that the request referred to in the
third full paragraph thereof may only be made by shareholders who hold in the
aggregate at least 10% of the outstanding shares of the Registrant, regardless
of the net asset value of shares held by such requesting shareholders.
C-5
<PAGE>
(B) If the information called for by Item 5A is contained in the latest
Annual Report to shareholders, an undertaking to furnish each person to whom a
Prospectus is delivered with a copy of the Registrant's latest Annual Report to
shareholders upon request and without change.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933, as amended, and has
duly caused this Post-Effective Amendment No. 5 to Registration Statement on
Form N-1A to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Beverly Hills, State of California, on September 25,
1998.
MEYERS INVESTMENT TRUST
(formerly Meyers Sheppard Investment Trust)
By: /s/ Shelly J. Meyers
---------------------------
Shelly J. Meyers, President
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Post-Effective Amendment No. 5 to Registration Statement on Form N-1A has been
signed below by the following persons in the capacities indicated on September
25, 1998.
Signatures Title Date
---------- ----- ----
/s/ Shelly J. Meyers Chairperson, Trustee and President September 25, 1998
- ----------------------
Shelly J. Meyers
Leslie C. Sheppard * Trustee and Executive Vice President September 25, 1998
- ----------------------
Leslie C. Sheppard
Robert E. Gibson * Trustee September 25, 1998
- ----------------------
Robert E. Gibson
Leonard Greenhalgh * Trustee September 25, 1998
- ----------------------
Leonard Greenhalgh
Duane E. McWaine * Trustee September 25, 1998
- ----------------------
Duane E. McWaine
/s/ Frank Deutchki Treasurer September 25, 1998
- ----------------------
Frank Deutchki
/s/ Shelly J. Meyers
- -----------------------------
Shelly J. Meyers
Attorney-in-fact
* Pursuant to Power of Attorney filed with Post-Effective Amendment No. 4, which
was filed with the Securities and Exchange Commission on September 25, 1997.
<PAGE>
FILED EXHIBIT INDEX
-------------------
Exhibit
Number Description of Exhibit
- ------ ----------------------
9(a)(3) Amendment to Administration Agreement, dated January 1, 1998, to the
Administration Agreement, dated November 14, 1996, between the
Registrant and BISYS Fund Services Limited Partnership
9(b)(3) Amendment to Fund Accounting Agreement, dated January 1, 1998, to the
Fund Accounting Agreement, dated November 14, 1996, between the
Registrant and BISYS Fund Services, Inc.
9(c)(3) Amendment to Transfer Agency Agreement, dated January 1, 1998, to the
Transfer Agency Agreement, dated November 14, 1996, between the
Registrant and BISYS Fund Services, Inc.
11 Consent of Independent Auditors
15(b) Form of Plan of Distribution as re-adopted by the Registrant on April
4, 1997
27 Financial Data Schedule
<PAGE>
Exhibit 9(a)(3)
AMENDMENT TO
ADMINISTRATION AGREEMENT
This Amendment is made as of January 1, 1998, between Meyers Investment
Trust (the "Trust"), formerly known as Meyers Sheppard Investment Trust, and
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services (the
"Administrator"). The parties hereby amend the Administration Agreement (the
"Agreement") between the Trust and the Administrator, dated as of November 14,
1996, as set forth below.
WHEREAS, the parties hereto wish to modify Schedule A to the Agreement by
amending the sections entitled "Fees" and "Term".
NOW THEREFORE, in consideration of the foregoing and the mutual premises
and covenants herein set forth, the parties agree as follows:
1. Capitalized terms not otherwise defined herein shall have the same
meaning as in the Agreement.
2. Schedule A to the Agreement shall be amended by adding the following
paragraph at the end of the section entitled "Fees":
The fee amounts set forth above shall be subject to the following
minimum fees:
Sixty thousand dollars ($60,000) per Portfolio as
of January 1, 1998 until December 31, 1998
Seventy-five thousand dollars ($75,000) per
Portfolio thereafter
3. Schedule A to the Agreement shall be further amended by replacing the
first and second sentences of the first paragraph of the section
entitled "Term" with the following:
The initial term of this Agreement (the "Initial Term") shall be
for a period commencing on the date this Agreement is executed by
both parties and ending on December 31, 1999. This Agreement
shall be renewed automatically for successive periods of two
years
<PAGE>
after the Initial Term unless written notice of non-renewal is
provided by either party not less than 90 days prior to the end
of the then-current term.
4. This Amendment may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall
constitute one and the same instrument.
5. Except as specifically set forth herein, all other provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
MEYERS INVESTMENT TRUST
By: /s/ Shelley J. Meyers
----------------------------------------
Title: Chairwoman
-------------------------------------
BISYS FUND SERVICES
LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.,
General Partner
By: /s/ George O. Martinez
----------------------------------------
Title: Senior Vice President
-------------------------------------
2
<PAGE>
Exhibit 9(b)(3)
AMENDMENT TO
FUND ACCOUNTING AGREEMENT
This Amendment is made as of January 1, 1998, between Meyers Investment
Trust (the "Trust"), formerly known as Meyers Sheppard Investment Trust, and
BISYS Fund Services, Inc. ("Fund Accountant"). The parties hereby amend the
Fund Accounting Agreement (the "Agreement") between the Trust and Fund
Accountant, dated as of November 14, 1996, as set forth below.
WHEREAS, the parties hereto wish to modify Section 6 of the Agreement,
entitled "Term," by extending the initial term set forth therein; and
WHEREAS, the parties wish to modify the fee schedule set forth in Schedule
A to the Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual premises
and covenants herein set forth, the parties agree as follows:
1. Capitalized terms not otherwise defined herein shall have the same
meaning as in the Agreement.
2. Section 6 of the Agreement shall be amended by replacing the first two
sentences of such section with the following:
The initial term of this Agreement (the "Initial Term") shall be
for a period commencing on the date this Agreement is executed by
both parties and ending on December 31, 1999. This Agreement
shall be renewed automatically for successive two-year terms
unless written notice not to renew is given by the non-renewing
party to the other party at least 60 days prior to the expiration
of the then-current term; provided, however, that after such
termination for so long as Fund Accountant, with the written
consent of the Trust, in fact continues to perform any one or
more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement,
including without limitation the provisions dealing with
indemnification, shall continue in full force and effect.
<PAGE>
3. Schedule A to the Agreement shall be amended by replacing the fee
schedule contained therein with the following:
Effective as of January 1, 1998, Fund Accountant shall be
entitled to receive a fee from each Fund in accordance with the
following schedule:
$30,000 annually plus out-of-pocket expenses, as described in
Section 4, plus an additional annual fee of $10,000 per Fund for
each additional class that may be created subsequent to January
1, 1998.
The annual fee amount set forth above shall be prorated for
periods of less than one year.
4. This Amendment may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall
constitute one and the same instrument.
5. Except as specifically set forth herein, all other provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
MEYERS INVESTMENT TRUST
By: /s/ Shelley J. Meyers
----------------------------------------
Title: Chairwoman
-------------------------------------
BISYS FUND SERVICES
LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.,
General Partner
By: /s/ George O. Martinez
----------------------------------------
Title: Senior Vice President
-------------------------------------
2
<PAGE>
Exhibit 9(c)(3)
AMENDMENT TO
TRANSFER AGENCY AGREEMENT
This Amendment is made as of January 1, 1998, between Meyers Investment
Trust (the "Trust"), formerly known as Meyers Sheppard Investment Trust, and
BISYS Fund Services, Inc. ("BISYS"). The parties hereby amend the Transfer
Agency Agreement (the "Agreement") between the Trust and BISYS, dated as of
November 14, 1996, as set forth below.
WHEREAS, the parties hereto wish to modify Section 5 of the Agreement,
entitled "Term," by extending the initial term set forth therein; and
WHEREAS, the parties wish to modify the fee schedule set forth in Schedule
B to the Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual premises
and covenants herein set forth, the parties agree as follows:
1. Capitalized terms not otherwise defined herein shall have the same
meaning as in the Agreement.
2. Section 5 of the Agreement shall be amended by replacing the first two
sentences of such section with the following:
The initial term of this Agreement (the "Initial Term") shall be
for a period commencing on the date this Agreement is executed by
both parties and ending on December 31, 1999. Thereafter, it
shall be renewed automatically for successive two-year terms
unless written notice not to renew is given by the non-renewing
party to the other party at least 60 days prior to the expiration
of the then-current term; provided, however, that after such
termination, for so long as BISYS, with the written consent of
the Trust, in fact continues to perform any one or more of the
services contemplated by this Agreement or any Schedule or
exhibit hereto, the provisions of this Agreement, including
without limitation the provisions dealing with indemnification,
shall continue in full force and effect.
3. Schedule B to the Agreement shall be amended by replacing the first
sentence of the first paragraph with the following:
<PAGE>
Effective as of January, 1998, BISYS shall receive an account
maintenance fee of $21.00 per year for each account which is in
existence at any time during the month for which payment is made,
such fee to be paid in equal monthly installments, plus out-of-
pocket expenses, provided that the minimum annual fee to be paid
by each Fund is $15,000.00.
4. This Amendment may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall
constitute one and the same instrument.
5. Except as specifically set forth herein, all other provisions of the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
MEYERS INVESTMENT TRUST
By: /s/ Shelley J. Meyers
----------------------------------------
Title: Chairwoman
-------------------------------------
BISYS FUND SERVICES
LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc.,
General Partner
By: /s/ George O. Martinez
----------------------------------------
Title: Senior Vice President
-------------------------------------
<PAGE>
Exhibit 11
Independent Auditors' Consent
The Board of Trustees of
the Meyers Pride Value Fund:
We consent to the use of our report dated July 24, 1998 incorporated by
reference herein and to the references to our firm under the headings "Financial
Highlights" in the Prospectus and "Independent Auditors" and "Financial
Statements" in the Statement of Additional Information.
/s/ KPMG Peat Marwick LLP
Columbus, Ohio
September 18, 1998
<PAGE>
Exhibit 15(b)
PLAN OF DISTRIBUTION
Of The
MEYERS PRIDE VALUE FUND
A Separate Series Of The
MEYERS INVESTMENT TRUST
(As Re-adopted)
WHEREAS, the Meyers Investment Trust (the "Trust") is a business trust
organized under the laws of the State of Delaware;
WHEREAS, the Trust has established a separate series of the beneficial
interests of the Trust, par value $.00001 (the "Shares"), designated the Meyers
Pride Value Fund (the "Fund");
WHEREAS, on or about April 1, 1996, the Trust filed a Registration
Statement on Form N-1A (File Nos. 33-32111 and 811-7581) (the "Registration
Statement"), under the Investment Trust Act of 1940, as amended (the "1940 Act")
and the Securities Act of 1933, as amended (the "1933 Act"), with the Securities
and Exchange Commission (the "Commission"), in connection with the registration
of the Shares, and such Registration Statement was declared effective by the
Commission on June 9, 1996;
WHEREAS, on or about May 9, 1996, the Board of Trustees of the Trust
adopted a Plan of Distribution (the "Plan") for distribution of the Shares in
accordance with Rule 12b-1 under the 1940 Act;
WHEREAS, on or about June 13, 1996, the founding shareholders of the Fund
approved the Plan;
WHEREAS, the Plan authorized the Trust to engage a distributor to be
selected by the Board to distribute the Shares and, in connection therewith, for
the expenses for services performed and expenses incurred by such distributor in
connection with the distribution of the Shares be paid in accordance with the
Plan; and
WHEREAS, in accordance with Rule 12b-1 under the 1940 Act, the Plan is
required to be re-adopted no later than twelve (12) months following the
adoption of the Plan.
NOW, THEREFORE, the Trust hereby re-adopts this Plan of Distribution (the
"Plan") for distribution of the Shares in accordance with Rule 12b-1 under the
1940 Act, and on and subject to the following terms and conditions:
1. DISTRIBUTION AGREEMENT
Upon re-adoption of this Plan in accordance with section 4 below, the
---------
Trust is hereby authorized to enter into (or renew) a distribution agreement
(the "Distribution Agreement"), with a Distributor to be selected by the Board
of Trustees (the "Distributor"), wherein the Trust will compensate the
Distributor, from the assets of the Fund, for services performed and expenses
incurred by the Distributor in connection with the distribution of the Shares
and for providing certain services to the
1
<PAGE>
shareholders of the Fund. The Distribution Agreement shall be in writing and
shall contain such provisions as the Trust determines to be reasonable and
necessary consistent, however, with the terms and conditions and limitations of
this Plan.
2. COMPENSATION
The amount of compensation paid to the Distributor pursuant to the
terms of the Distribution Agreement during any one year for such year shall not
exceed one-quarter of one percent (0.25%) of the average daily net assets of the
Fund. For the purposes of determining the fees payable under this Plan, the
value of the net assets of the Fund shall be computed in the manner specified in
the Registration Statement (including prospectus and statement of additional
information) as then in effect. Such compensation shall be calculated and
accrued daily and paid monthly or at such other intervals as the Board of
Trustees may determine.
3. SERVICES AND EXPENSES
The types of distribution services and expenses for which the
Distributor may be compensated under this Plan shall include, without limitation
but in all cases in compliance with Rule 12b-1: (i) compensation to and expenses
of brokers or dealers who are members of the National Association of Securities
Dealers, Inc. or their officers, sales representatives or employees; (ii)
compensation to and expenses of the Distributor and any of its officers, sales
representatives and employees, including allocable overhead, travel and
telephone expenses, who engage in or support distribution of the Shares; (iii)
printing of prospectuses and reports for other than existing shareholders; and
(iv) preparation, printing and distribution of sales literature and advertising
materials.
4. APPROVAL BY BOARD OF TRUSTEES
This Plan, as re-adopted, shall not take effect until approved by vote
of a majority of both (i) the Board of Trustees of the Trust and (ii) those
Trustees of the Trust who are not "interested persons" of the Trust (as defined
by the 1940 Act) and whom have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it including, without
limitation, the Distribution Agreement (the "Rule 12b-1 Trustees") cast in
person at a meeting (or meetings) called for the purpose of voting on this Plan
and such related agreements.
5. SELECTION AND NOMINATION OF TRUSTEES
While this Plan is in effect. the selection and nomination of the
Trustees who are not interested persons (as defined in the 1940 Act) of the
Trust shall be committed to the discretion of the Trustees who are not such
interested persons.
6. REPORTS FROM DISTRIBUTOR
The Distributor shall provide to the Board or Trustees of the Trust,
at least quarterly, and the Board shall review, at least quarterly, a written
report of the amounts paid hereunder and the purposes for which they were
incurred.
2
<PAGE>
7. PRESERVATION OF PLAN RECORDS
The Fund shall preserve copies of this Plan and any related agreements
(including any Distribution Agreement) and all reports made pursuant to
Section 6 hereof, for a period of not less than six years from the date of the
- ---------
Plan. Any such agreement or any such report, as the case may be, will be kept
for the first two years in an easily accessible place.
8. TERM OF PLAN AND RELATED AGREEMENTS
This Plan, as re-adopted, shall remain in effect no longer than one
year from the date of the adoption of this Plan, and shall continue in effect
thereafter so long as such continuance is specifically approved at least
annually by the Board of Trustees in the manner provided for approval of this
Plan in section 4. Any agreements related to this Plan (including any
---------
Distribution Agreement) shall provide that they shall remain in effect no longer
than one year from the date of the adoption of this Plan, and shall continue in
effect thereafter so long as such continuance is specifically approved at least
annually by the Board of Trustees in the manner provided for approval of this
Plan in section 4.
---------
9. TERMINATION OF PLAN AND RELATED AGREEMENTS
This Plan may be terminated at any time by vote of a majority of (i)
the Rule 12b-1 Trustees or (ii) the outstanding voting securities of the Fund.
Any agreements related to this Plan (including any Distribution Agreement),
shall provide (i) that it may be terminated at any time without the payment of
penalty on not more than sixty days written notice by a vote of a majority of
(A) the Rule 12b-1 Trustees or (B) the outstanding voting securities of the
Fund, and (ii) that it shall terminate automatically in the event of its
assignment.
10. AMENDMENT OF PLAN
This Plan, together with any related agreement (including any
Distribution Agreement), (i) may not be materially amended unless such amendment
is approved by its Board of Trustees in the manner provided for the initial
approval of this Plan in section 4 hereof, and (ii) if such amendment relates to
---------
a material increase in the amount of compensation payable to the Distributor
pursuant to section 2 hereof, unless such amendment is also approved by a vote
---------
of at least a majority (as defined in the 1940 Act) of the outstanding voting
securities of the Fund.
11. ADOPTION OF PLAN TO OTHER SERIES
This Plan may not be adopted with respect to any separate series or
portfolio of the Trust other than the Fund (each a "New Fund") unless and until
(i) such adoption is approved by the Board of Trustees in the manner provided
for the initial approval of this Plan in section 4 hereof, and (ii) such
---------
adoption is also approved by a vote of at least a majority (as defined in the
1940 Act) of the outstanding voting securities of the New Fund.
12. RULE 12B-1 SAVING CLAUSE
It is the intent of the Trust that this Plan, and each and every
provision hereof, comply with Rule 12b-1 of the 1940 Act and regulatory
interpretations thereof, and that each and every provision of this Plan be
interpreted and construed to conform to that intent. To the extent that any
such provision
3
<PAGE>
cannot be so construed, such offending provision shall be severed in accordance
with section 13 of this Plan.
----------
13. SEVERABILITY
If any term or provision of this Plan or the application thereof to
any person or circumstance shall, to any extent, be determined to be invalid,
illegal or unenforceable under present or future laws effective during the term
of this Plan, and/or not in compliance with Rule 12b-1 of the 1940 Act, then
and, in that event: (i) the performance of the offending term or provision (but
only to the extent its application is invalid, illegal or unenforceable and/or,
if applicable, not in compliance with Rule 12b-1 of the 1940 Act) shall be
excused as if it had never been incorporated into this Plan, and, in lieu of
such excused provision, there shall be added a provision as similar in effect
and operation to such excused provision as may be possible and be legal, valid
and enforceable and/or, if applicable, in compliance with Rule 12b-1, and (ii)
the remaining part of this Plan (including the application of the offending term
or provision to persons or circumstances other than those as to which it is held
invalid, illegal or unenforceable and/or, if applicable, not in compliance with
Rule 12b-1) shall not be affected thereby and shall continue in full force and
effect to the fullest extent provided by law.
14. LIMITATION OF LIABILITY
The name Meyers Investment Trust is the designation of the Trustees
under (i) a Certificate of Trust filed by the Delaware Secretary of State March
25, 1996, as amended by a Certificate of Amendment to Certificate of Trust filed
by the Delaware Secretary of State on January 29, 1997, and as further amended
from time to time, and (ii) a Trust Instrument dated March 26, 1996, as further
amended from time to time, and all persons dealing with the Trust must look
solely to the property of such Trust for enforcement of any claims against such
Trust as neither the Trustees, officers or agents of the Trust or shareholders
of any fund under the Trust assume any personal liability for obligations
entered into by the Trust.
The undersigned, the duly appointed Secretary of the Trust, hereby
certifies that: (i) on April 4, 1997, the foregoing Plan of Distribution was
unanimously readopted, pursuant to section 4 of the Plan, by (i) the Board of
---------
Trustees of the Trust and (ii) the Trustees of the Trust who are not interested
persons of the Trust and whom have no direct or indirect financial interest in
the operation of the Plan of Distribution or any agreement related to the Plan
of Distribution (including any Distribution Agreement).
-----------------------------------
Secretary
4
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0001011167
<NAME> MEYERS INVESTMENT TRUST
<SERIES>
<NUMBER> 01
<NAME> THE MEYERS PRIDE VALUE FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 2,625,910
<INVESTMENTS-AT-VALUE> 2,946,096
<RECEIVABLES> 202,503
<ASSETS-OTHER> 120,736
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,269,335
<PAYABLE-FOR-SECURITIES> 100,385
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 45,873
<TOTAL-LIABILITIES> 146,258
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,758,190
<SHARES-COMMON-STOCK> 240,637
<SHARES-COMMON-PRIOR> 127,867
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 44,701
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 320,186
<NET-ASSETS> 3,123,077
<DIVIDEND-INCOME> 29,549
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 43,086
<NET-INVESTMENT-INCOME> (13,537)
<REALIZED-GAINS-CURRENT> 224,583
<APPREC-INCREASE-CURRENT> 178,305
<NET-CHANGE-FROM-OPS> 389,351
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 121,262
<NUMBER-OF-SHARES-REDEEMED> 30,010
<SHARES-REINVESTED> 21,518
<NET-CHANGE-IN-ASSETS> 1,559,656
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 81,287
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 22,095
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 271,758
<AVERAGE-NET-ASSETS> 2,209,529
<PER-SHARE-NAV-BEGIN> 12.23
<PER-SHARE-NII> (0.06)
<PER-SHARE-GAIN-APPREC> 2.36
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 1.55
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.98
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
